New Delhi, May 10,2019: The Supreme Court has stayed a Madras High Court judgment that ruled that salaries received by missionaries and nuns of Catholic Church are liable to be subjected to Tax Deduction at Source (TDS) under Section 192 of the Income Tax Act.
The bench of Justices Ashok Bhushan and K M Joseph ordered to maintain “status quo as on today” while issuing notice in the petition filed by Institute of Franciscan Missionaries of Mary against the March 20 judgment of the High Court.
Senior Advocate Arvind P Datar, appearing for the petitioner, submitted that salaries earned by the missionaries are diverted to their congregations or dioceses, as they cannot hold worldly possessions on account of their vow of poverty. Since no income is accrued to them in personal capacity, their salaries cannot be subjected to TDS deduction, submitted the petitioner.
Recognizing this, they have not been subjected to income tax since 1944 and the High Court judgment will directly impact about 2,300 priests and nuns, submitted the petitioner.
It was also contended that the judgment interfered with the vow of poverty observed by the missionaries and thereby infringed the right to religious freedom under Article 25 of the Constitution of India. The federal government sought four weeks time to respond to the petition. The Court listed the matter for final disposal on August 7.