TMI Blog1982 (9) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the principle of mutuality could be invoked in the case of the assessee ? (3) Whether, on the facts and in the circumstances of the case, on reading of the provisions contained in section 2(15), section 11 and section 10(23A) together, is the assessee an institution for charitable purpose or is it covered by section 10(23A) ? (4) Whether, on the facts and in the circumstances of the case, the interest income derived by the assessee from securities and other investments is liable to tax under section 28(1) of the Act ? (5) Whether, on the facts and in the circumstances of the case, sections 70 and 71 of the Act could be held to be applicable ? (6) Whether, on the facts and in the circumstances of the case, the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for " charitable purpose " and, therefore, not liable to pay income-tax. It also urged that the income was not taxable on the principle of mutuality. Its activities were not for earning profits. Its entire expenses were liable to be adjusted against income from interest. The assessee contended that in fact it had not earned any income but was running in loss. The loss worked out by it could not be ignored on the ground that certain receipts were not taxable. The AAC did not accept any of these contentions of the assessee and confirmed the assessments for all the five years. The assessee preferred an appeal to the Income-tax Appellate Tribunal. Before the Appellate Tribunal all those points were reagitated which were taken up before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2(15) of the Act and, therefore, its entire income is entitled to exemption under s. 11 of the Act. The functions of a State Bar Council, as enumerated in s. 6 of the Advocates Act, 1961, make it amply clear that the Bar Council is a body for the advancement of an object beneficial to the public or a section of the public as distinguished from an individual or group of individuals. In support of his submissions, the learned counsel: has placed reliance on the decisions in Bar Council of Maharashtra v. CIT [1980] 126 ITR 27 (Bom) and CIT v. Bar Council of Maharashtra [1981] 130 ITR 28 (SC). In the Bombay case the question for consideration before a Division Bench was whether the Bar Council of Maharashtra was a body intended for the adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concluded that the Bar Council is constituted to benefit the public at large by having on its roll, advocates who are not only competent so far as the law is concerned but who are respectable, fit and proper persons to belong to the noble profession of lawyers. The State Bar Council is, thus, constituted primarily with the object of general public utility and the income of such body is entitled to exemption under s. 11 of the Act. The Commissioner appealed to the Supreme Court ([1981] 130 ITR 28) against the above judgment of the Bombay High Court in CIT v. Bar Council of Maharashtra [1980] 126 ITR 27. The Supreme Court also considered the functions of a State Bar Council as enumerated under s. 6(1) of the Advocates Act and held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charitable purpose within the meaning of s. 2(15) of the Act. The next point for our consideration is whether the assessee is covered by s. 10(23A) of the Act. In other words, the point is whether the assessee, being an institution for charitable purpose, can claim relief under s. 10(23A) and s. 11 of the Act simultaneously. In the decision in CIT v. Bar Council of Maharashtra [1980] 126 ITR 27 (Bom)-on appeal [1981] 130 ITR 28 (SC), the learned counsel for the Revenue had sought to raise a similar point but their Lordships did not permit him to agitate this point because the Tribunal had decided it against the Revenue and the Revenue had not agitated this point before the High Court. Their Lordships, however, observed: " we may point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and a common seal, with power to acquire and hold property, both movable and immovable. A Bar Council may sue or be sued by the name by which it is known. Thus, it is clearly a juristic person and would be covered by the expression artificial juridical person ". The assessee is, therefore, a person within the meaning of s. 2(31) of the Act and a taxable entity. The remaining questions Nos. 2 and 4 to 7 do not need any answer, in view of our answers to questions Nos. 1 and 3. Our answer to question No. 1 is in the affirmative, in favour of the Revenue and against the assessee. Our answer to question No. 3 is that the assessee is an institution for charitable purpose within the meaning of s. 2(15) of the Act. The assessee is also ent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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