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2020 (2) TMI 992 - HC - Income TaxExemption u/s 10(23A) - eligibility of the Chhattisgarh State Bar Council to get exemption - HELD THAT - As held that the course pursued by the Respondent/Department was not correct or sustainable and a declaration was made to the effect that the State Bar Council was entitled to get exemption, which was to be have an effect from the previous years as well; thus, allowing the writ petition, which is now put to challenge in this appeal. During the course of hearing, it is virtually conceded that there is no dispute with regard to the genesis of the case; particularly, as to the formation of the new State of Chhattisgarh, after having the same carved out from the erstwhile undivided State of Madhya Pradesh. It is also a fact conceded that there has to be only one Bar Council for the entire State as per the scheme of the Advocates Act and that the Bar Council of the undivided State was granted exemption in terms of Section 10(23A). After formation of the new State of Chhattisgarh, pursuant to the Act of 2000, the erstwhile Bar Council came to be separated as two different Bar Councils. Needless to say that a formal application had to be submitted by the Chhattisgarh State Bar Council for continuing to enjoy the benefit of exemption, but that is only a technical and procedural formality, insofar as the formation of new State and formation of the new State Bar Council is a statutory consequence. This being the position, this Court is of the firm view that the analysis made by the learned Single Judge with regard to the course pursued by the Department and declaration of eligibility of the Chhattisgarh State Bar Council to get exemption in terms of Section 10(23A) of the Act of 1961 are not liable to be interdicted in any manner.
Issues:
Delay in filing writ appeal condonation - Applicability of Circular No. 3/2018 - Exemption sought under Section 10(23A) of Income Tax Act, 1961 - Correctness of verdict allowing writ petition by State Bar Council of Chhattisgarh - Formation of separate Bar Council after division of State - Grant of exemption to Chhattisgarh State Bar Council. Analysis: The judgment addressed the issue of delay in filing the writ appeal and granted condonation for the delay of 79 days. The applicability of Circular No. 3/2018 was discussed, clarifying that monetary limits mentioned in the circular do not apply to writ matters. The main issue revolved around the correctness and sustainability of the verdict allowing the writ petition by the State Bar Council of Chhattisgarh. The appeal challenged the decision that declined exemption sought under Section 10(23A) of the Income Tax Act, 1961, by the Income Tax Department, fixing a tax liability for a specific year. The facts revealed that the Respondent/Assessee, a statutory body under the Advocates Act, enjoyed exemption in the undivided State of Madhya Pradesh. After the division, a separate Bar Council for Chhattisgarh was formed, leading to a dispute regarding the continuation of the exemption. The Assessing Officer disallowed the exemption due to the absence of a specific certificate for the Chhattisgarh State Bar Council. The matter went through various levels of appeal, including the Tribunal, which remanded the case back to the Assessing Officer based on a pending writ petition. The judgment highlighted that the formation of a new State and a new Bar Council was a statutory consequence, requiring a formal application for exemption. The Court upheld the decision of the learned Single Judge, declaring the eligibility of the Chhattisgarh State Bar Council for exemption under Section 10(23A) of the Income Tax Act, 1961. It emphasized that the procedural formality of submitting an application should not negate the statutory right of the Bar Council to seek exemption. In conclusion, the High Court dismissed the appeal, affirming the decision that the Chhattisgarh State Bar Council was entitled to exemption under Section 10(23A) of the Income Tax Act, 1961, from the previous years as well. The judgment underscored the statutory implications of the division of the State and the formation of a new Bar Council, emphasizing the continuity of rights despite technical procedural requirements.
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