Income Tax dept opposes plea for inclusion of same sex couples as ‘spouses’, HC refuses urgent interim relief

Section 56(2)(x) of the Act deals with taxing any money, property, or other assets received with a value exceeding Rs 50,000. Under its fifth proviso, gifts from certain relatives — including “spouse” — are exempted from tax.

The petitioners have sought a direction to include same-sex couples within the meaning of the term “spouse” in the proviso. They argued that the current wording of the law is “discriminatory” as it does not clarify whether same-sex couples are entitled to the same exemption.

Appearing for the Centre, Additional Solicitor General (ASG) Anil Singh informed the court that while the Income Tax department has filed an affidavit in response to the plea, the government is yet to decide whether it will adopt the same or file a separate reply. He further submitted that “same-sex marriage is not recognised by law” and referred to the Supreme Court’s ruling which held that such unions can only be recognised through legislation, a factor he said the High Court must consider while deciding the matter.

The IT department termed the plea “misconceived” and “non-maintainable,” arguing that the petitioners were attempting to “use the Income-tax Act to challenge the meaning of marriage/wife-husband/spouse as statutorily understood under different marriage Acts.” It further contended that the petitioners had “failed to establish that their relationship could be recognised as marriage” and that no such union could be considered a “marriage” or “spouse” under the IT Act unless recognised by existing marriage laws.

After the Centre sought to defer the hearing, the petitioners’ counsel urged the court to grant urgent interim relief, pointing out that the deadline to comply with the impugned provision is December 31.

The bench, however, orally observed that it was not possible to decide the matter before December 31 as it would have to hear the parties at length and apply its mind before reaching a conclusion.

The court also questioned what coercive action the petitioners apprehended, noting that they would be entitled to a refund if they eventually succeeded in the petition. The matter will be heard next in the second week of December.

However, the bench orally remarked it was not possible for it to pass any verdict before December 31 as it has to hear parties at length and then apply their mind before coming to a conclusion.

The bench also questioned as to what was the coercive action that petitioners apprehended as they will get refund in case they succeed in the petition and posted further hearing to the second week of December.