Patna High Court
The Bar Council, Patna High Court vs Commissioner Of Income-Tax, Bihar And ... on 17 August, 1949
Equivalent citations: [1949]17ITR452(PATNA), AIR 1951 PATNA 430
JUDGMENT
AGARWALA, C.J., and MEREDITH, J. - This is a reference under Section 66(1) of the Income-tax Act. The question referred to this Court is "whether the income received by the Bar Council, Patna High Court, by way of fees paid by the advocated for enrolling themselves to practise in the High Court and/or registration fee from apprentices of law is exempt under Section 4(3)(i) of the Income-tax Act." The Bar Council maintains a list of advocates. and it is condition precedent to the right to practices in this Court that an advocate should be on the list maintained by the Bar Council. In order to have his name on this list an advocate is charged a fee prescribed by the Bar Council. A further condition to practise in this Court is that an advocate shall have served a certain terms of apprenticeship with an advocate whose name appears on a list of advocates advocates maintained by the Bar Council and approved by the High Court. These appear to be the only functions of the Bar Council with which we are concerned. The question referred to us is whether the fees realized by the Council for putting an advocates name on the list of advocates and the registration fee for appretices for their training under an advocate approved by the Bar Council are exempt from income-tax. The question specifically refers to Section 4(3)(i).
Section 4(3) provides that- "Any income, Profits or gains falling within the following classes shall not be included in the total income of the person receiving them."
Clause(i) is- "Any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes, and in the case of property so held in part only for such purposes, the income applied, or finally set apart for application, thereto."
It is quite obvious that fees received by the Bar Council for enrolling advocates or for registering apprentices is not income derived from property held under trust or other legal obligation. The same view was taken by the Madras High Court in Commissioner of Income-tax, Madras v. The Bar Council, Madras. The answer to the question referred to us, therefore, must be in the negative. The Income-tax Department is entitled to the costs of the reference which we assessee at Rs. 250.
Reference answered in the negative.