HC dismisses PIL seeking tax on agricultural income in Delhi

New Delhi: Delhi High Court on Wednesday dismissed a public interest litigation challenging the blanket exemption of agricultural income from taxation and seeking its imposition in the capital, terming the plea “misconceived”.

A bench of Chief Justice D K Upadhyaya and Justice Tejas Karia said the issue fell outside the court’s domain and that it could not direct Delhi govt or the legislature to enact a new taxation law.

“From a perusal of the prayer clause, it is apparent that the petitioner is seeking a mandamus to the legislature to enact a particular law. Such a direction is impermissible. The writ petition is highly misconceived and is dismissed,” the court observed.

The PIL argued that the continued exemption of agricultural income from tax for Delhi residents resulted in fiscal inequality and amounted to arbitrary classification among taxpayers. It contended that while the exemption was meant to protect economically vulnerable farmers, it was being misused by affluent individuals deriving substantial agricultural income.

The petitioner clarified that it was not seeking a blanket tax on agricultural income, but a regulatory framework to prevent misuse of the exemption by high-net-worth individuals, which it said lacked a rational nexus with the stated objective of protecting small farmers.

The plea pointed out that only Assam and West Bengal continue to levy agricultural income tax in an effective manner, largely on plantation crops such as tea, while most other states have either repealed such laws or reduced enforcement. In Delhi, it noted, no agricultural income tax law exists and such income remains fully exempt.

The petitioner sought directions to Delhi govt to consider legislative or policy measures to address the alleged misuse.