COMMISSIONER OF INCOME TAX BOMBAY Vs. BAR COUNCIL OF MAHARASHTRA BAR COUNCIL OF INDIA INTERVENER; BAR COUNCIL OF GUJARAT

JUDGEMENT

(1.) THE Judgment of the court was delivered by -

(2.) THESE appeals by special leave raise the question : "whether on the facts and in the circumstances of the case the assessee- council could be taken to be a body intended to advance any object of general public utility falling within S. 2(15) for purposes of S. 11 of the Income Tax Act, 1961?"

(3.) THE matter was carried in further appeal to the Income Tax Appellate tribunal and since by that time the central government had accorded approval to the assessee for the purpose of S. 10(23-A) by a notification dated 5/08/1966 with effect from 28/12/1961, the tribunal held that the assessee-Gouncil was entitled to exemption under S. 10(23-A) in respect of its income by way of enrolment fees. In regard to the income by way of interest on the securities the tribunal observed that the character of the body holding the securities was not by itself decisive, that safeguarding the rights, privileges and interest of advocates on its roll could not be said to be an object of general public utility, that the real question to be considered under S. 11 was whether the securities were held for any charitable purpose or not and the tribunal found that there was no evidence or material on record touching this aspect. It, therefore, remanded the case back to the Appellate Assistant Commissioner and directed him to dispose of the case by examining the question as to the purpose for which the securities were held by the assessee-Council. It observed that if the said securities were held for educational purpose or for any other charitable purpose then the exemption under S. 11 would be admissible to the extent available under the law. At the instance of the assessee-Gouncil the question set out at the commencement of this judgment was referred to the High court for its decision under S. 256(1) of the Act. THE High court took the view that having regard to the obligatory <PG>311</PG> functions enjoined upon a State Bar council under S. 6 of the Advocates Act the aasessee-Council could be regarded as a body constituted for general public utility and that the entire income of the body would be exempt from tax under S. II of the Income Tax Act, 1961. In its view the advancement of any object beneficial to the public or a S. of the public as distinct from an individual or a group of individuals would be a charitable purpose as defined in S. 2 (15) of the Income Tax Act and in this view of the matter the High court answered the question in the affirmative and against the Revenue. It is this view of the High court that is being challenged by the Revenue before us in these appeals.