Supreme Court declines to review order for TDS from salaries of nuns and priests working in aided schools

New Delhi: The Supreme Court has recently declined to review its November 7, 2024 order, which has confirmed a Madras High Court's decision, holding that salaries paid to nuns and priests working as teachers, in aided schools run by the church, are also subject to income tax provisions. 

A bench of Chief Justice of India Sanjiv Khanna and Justices J B Pardiwala and Manoj Misra dismissed a batch of review petitions in the case of 'Institute of Franciscan Missionaries of Mary Vs Union of India & Ors'.

In its April 16, 2025 order, the court also rejected the plea for oral hearing and listing of the review petitions.

"Having gone through the review petitions and also the documents enclosed, we do not find any good ground and reason to review the order dated 07.11.2024," the bench said.

The review petition is considered in judges chambers as per the Supreme Court Rules by the circulation of papers.

A bench led by Chief Justice of India D Y Chandrachud (since retired) had in November, last dismissed over 90 petitions’ by various missionaries to exempt salaried nuns and priests from paying income tax, by holding that the money is given to the school in the form of a salary grant, therefore it cannot be exempted from TDS.

A single judge of the Madras High Court had ruled in favour of the priests and nuns. The high court judge had said that their salaries cannot be subject to income tax as the money is not accrued to them but only to the diocese. The Income Tax Department filed an appeal against this order before a division bench of the high court, which reversed this order in 2019, leading to filing of the appeal before the apex court.