KOCHI: Nuns and priests now have to pay income tax as the Kerala Supreme Court ruled that salaries paid to them are tax deductible at source. The court announced the judgment by quoting the Bible verse: “Give Caesar what Caesar is and God what is God”.
Judge SV Bhatti and Judge Bechu Kurian Thomas issued the order on the 49 appeals submitted by religious communities, nuns and priests, including the provincial superior, Nirmalrani Provincial House, Idukki. They argued that the salaries received by the nuns and priests and paid to the religious orders were not subject to income tax and that taxes would never be deducted at source from the salaries paid to them. They relied on circulars from the Central Board of Direct Taxes (CBDT) in 1944 and 1977 to apply for exemption from TDS. Nuns and priests have no claim to income or property and all their property, including wages and pensions, belongs to the religious community.
The government argued that both the 1944 and 1977 CBDT circulars treat and label the income of “missionaries” as “fees” as opposed to the salaries of nuns or priests. Under no circumstances can canon law take precedence over income tax law.
The court found that it is the legal obligation of anyone paying any income other than salary to deduct income tax at the applicable rates at the time of payment. Neither provision provides an exception for any category of person based on their type of calling or occupation. Section 192 of the law obliges every person who makes a payment under the heading “salaries” to deduct the withholding tax at the prescribed rates. “Legislation enacted by the legislature takes precedence and precedence over personal laws,” the court said.
The petitioners alleged that under canon law, once a perpetual vow of poverty has been taken, the nun or priest will suffer a civil death and that they will not be “persons” within the meaning of the law. The court replied that the concept of civil death proposed in canon law was not real. The extent of civil death according to canon law is limited in its scope and mode of action. The said fiction according to canon law cannot be extended to all situations in the life of a nun or a priest. It cannot be extended to matters regulated in the laws enacted by the legislature, unless this is recognized by the provisions of the law. “None of the provisions of the Income Tax Act recognize the concept of civil death. Thus the concept of civil death does not apply under the Income Tax Act ”, the court stated.
The nuns and priests are part of society. They can move about freely, speak freely, and even engage in most regular activities without restriction, just like any other person. They enjoy all the privileges that the law confers on other persons, including the basic rights under Part III of the Constitution of India. They act as heads of educational institutions, hospitals and other institutions. You conclude contracts for a variety of purposes. In all these areas they behave like any other living person. the concept of civil death according to canon law is not only in the shadows, but also has no relevance to the taxation laws.
The court said that CBDT has no authority to issue a circular that excludes or exempts any person or group of people from the tax regime.