G.C. Bharuka, J.@mdashAll these tax cases arise out of references made by the Income Tax Appellate Tribunal u/s 256(1) of the Income Tax Act, 1961 (hereinafter to be referred to as " the Act ").
2. Since the basic question of law in all these reference applications is common, these have been heard together and are being disposed of by this common judgment.
3. Tax Cases Nos. 16, 17 and 18 of 1978 relate to the assessment of income for the assessment years 1967-68, 19G8-69 and 1969-70. The common question of law referred for the opinion of this court in all these three cases is as follows :
" Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the income from the guest rooms received from the members of the club for their use and the use of their guests was not taxable ? "
4. Tax Cases Nos. 19 of 1978 and 20 of 1978 relate to the levy of penalty u/s 271(1)(a) of the Act for the late filing of returns for the assessment years 1968-69 and 1969-70 involving the following questions of law :
" (i) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in cancelling the order of penalty u/s 271(1)(a) of the Act?
(ii) Whether, on the facts and in the circumstances of the case, the Appellate Assistant Commissioner was justified in directing the Income Tax Officer to recompute the amount of penalty and the Tribunal was justified in confirming the same ? "
5. In Tax Cases Nos. 285 to 291 of 1980, the common question of law referred for the opinion of this court is as under ;
" Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the assessee''s contention that the income from letting out the rooms and halls to the members of the club and their guests was not taxable in the assessment years 1970-71 to 1976-77 ?"
6. The assessee, Messrs. Bankipur Club Ltd., is a company registered under the Companies Act, 1956. The liability of its shareholders is limited by guarantee. The main object of the club as disclosed in the memorandum of association is to afford to its members all the usual privileges, advantages, conveniences and accommodation of a club.
7. The club has a bar where drinks are supplied to the members and their guests. The club also serves refreshments and meals to its members. It has also a set of rooms which are let out to its members. It has got a hall which is let out with furniture to the Rotary Club, Lions Club, etc., on payment. Apart from permanent members, the club, under its articles of association, has also temporary members, lady members, honorary members and patrons. The guests of the members cannot eat or drink of their own accord meaning thereby that nothing can be sold to them even if they pay. Members can only order for services to be rendered to their guests for which the members alone pay or sign the bills. The set of rooms are also let out only to the members and if guests stay, the rooms are booked in the names of the members alone who alone have to pay the charges. In these tax cases, the dispute resales only with regard to certain payments which have been made by the members.
8. Keeping in view the aforesaid facts and the circumstances of the case and for the reasons set out in detail in Tax Case No. 54 of 1980
S.B. Sanyal, J.
9. I agree with the judgment just now delivered by my learned brother, Bharuka J.
Aftab Alam, J.
10. I agree.
