TMI Blog1981 (4) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... g the accounting periods relevant to the assessment years 1962-63, 1963-64 and 1964-65, the assessee derived income from securities (interest) and other income by way of enrolment fees, particulars whereof are as follows : Assessment year Interest on securities Other income Rs. Rs. 1962-63 3,779 28,035 1963-64 8,629 3,04,103 1964-65 9,356 96,322 The ITO subjected to tax the income from both the sources for all the three years. In appeals preferred to the AAC, it was contended by the assessee that its other income by enrolment fees was exempt under s. 10(23A) and interest on securities was exempt from tax under s. II of the I.T. Act, 1961. The AAC negatived the exemption claimed under s. 10(23A) in the absence of the Central Govt.'s notification according approval to the association and with regard to the claim for exemption in respect of the interest on securities he held that it was not established that the securities were held on trust for any charitable purpose. He took the view that the main object of the assessee-council was to benefit the legal profession (its members) and, therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the revenue sought to raise two contentions. First, he urged that the relief claimed under s. 11 was ruled out by reason of relief having been obtained by the assessee-council in respect of its income from enrolment fees under S. 10(23A) of the Act. According to him, s. 10(23A), while exempting from tax any income of an association or institution established in India having as its object the control, supervision, regulation and encouragement of the profession of law, medicine, accountancy and any other profession as the Central Govt. may specify, has expressly excluded from exemption such association's or institution's income chargeable under the head "Interest on securities" or "Income from house properties " or " Any income received in rendering any specific service ", etc., and, therefore, what has been expressly excluded from exemption under this provision could not be or was not intended to be exempt under S. 11 of the Act. In other words, the assessee-council's claim for exemption in respect of interest on securities under s. 11 was ruled out by reason of s. 10(23A) of the Act. Secondly, counsel contended that, on merits, the High Court's view that the assessee-council ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sought by the assessee-council nor when the matter was being argued in the High Court. In these circumstances, it is clear to us that the revenue acquiesced in the view taken by the Tribunal that the claim for exemption under s. 11 of the Act could not be said to be ruled out by reason of the provisions of s. 10(23A). We, therefore, proceed to deal with the second contention which was principally argued before us in these appeals. Under s. 11 of the I.T. Act, 1961, subject to the conditions therein specified, income derived from property held under trust wholly for charitable or religious purposes to the extent to which such income is applied to such purposes in India is exempt from the tax liability under the Act and s. 2(15) gives an inclusive definition of the expression "charitable purpose " thus: " ' Charitable purpose ' includes relief of the poor, education, medical relief and the advancement of any other object of general public utility not involving the carrying on of any activity for profit. " It may be noticed that whereas any object of general public utility was included in the definition of " charitable purpose " in the 1922 Act, the present definition has inse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose as given in our Act, since it embraces (any other object of general public utility ", goes further than the definition of charity to be derived from the English cases. Under the English law of charity, a trust is charitable only if it is within the spirit and intendment of the preamble to the statute of Elizabeth (43 Eliz. ch. 4) and all objects of general public utility are not necessarily charitable, some may or some may not be depending upon whether they fall within the spirit and intendment of the statute of Elizabeth. Under our definition every object of general public utility would be charitable subject only to the condition imposed by the restrictive words inserted in the 1961 Act. It is because of this basic difference between Indian law and English law of charity that Lord Wright in All India Spinners' Assn. v. CIT [1944] 12 ITR 482 (PC) uttered a warning against blind adherence to English decisions oil the subject thus (p. 486): " The Indian Act gives a clear and succinct definition which must be construed according to its actual language and meaning. English decisions have no binding authority on its construction and though they may sometimes afford help or guidan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and invest the funds of the Bar Council ; (g) to provide for the election of its members ; (h) to perform all other functions conferred on it by or under this Act ; (i) to do all other things necessary for discharging the aforesaid functions. (2) A State Bar Council may constitute one or more funds in the prescribed manner for the purpose of (a) giving financial assistance to organise welfare schemes for the indigent, disabled or other advocates ; (b) giving legal aid or advice in accordance with the rules made in this behalf. " Sections 9, 9A and 10 of the Act provide for the constitution of various committees for the purposes mentioned therein. Section 15 confers power on the Bar Council to make rules to carry out the purposes of this chapter. The rest of the provisions of the Act are not material for the purpose of the issue under consideration. Counsel for the revenue contended that the primary object or purpose with which the Bar Council of a State is constituted is to benefit the members of the legal profession in as much as under s. 6(1)(d) it is an obligatory function of the State Bar Council to safeguard the rights, privileges and interests of the advocates on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty service of competent lawyers to the litigating public, to spread legal literacy, promote law reforms and provide legal assistance to the poor while the benefit accruing to the lawyer-members is incidental. It is true that sub-s. (2) provides that a State Bar Council may constitute one or more funds for the purpose of giving financial assistance to organise welfare schemes for the indigent, disabled or other advocates; but it is an optional or discretionary function to be undertaken by the council. Apart from that, admittedly, the assessee-council has not so far constituted any such fund for the purpose specified in the instant case. As and when such a fund is constituted, question may arise for consideration and the court may have to decide whether the function so undertaken by a State Bar Council has become the dominant purpose for which that council is operating. Having regard to the preamble of the Act and the nature of the various obligatory functions including the one under cl. (d) enjoined upon every State Bar Council under s. 6(1) of the Act, it is clear that the primary or dominant purpose of an institution like the assessee-council is the advancement of the object of ge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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