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TMI Blog1978 (6) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... y, For performing these duties, the Advocate-General shall receive a salary of Rs. 1,250 per month and a remuneration of Rs.100 per day for appearance in subordinate Courts and Tribunals and Rs.200 per day for appearance before the High Court and Rs.500 per day for appearance before the Supreme Court. The short question to be considered in these two appeals is whether remuneration received by the assessee for appearance in the High Court, Supreme Court and subordinate Courts should be assessed under the head" salary under s.15 of the Income-tax Act, 1961 or Whether they are income earned in the exercise of profession and hence to be assessed under s.28. 3. For asst. yr. 1971-72, the ITO at the time of making the original assessment treated the receipts as professional income and allowed the deductions claimed. On the basis of the audit note, the ITO later reopened the assessment and came to the conclusion that the Advocate-General is an employee of the State Government and the receipts should be assessed as salary income. The ITO's conclusion that employer-employee relationship exist between the State Government and the assessee is based on the following facts:- (a) The Advoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the head "salary" is that there must exist a relationship of employee and employer between the assessee and the person making the payment. In other words, before the payment from one party to the other can be regarded as salary within the meaning of ss. 15 to 17 of the IT Act, 1961, the relationship of employer and employee or master and servant is essential. The test, which is uniformly applied in order to determine such relationship is the existence of a right of control in respect of the manner in which the work is to be done. The nature and extent of control, which is requisite to establish the relationship of employer and employee must necessarily vary from business to business. The Supreme Court in the case of Dharangadhara Chemical work Ltd.(1) pointed out that the test of control was not one of universal application and the correct method of approach would be to consider whether having regard to the nature of the work, there was due control and supervision by the employer. In a case, where the master and servant or employer and employee relationship exist, the master can direct the activities of the employee and determine what should not be done by him and the employee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nter a Holle Prosequi. In exercising the statutory functions, the Advocate-General acts in a quasi-judicial capacity and the Government has no control nor can it issue instructions to the Advocate-General when he discharges his statutory duties. Taking into consideration the hoary tradition and the historical background behind the creation of the post of Advocate-General and constitutional responsibility and the statutory obligations undertaken by the assessee as Advocate-General, there is no s cope for the existence of any kind of control or supervision over the work done by the assessee as Advocate-General for the State Government. From the degree of independence enjoyed by the Advocate-General in the matter of advising the Government on all legal matters and in discharging his constitutional responsibilities and statutory functions devolving on him as Advocate-General of the State Government, it is difficult to conceive a relationship of master and servant between the State Government and the assessee. It will be indeed preposterous to suggest that the assessee was under the control of Government while discharging his constitutional responsibilities and performing other statutor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed as professional earning. it was further pointed out whether such engagement or employment is merely incidental to the assessee's profession depends on the duration of the employment and other circumstances of the case. When a processional person takes an assignment, which amounts to a contract for service and not a contract of service, it is an engagement as distinguished from a mere employment and since the engagement is in the course of carrying on of a profession, the emoluments are taxable under the head "income from business or profession." In the present case, the assessee on account of his professional skill, ability and reputation was chosen to the high office of Advocate-General to the State Government. The engagement of the assessee as Advocate-General under a contract of service for conducting cases in Courts is merely incidental to the exercise of his profession and the remuneration received by him, therefore, should be assessed as his processional income. 12. An employment must be distinguished from profession. A person may have an employment and be exercising his profession at the same time. For example, an advocate may be exercising his profession in Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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