The Income Tax Department opposed the same sex couple’s plea and told the court that it is “misconceived” and should be dismissed.
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The Income Tax Department recently told the Bombay High Court that a same sex couple is required to get its union itself legally recognised as a ‘marriage’ or ‘spouse’ in order to claim benefit of exemption under Section 56(2)(x) of the Income Tax (IT) Act that grants exemption from tax on gifts between heterosexual couple.
According to reports, the petitioners – Payio Ashiho and his partner Vivek Divan – had challenged a part of the I-T Act stating that it unfairly denied them a tax benefit that married heterosexual couples get on gifts.
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The Income Tax Department opposed the same sex couple’s plea and told the court that it is “misconceived” and should be dismissed.
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The plea was mentioned before the bench of Justice BP Colabawalla and Justice Firdosh Pooniwalla.
Under the section, gifts between spouses remain exempted from tax. However, Payio and Vivek cannot claim this exemption since law does not recognise same-sex partners as spouses, according to Live Law.
The two of them have argued that this is “indirectly discriminatory” and sought the direction from the court to include same-sex couples under this tax exemption too.
The I-T Department filed an affidavit on October 14 last year and noted that the petitioners we making an effort to use tax law to get marriage recognition, without their relationship being recognised as a marriage under any Indian law.
“Under the Income Tax Act, no relationship will be recognised as marriage, wife-husband, spouse, if it is not so recognised under any of the marriage act in India,” it noted.
Further, it argued that they want the tax law to define spouse differently from how marriage laws already define it, adding that the same was not allowed.
Highlighting that the plea was invalid on technical grounds, the Income Tax Department said that the couple has not challenged any specific order or action by the tax authorities.
In November last year, the bench refused to pass any interim order in the case.
The final arguments in the case were set for July 9, Additional Solicitor General Anil Singh had on July 6 sought more time, since Solicitor General Tushar Mehta would be arguing the case for the tax department.
The case will next come up for hearing on July 30.
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