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M/s Advocates Welfare Fund of the Bar Council of Tamil Nadu and M/s Bar Council of Tamil Nadu, Versus The Deputy Director of Income Tax (Exemptions) – II, Chennai and Vica-Versa

2016 (8) TMI 554 - ITAT CHENNAI

Exemption u/s 11 - grant of registration under Section 12AA - assessee-Bar Council of Tamil Nadu - Held that:- As even though the preamble of order of the Director of Income Tax (Exemptions) dated 29.08.2011 says “Bar Council of Tamil Nadu and its unit Advocates' Welfare Fund”, the body of the order clearly says that the registration was granted only to the Fund and not to the Bar Council. The CBDT, however, after examining the application filed by the Bar Council of Tamil Nadu, found that the r .....

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he Income-tax Act, each statutory body has to file independent application for registration under Section 12AA of the Act. Be that as it may, now registration was granted apparently to the Advocates' Welfare Fund by the order of the Director of Income Tax (Exemptions) dated 29.08.2011 and the CBDT has condoned the delay in filing the application for registration under Section 12AA of the Act for the assessment years 2003-04 to 2010-11 to the Bar Council of Tamil Nadu. In view of these factual co .....

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the order of CBDT dated 27.05.2016 and thereafter decide the same in accordance with law after giving a reasonable opportunity to the assessee. - ITA Nos.1195, 1196, 1197 & 1198/Mds/2014, ITA Nos.1603 & 1604/Mds/2014, ITA Nos.1199, 1200, 1201, 1202, 1203 & 1204/Mds/2014, ITA Nos.1605 & 1606/Mds/2014 - Dated:- 15-7-2016 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER For The Assessees : Sh. R. Venkatesh, CA For The Revenue : Sh. P. Radhakrishnan, JCIT ORDER All the appeals of two independent assessees and .....

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ofession of legal practice in India. The assessee-Bar Council of Tamil Nadu has established a Welfare Fund for the benefit of practicing Advocates. According to the Ld. representative, Advocates Welfare Fund is not a legal entity. In fact, it is a fund established by Bar Council of Tamil Nadu for the welfare of legal practitioners. However, both the authorities below treated the Advocates Welfare Fund as a separate legal entity and assessed the income. Referring to the order of the Director of I .....

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for registration under Section 12AA of the Act. The CBDT, in fact, condoned the delay in filing the application for the assessment years 2003-04 to 2010-11. However, the CBDT kept it open to grant registration under Section 12AA to the Director of Income Tax (Exemptions). Since the delay in filing the application for registration was condoned for assessment years 2003-04 to 2010-11, according to the Ld. representative, the assessee s claim for exemption under Section 11 of the Act has to be exa .....

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ditions prescribed under the provisions of the Act. After the order of the Director of Income Tax (Exemptions), the matter has to be reexamined by the Assessing Officer. Therefore, the Ld. representative submitted that the matter may be remitted back to the file of the Assessing Officer for reconsideration. 4. On the contrary, Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that though the assessee claims that Advocates Welfare Fund established by Bar Council of Tamil Nadu, .....

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Ld. representative for the assessee that the Advocates' Welfare Fund was established by Bar Council of Tamil Nadu and it is not a separate legal entity is misconceived. 5. Referring to the order of the Director of Income Tax (Exemptions) dated 29.08.2011, the Ld. D.R. submitted that the registration was granted to Advocates Welfare Fund under Section 12AA of the Act. However, the application filed by the Bar Council of Tamil Nadu for condonation of delay for assessment years 2003- 04 to 2010 .....

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' Welfare Fund has not filed any application for condoning the delay for earlier assessment years. Therefore, it may not be necessary to remit the matter back to the file of the Assessing Officer. 6. I have considered the rival submissions on either side and perused the relevant material available on record. The order of the Director of Income Tax (Exemptions) dated 29.08.2011 clearly says Bar Council of Tamil Nadu and its unit Advocates' Welfare Fund in the preamble portion of the order .....

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r Council of Tamil Nadu has filed the application before the CBDT for condonation of delay in filing the application for registration under Section 12AA of the Act for the assessment years 2003-04 to 2010-11. In fact, the delay was condoned and the matter was left to the discretion of the Director of Income Tax (Exemptions) to satisfy himself about the fulfilment of the conditions prescribed under the Act which are necessary for granting registration under Section 12AA of the Act. It is not in d .....

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7. Now coming to the Advocates' Welfare Fund, the Revenue claims that the assessee itself applied for Permanent Account Number to treat itself as a separate legal entity. However, the assessee claims that it is a part of Bar Council of Tamil Nadu, therefore, it cannot be treated as a separate legal entity. I have carefully gone through the Advocates Act, 1961 and the Advocates' Welfare Fund Act, 2001. Section 3 of Advocates Act, 1961 enables to constitute Bar Councils in the respective S .....

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of the Advocates' Welfare Fund Act, 2001 enables the respective State Governments to constitute a fund called Advocates' Welfare Fund . Section 4 of the Advocates' Welfare Fund Act, 2001 enables the respective State Governments to appoint Trustee Committee for the purpose of administering the Fund. The office-bearer of the Bar Council of Tamil Nadu and Advocates' Welfare Fund are totally different. Bar Council of Tamil Nadu was administered by the elected Chairman or Vice-Chairma .....

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ates' Welfare Fund shall be a body corporate having perpetual succession and common seal with power to acquire and hold and dispose of the property. Therefore, the Parliament in its wisdom made it very clear that Bar Council of Tamil Nadu is a separate legal entity and Advocates' Welfare Fund is another legal entity. Therefore, this Tribunal is of the considered opinion that the two entities have to be treated separately and the registration, if any, for claiming exemption under Section .....

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ax (Exemptions) dated 29.08.2011 says Bar Council of Tamil Nadu and its unit Advocates' Welfare Fund , the body of the order clearly says that the registration was granted only to the Fund and not to the Bar Council. The CBDT, however, after examining the application filed by the Bar Council of Tamil Nadu, found that the registration was granted with effect from 25.02.2011 on the basis of application dated 25.02.2011. Therefore, there is a confusion as to whether the Bar Council of Tamil Nad .....

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