A sitting Allahabad High Court judge has challenged the CBDT’s decision to deny tax exemptions on statutory judicial allowances under the new tax regime. The Allahabad High Court Judge Tax Exemption New Regime case questions executive restrictions on benefits granted under parliamentary legislation.
Challenge To CBDT’s Administrative Order
Justice Sandeep Jain has filed a writ petition against the Central Board of Direct Taxes (CBDT). The petition challenges an Office Memorandum dated September 12, 2025.
The memorandum limits statutory tax exemptions under the High Court Judges (Salaries and Conditions of Service) Act, 1954. According to the CBDT, judges can claim these exemptions only when they choose the old tax regime.
However, the petitioner argues that the CBDT cannot restrict a benefit created by Parliament.
Statutory Exemptions Under The 1954 Act
The dispute mainly concerns Sections 22A, 22C, and 22D of the 1954 Act.
Section 22A provides for house rent allowance. Section 22C covers the sumptuary allowance. Meanwhile, Section 22D grants tax exemption for these statutory benefits.
The Act also excludes these allowances from the meaning of “Salaries” under Section 15 of the Income Tax Act, 1961.
Therefore, the petitioner argues that the law directly grants these exemptions. An executive memorandum, he contends, cannot override that statutory protection.
CBDT’s Position On The New Tax Regime
The CBDT relies on Section 115BAC(1A) of the Income Tax Act, 1961. The new tax regime offers lower tax rates and revised tax slabs.
The revenue authority argues that taxpayers already receive significant benefits under the new system. Therefore, allowing additional exemptions could create an unintended double benefit.
However, the petitioner disputes this interpretation. He argues that the Income Tax Act contains both tax regimes. The statutory exemptions under the 1954 Act should therefore apply regardless of the regime a taxpayer chooses.
Argument On Parliamentary Supremacy
The petition raises an important question about executive power.
According to the petitioner, Section 22D remains in force. Parliament has not amended or withdrawn the exemption. Consequently, the CBDT cannot restrict the benefit through an administrative instruction.
The petition further argues that the Allahabad High Court Judge Tax Exemption New Regime dispute concerns the relationship between a special statute and general tax provisions.
The petitioner maintains that only Parliament can change a statutory benefit created under the 1954 Act.
Legal Representation
The matter has come before the Allahabad High Court for hearing. Senior Advocate Nipun Singh represents Justice Sandeep Jain. Advocate Naman Agrawal assists him in the proceedings.
