Commissioner of Income Tax vs Bar Council of U.P.

The Tribunal (Allahabad Bench) Allahabad, referred the following questions for opinion of this Court u/s 256(1) of the income tax Act, 1961 (''the Act'') : 1. Whether, on the facts and in the circumstances of the case, the Tribunal was in law justified in holding that the income from sales of forms and other misc. receipts was not taxable u/s 10(23A) of the income tax Act ?

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in allowing expenses at the rate of 25 per cent of the interest income which is being brought to tax, in view of the provision contained in sections 12 and 57 of the of the income tax Act, 1961 ?

Whether, the allowances of expenses at the rate of 25 per cent of the income from properties and interest on fixed deposit could be said to be reasonably relatable thereto ?

This case relates to the assessment year 1974-75. In the case of the assessee itself, identical questions were referred for the assessment years 1967-68 to 1971-72 u/s 256(2) at the instance of the revenue to this Court and then by judgment dated 7-3-1991 in COMMISSIONER OF Income Tax Vs. BAR COUNCIL OF UTTAR PRADESH., this Court found as follows :

Both learned standing counsel for the Revenue, Shri Katju, and learned counsel for the assessee, Shri Gulati, say that these questions have become academic in view of the decision of this Court in Bar Council of Uttar Pradesh Vs. Commissioner of Income Tax, wherein it has been held that the Bar Council of Uttar Pradesh is a charitable institution since its purposes are charitable purposes with the meaning of section 2(15) of the income tax Act. Once it is held that it is a charitable institution, sections 11 to 13 of the income tax Act get attracted and it is evident that its case will be dealt with under these provisions. By saying so, however, we may not be understood as holding that the Bar Council is not entitled to the benefits of section 10(23A) of the Act in respect of its income derived from sale of forms and other miscellaneous receipts which benefit has already been granted to it in pursuance of the aforesaid judgment of this Court.

For the above reasons, we decline to answer the questions referred. We return the references to the Tribunal unanswered. The Tribunal shall pass final orders u/s 260 of the Act in the light of the judgment of this Court referred to above.

Following the above decision and for the same reasons, we also decline to answer the aforementioned questions. We return the references to the Tribunal unanswered. The Tribunal shall pass final orders u/s 260 in the light of the aforesaid authority.