Bombay High Court Postpones Crucial Hearing on Same-Sex Couple Tax Rights
The Bombay High Court has declined to provide immediate interim relief to a same-sex couple challenging the constitutional validity of a provision in the Income Tax Act that grants tax exemptions on gifts exchanged between spouses. The court's decision came during a hearing on Thursday, where the Income Tax department strongly opposed the petition and sought its dismissal.
Legal Battle Over Tax Equality
A division bench comprising Justices Burgess P Colabawalla and Amit S Jamsandekar heard arguments from both sides regarding Section 56(2)(x) of the Income Tax Act. This section deals with taxation of money, property, or assets received with a value exceeding Rs 50,000. The fifth proviso of this section specifically exempts gifts from certain relatives, including "spouse", from taxation.
The petitioners have contended that the current wording of the law is fundamentally discriminatory as it excludes same-sex couples from the scope and definition of the term "spouse." They have sought a judicial direction to include same-sex couples within the meaning of "spouse" in the proviso, arguing that the exclusion violates constitutional principles of equality.
Government's Stance and Legal Arguments
Representing the Central government, Additional Solicitor General Anil Singh informed the court that while the Income Tax department has filed an affidavit in response to the plea, the government hasn't yet decided whether it will adopt the same response or file a separate reply. Singh emphasized that "same-sex marriage is not recognised by law" in India, referencing the Supreme Court's ruling that such unions can only be recognized through legislative action.
The Income Tax department characterized the petition as "misconceived" and "non-maintainable," arguing that the petitioners were attempting to use the Income Tax Act to challenge the meaning of marriage and spouse as understood under different marriage laws. The department maintained that no relationship could be considered a marriage or qualify as "spouse" under the IT Act unless recognized by existing marriage legislation.
Court's Reasoning and Future Proceedings
Despite the petitioners' urgency, citing the December 31 deadline for compliance with the impugned provision, the bench expressed its inability to decide the matter before year-end. The court noted that it would need to hear detailed arguments from all parties and carefully consider the legal complexities before reaching any conclusion.
The bench specifically questioned what coercive action the petitioners feared, observing that they would be entitled to a refund if they ultimately succeeded in their petition. The matter has now been scheduled for further hearing in the second week of December, giving all parties time to prepare their arguments comprehensively.
This case represents a significant test for LGBTQ rights in Indian tax law, coming after the Supreme Court's recent ruling that stopped short of legalizing same-sex marriage but emphasized the need for anti-discrimination protections. The outcome could have far-reaching implications for financial equality and recognition of same-sex relationships in India's legal framework.
