Bombay High Court Adjourns Same Sex Couple's Tax Exemption Plea Till Karnataka High Court Decides Identical Matter

The Bombay High Court on Thursday (July 30) adjourned sine die the plea filed by a same sex couple seeking 'exemption' under section 56(2)(x) of the Income Tax (IT) Act, which grants exemption from tax on 'gifts' between heterosexual couples.

A division bench of Justice Burgess Colabawalla and Justice Firdosh Pooniwalla has kept the matter in abeyance until an identical matter pending before the Karnataka High Court is decided. 

When the matter was called out for hearing on Thursday, Solicitor General Tushar Mehta representing the Central Government, informed the bench that an identical issue is pending before a single-judge bench of the Karnataka High Court, which has been hearing final arguments in case. The SG pointed out that the advocate for the petitioners there - Dhruv Janssen-Sanghavi - is the same one, who represents the petitioners here in the Bombay HC.

The SG therefore, urged the bench to wait for outcome of the said petition from the Karnataka High Court. 

Agreeing with the submission, the bench adjourned the matter sine die until the Karnataka High Court decides the said plea pending before it and has given liberty to both the petitioners as well as the SG to mention the instant matter once the judgment from the other State is out. 

Notably, one Payio Ashiho and his partner Vivek Divan, have in their plea argued that section 56(2)(x), which grants protection to heterosexual couples, is "indirectly discriminatory" against the homosexual partners.

For context, Section 56(2)(x) of the IT Act taxes any money, property, or any other assets received if their value exceeds Rs 50,000. These 'receipts' or 'gifts' under the law are categorised as 'income from other sources.' But the fifth proviso to this provision exempts from taxation, such gifts when received from 'relation', including 'spouses.'

This very part of the proviso, the petitioners allege, is 'discriminatory' against same sex couples as it does not explain if the same would apply to such couples as the law does not recognise same sex partners as 'spouses.'

In November last year, the bench led by Justice Colabawalla had refused to pass any interim orders in the matter. 

Recently, the IT Department had filed its affidavit stating that for getting the benefit of 'exemption' like heterosexual couples, a same sex couple must first get its union legally recognised as a 'marriage' or 'spouse' etc. It urged the bench to dismiss the plea as it is a 'misconceived' one.

"The Petitioners are trying to use the Income Tax Act to challenge the meaning of 'marriage/ wife-husband/ spouse' as statutorily understood under different marriage acts and so applied under the Income Tax Act. This in my humble submission is not permissible. The Petitioners seek to get the benefit of 'spouse' under the Income Tax without first getting their relationship legally recognised as 'marriage/ spouse/wife-husband.' I say that 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. The Petitioners have not brought on record any law which recognises their relationship as marriage or spouse. Rather the petitioners are trying to submit that the Income Tax Act should give the definition of marriage/spouse/wife-husband contrary to their meaning/definition under different marriage act," the IT Department said.

Notably, an identical case is being heard by singe-judge Justice BM Shyam Prasad of the Karnataka High Court, wherein the petition has been filed by software engineers Akhilesh Godi and Anurag Kalia, both urging the court to declare the said section of the IT Act as 'unconstitutional.'

Case Title: Paiyo Ashiho vs Union (Writ Petition 3784 of 2025)