2018 INSC 0143 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.2706 OF 2018 (arising out of SLP (C) No(s). 30194/2010) INCOME TAX OFFICER, MUMBAI ….APPELLANT(S) VERSUS  VENKATESH PREMISES COOPERATIVE  SOCIETY LTD. ….RESPONDENT(S) with CIVIL APPEAL NO. 3827 OF 2012 CIVIL APPEAL NO. 3271 OF 2012 CIVIL APPEAL NO.3272 OF 2012 CIVIL APPEAL NO.1180 OF 2015 CIVIL APPEAL NO.2997 OF 2017 CIVIL APPEAL NO.8741 OF 2017 CIVIL APPEAL NO(s).2708 OF 2018 (arising out of SLP(C) No. 32061/2010) CIVIL APPEAL NO(s).2707 OF 2018 (arising out of SLP(C) No. 30195/2010) CIVIL APPEAL NO(s).2713 OF 2018 (arising out of SLP(C) No. 32914/2010 CIVIL APPEAL NO(s).2710 OF 2018 (arising out of SLP(C) No. 32913/2010 CIVIL APPEAL NO(s).2709 OF 2018 (arising out of SLP(C) No. 32063/2010) CIVIL APPEAL NO(s).2711 OF 2018 (arising out of SLP(C) No. 32065/2010) CIVIL APPEAL NO(s).2712 OF 2018 (arising out of SLP(C) No. 34087/2010) 1 CIVIL APPEAL NO(s).2716 OF 2018 (arising out of SLP(C) No. 35120/2010 CIVIL APPEAL NO(s).2714 OF 2018 (arising out of SLP(C) No. 32918/2010) CIVIL APPEAL NO(s).2715 OF 2018 (arising out of SLP(C) No. 34061/2010) CIVIL APPEAL NO(s).2717 OF 2018 (arising out of SLP(C) No. 128/2011) CIVIL APPEAL NO(s).2728 OF 2018 (arising out of SLP(C) No. 16967/2011) CIVIL APPEAL NO(s).2718 OF 2018 (arising out of SLP(C) No. 133/2011) CIVIL APPEAL NO(s).2720 OF 2018 (arising out of SLP(C) No. 367/2011) CIVIL APPEAL NO(s).2721 OF 2018 (arising out of SLP(C) No. 370/2011) CIVIL APPEAL NO(s).2719 OF 2018 (arising out of SLP(C) No. 378/2011) CIVIL APPEAL NO(s).2722 OF 2018 (arising out of SLP(C) No. 2623/2011) CIVIL APPEAL NO(s).2724 OF 2018 (arising out of SLP(C) No. 2745/2011 CIVIL APPEAL NO(s).2726 OF 2018 (arising out of SLP(C) No. 4096/2011) CIVIL APPEAL NO(s).2723 OF 2018 (arising out of SLP(C) No. 2744/2011) CIVIL APPEAL NO(s).2725 OF 2018 (arising out of SLP(C) No. 3283/2011) CIVIL APPEAL NO(s).2727 OF 2018 (arising out of SLP(C) No. 5382/2011) CIVIL APPEAL NO(s).2729 OF 2018 (arising out of SLP(C) No. 17102/2011) CIVIL APPEAL NO(s).2730 OF 2018 (arising out of SLP(C) No. 17667/2011) CIVIL APPEAL NO(s).2731 OF 2018 (arising out of SLP(C) No. 19992/2012) CIVIL APPEAL NO(s).2732 OF 2018 (arising out of SLP(C) No. 19993/2012) 2 CIVIL APPEAL NO(s).2733 OF 2018 (arising out of SLP(C) No. 17428/2015) CIVIL APPEAL NO(s).2734 OF 2018 (arising out of SLP(C) No. 29755/2013) CIVIL APPEAL NO(s).2735 OF 2018 (arising out of SLP(C) No. 17430/2015) CIVIL APPEAL NO(s).2736 OF 2018 (arising out of SLP(C) No. 17431/2015) CIVIL APPEAL NO(s).2740 OF 2018 (arising out of SLP(C) No. 37702/2016) CIVIL APPEAL NO(s).2739 OF 2018 (arising out of SLP(C) No. 36157/2016) CIVIL APPEAL NO(s).2737 OF 2018 (arising out of SLP(C) No. 34865/2016) CIVIL APPEAL NO(s).2738 OF 2018 (arising out of SLP(C) No. 34866/2016) CIVIL APPEAL NO(s).2741 OF 2018 (arising out of SLP(C) No. 4122/2017) CIVIL APPEAL NO(s).2742 OF 2018 (arising out of SLP(C) No. 4126/2017) CIVIL APPEAL NO(s).2743 OF 2018 (arising out of SLP(C) No. 12234/2017) CIVIL APPEAL NO(s).2766­2767 OF 2018 (arising out of SLP(C)Nos.6582­6583/2018 @ Diary No(s). 14603/2017) CIVIL APPEAL NO(s).2747 OF 2018 (arising out of SLP(C) No. 19340/2017) CIVIL APPEAL NO(s).2744 OF 2018 (arising out of SLP(C) No. 18935/2017) CIVIL APPEAL NO(s).2768­2769 OF 2018 (arising out of SLP(C)Nos.6585­6586 @ Diary No(s). 14672/2017) CIVIL APPEAL NO(s).2771­2772 OF 2018 (arising out of SLP(C)Nos.6587­6588/2018 @ Diary No(s). 14675/2017) CIVIL APPEAL NO(s).2770 OF 2018 (arising out of SLP(C)No.6589/2018 @ Diary No(s). 14674/2017) CIVIL APPEAL NO(s).    2746     OF 2018 (arising out of SLP(C) No. 18944/2017) CIVIL APPEAL NO(s).    2745     OF 2018 (arising out of SLP(C) No. 18943/2017) 3 CIVIL APPEAL NO(s).    2765     OF 2018 (arising out of SLP(C)No.6550/2018 @ Diary No(s). 18867/2017) JUDGMENT NAVIN SINHA, J. Delay   condoned.     Leave   granted   in   all   the   Special   Leave Petitions.  2. A common question of law arises for consideration in this batch   of   appeals,   whether   certain   receipts   by   co­operative societies,   from   its   members   i.e.   non­occupancy   charges, transfer   charges,   common   amenity   fund   charges   and   certain other   charges,   are   exempt   from   income   tax   based   on   the doctrine of mutuality.   The challenge is based on the premise that   such   receipts   are   in   the   nature   of   business   income, generating   profits   and   surplus,   having   an   element   of commerciality and therefore exigible to tax.   The  assessee  in Civil   Appeal   No.1180   of   2015   assails   the   finding   that   such receipts, to the extent they were beyond the limits specified in 4 the   Government   notification   dated   09.08.2001   issued   under Section   79­A   of   the   Maharashtra   Co­operative   Societies   Act, 1960   (hereinafter   referred   to   as   ‘the   Act’)   was   exigible   to   tax falling beyond the mutuality doctrine.  3. The primary facts, for better appreciation shall be noticed from   SLP   (C)   No.30194   of   2010.     The   assessing   officer   held that   receipt   of   non­occupancy   charges   by   the  society   from   its members, to the extent that it was beyond 10% of the service charges/maintenance   charges   permissible   under   the notification   dated   09.08.2001,   stands   excluded   from   the principle of mutuality and was taxable.  The order was upheld by   the   Commissioner   of   Income   Tax   (Appeals).     The   Income Tax   Appellate   Tribunal   held   that   the   notification   dated 09.08.2001   was   applicable   to   co­operative   housing   societies only   and   did   not   apply   to   a   premises   society.     It   further   held that   the   transfer   fee   paid   by   the   transferee   member   was exigible   to   tax   as   the   transferee   did   not   have   the   status   of   a member   at   the   time   of   such   payment   and,   therefore,   the principles   of   mutuality   did   not   apply.     The   High   Court   set 5 aside the finding that payment by the transferee member was taxable   while   upholding   taxability   of   the   receipt   beyond   that specified in the government notification.  4.  Shri   K.R.   Radhakrishnan,   learned   senior   counsel appearing   on   behalf   of   the   Revenue   in   all   the   appeals, submitted that the receipts were exigible to tax no sooner that mutuality came to an end and the receipts had an element of profit,   also   generating   a   surplus,   rendering   commerciality   to the   nature   of   the   activity.     The   benefit   of   a   common   identity between the contributors and the participants could not alone be   the   final   test.     The   Tribunal   had   correctly   held   that   the transferee   not   being   a   member   at   the   time   of   payment,   the doctrine of mutuality had no application to such receipts. The principle   of   mutuality   could   not   be   invoked   to   prevent taxability of high value receipts by a society  selling properties and   then   inducting   such   purchasers   as   members.       The validity   of   the   notification   dated   09.08.2001   having   been upheld   by   the   Bombay   High   Court   in   The   New   India   Co­ operative   Housing   Society   vs.   The   State   of   Maharashtra , 6 2013   (2)   MHLJ   666,   any   receipt   by   the   society   beyond   that permissible   in   the   law   under   the   notification,   was   not   only illegal,   but   also   amounted   to   rendering   of   services   for   profit attracting   an   element   of  commerciality   and   thus   was  taxable. It   stands   to   reason   that   if   the   society   levied   maintenance charge   upon   a   resident   member   at   the   rate   of   Rs.1.35   per sq.ft./p.m.   and   charged   the   much   higher   rate   of   Rs.7/­   per sq.ft./p.m. as non­occupancy charges from others, the society was acting commercially to earn profit. Reliance was placed on Commissioner   of   Income   Tax,   Madras   vs.   Kumbakonam Mutual   Benefit   Fund   Ltd. ,   AIR   1965   SC   96   =   (1964)   8   SCR 204,   Chelmsford   Club   vs.   Commissioner   of   Income   Tax, (2000) 3 SCC 214.  5. Sri   Radhakrishnan,   sought   to   invoke   Article   43B   of   the Constitution   of   India   mandating   professional   management   of co­operative   societies,   to   justify   taxability   of   receipts   beyond that   permissible   under   the   government   notification.   Reliance was   further   placed   on   Article   243ZI   to   submit   that   economic participation   had   to   be   restricted   to   members   and   had   no 7 application   to   a   transferee   who   was   not   a   member,   rendering receipt from them sans mutuality taxable.  6. The   submission   on   behalf   of   the   respondents   shall   be considered   cumulatively   for   convenience   except   to   the   extent necessary.   Relying   on   Mittal   Court   Premises   Co­operative Society   Ltd.   vs.   Income   Tax   Officer ,   (2010)   320   ITR   414 (Bom), it was submitted that the notification dated 09.08.2001 was   restricted   in   its   application   to   housing   co­operative societies   only   and   had   no   application   to   a   premises   Society. Any   receipt   by   the   latter   beyond   the   same   was   thus   not exigible to tax on that ground.  7. The   receipt   by   a   housing   co­operative   society   of   an amount   beyond   that   mentioned   in   the   notification   dated 09.08.2001, if it was contrary to the law, would be actionable at the instance of the person required to pay such charges as was   the   case   in   The   New   India   Co­operative   Housing Society   (supra) .     Such   receipts   will   not   be   exigible   to   tax   so long   as   the   doctrine   of   mutuality   stood   satisfied   by 8 commonality   of   identity   between   the   contributors   and   the participants,   and   the   contribution   by   the   members   was utilised for the common benefit of all the members.   8.  The   receipt   of   transfer   fee   before   induction   to membership under some of the bye­laws shall not be liable to tax   as   the   money   was   returned   in   the   event   that   the   person was   not   admitted   to   membership.     The   appropriation   by   the society took place only  after admission to membership.   Once a person was admitted to membership, the members forming a class,   and   the   identity   of   the   individual   member   being irrelevant,   the   principle   of   mutuality   was   automatically attracted.   The receipt essentially was from a member and the fact that for convenience, part of it may have been paid by the transferee,   was   irrelevant   as   ultimately   the   amount   was utilised   for   the   mutual   benefit   of   the   members   including   the fresh inductee member.  9. Likewise,   non­occupancy   charges   were   levied   for   the purpose of general maintenance of the premises of the Society and   provision   of   other   facilities   and   general   amenities   to   the 9 members.     The   fact   that   such   members   who   were   not   in   self occupation   may   have   had   to   pay   at   a   higher   rate   was irrelevant so long as the receipts were utilised for the benefit of the members as a class.   It is not the case of the Revenue that such receipts had been utilised for any purpose other than the common benefit of the members.  Even if any amount was left over   as   surplus   at   the   end   of   the   financial   year   after   meeting maintenance   and   other   common   charges,   that   would constitute   surplus   fund   of   the   society   to   be   used   for   the common   benefit   of   members   and   to   meet   heavy   repairs   and other contingencies and will not partake the character of profit or commerciality so as to be exigible to tax. 10. Relying   on   Commissioner   of   Income   Tax­21   vs.   Jai Hind   Co­operative   House   Construction   Society ,   (2012)   349 ITR   541   (Bom),   it   was   contended   that   premium   receipts   by   a housing society for allowing a member to construct using extra FSI   was   also   not   taxable   on   principles   of   mutuality   as   the receipts   were   utilised   by   the   society   for   maintenance   and 10 infrastructure including to defray the extra burden on account of the additional FSI constructed.  11.   Fresh construction by a society itself, utilising extra FSI available,   with   grant   of   occupancy   rights   only   to   a   member who   may   have   had   to   pay   more   as   membership   fees   than   an existing member, will likewise not detract from the principle of mutuality as the contribution was ultimately to be used for the maintenance,   repairs   and   facilities   to   members   in   the   society including   the   additional   construction.     There   could   be   no bifurcation  between the receipts and costs  to  deny   exemption to the extent paid by the new members to qualify the same as non­mutual. Crucially, the admission to membership preceded the   payment   and   allotment   of   premises   was   done   by   draw   of lottery. 12. It   was   next   submitted   that   every   receipt   could   not   ipso facto   be   classified   as   income,   relying   on   Commissioner   of Income   Tax,   Mumbai   vs.   D.P.   Sandhu   Bros.   Chembur   (P) Ltd.,   (2005)   273   ITR   1   (SC).     Referring   to   CIT   vs.   Royal 11 Western   India   Turf   Club   Ltd. ,   AIR   1954   SC   85,   it   was submitted   that   so   long   as   the   three   tests   to   determine mutuality and commonality of interests were met, there could not be exigiblity to tax under the general understanding of the doctrine   of   mutuality   that   a   person   could   not   make   a   profit from  himself.     Reliance was also placed on   Commissioner  of Income Tax, Bihar vs. M/s. Bankipur Club Ltd. , (1997) 226 ITR   97   (SC   )   =   (1997)   5   SCC   394   and   Bangalore   Club   vs. Commissioner  of Income  Tax  and  Another,   (2013) 350 ITR 509 (SC)= (2013) 5 SCC 509. 13. We   have   considered   the   submissions   on   behalf   of   the parties. 14. The   doctrine   of   mutuality,   based   on   common   law principles,   is   premised   on   the   theory   that   a   person   cannot make a profit from  himself. An amount received from oneself, therefore, cannot be regarded as income and taxable.   Section 2(24)   of   the   Income   Tax   Act   defines   taxable   income.   The income   of   a   co­operative   society   from   business   is   taxable 12 under   Section   2(24)(vii)   and   will   stand   excluded   from   the principle   of   mutuality.   The   essence   of   the   principle   of mutuality  lies in the commonality  of the contributors and the participants   who   are   also   the   beneficiaries.     The   contributors to   the   common   fund   must   be   entitled   to   participate   in   the surplus   and   the   participators   in   the   surplus   are   contributors to   the   common   fund.     The   law   envisages   a   complete   identity between   the   contributors   and   the   participants   in   this   sense. The   principle   postulates   that   what   is   returned   is   contributed by   a   member.     Any   surplus   in   the   common   fund   shall therefore not constitute income but will only be an increase in the   common   fund   meant   to   meet   sudden   eventualities.     A common   feature   of   mutual   organizations   in   general   can   be stated to be that the participants usually do not have property rights   to   their   share   in   the   common   fund,   nor   can   they   sell their   share.     Cessation   from   membership   would   result   in   the loss of right to participate without receiving a financial benefit from the cessation of the membership.  13 15. The   doctrine   of   mutuality   based   on   common   law   is predicated   on   the   principles   enunciated   in   Styles   vs.   New York   Life   Insurance   Company ,   (1889)   2   T.C.   460,   by   Lord Watson in the House of Lords in the following words: “When   a   number   of   individuals   agree   to contribute   funds   for   a   common   purpose, such   as   the   payment   of   annuities   or   of capital   sums,   to   some   or   all   of   them,   on the   occurrence   of   events   certain   or uncertain,   and   stipulate   that   their contributions,   so   far   as   not   required   for that   purpose,   shall   be   repaid   to   them,   I cannot   conceive   why   they   should   b regarded   as   traders,   or   why   contributions returned   to   them   should   be   regarded   as profits.” 16.  In   Bankipur   Club   Ltd.   (supra),   considering  the   surplus of   receipts   over   expenditure   generated   from   the   facilities extended by a club to its members and its exemption from tax on principles of mutuality, it was observed :­   “ 20……..In   all   these   cases,   the   appellate   tribunal as   also   the   High   Court   have   found   that   the amounts   received   by   the   clubs   were   for   supply   of drinks,   refreshments   or   other   goods   as   also   the letting   out   of   building   for   rent   or   the   amounts received   by   way   of   admission   fees,   periodical 14 subscription   etc.   from   the   members   of   the   clubs were   only   for/towards   charges   for   the   privileges, conveniences   and   amenities   provided   to   the members,   which   they   were   entitled   to   as   per   the rules and regulations of the respective clubs. It has also   been   found   that   different   clubs   realised various sums on the above counts only to afford to their   members   the   usual   privileges,   advantages, conveniences and  accommodation.  In other  words, the   services   offered   on   the   above   counts   were   not done   with   any   profit   motive   and   were   not   tainted with  commerciality.  The  facilities  were  offered  only as   a   matter   of   convenience   for   the   use   of   the members   (and   their   friends,   if   any,   availing   of   the facilities occasionally). 21.   In   the   light   of   the   above   findings,   it necessarily follows that the receipts for the various facilities   extended   by   the   clubs   to   their   members, as   stated   hereinabove   as   part   of   the   usual privileges,   advantages   and   conveniences,   attached to the membership of the club, cannot be said to be “a   trading   activity”.   The   surplus   —   excess   of receipts over the expenditure  as a result of mutual arrangement, cannot be said to be “income” for the purpose of the Act.”   17.  In   Bangalore Club   (supra),   after referring to   Styles,   the doctrine of mutuality was explained further as follows :­ “8………..The   principle   relates   to   the   notion   that   a person   cannot   make   a   profit   from   himself.   An amount   received   from   oneself   is   not   regarded   as income and is therefore not subject to tax; only the income   which   comes   within   the   definition   of Section   2(24)   of   the   Act   is   subject   to   tax   [income from business involving the doctrine of mutuality is 15 denied   exemption   only   in   special   cases   covered under   clause   ( vii )   of   Section   2(24)   of   the   Act].   The concept of mutuality  has been extended to defined groups of people who contribute to a common fund, controlled by the group, for a common benefit. Any amount   surplus   to   that   needed   to   pursue   the common   purpose   is   said   to   be   simply   an   increase of   the   common   fund   and   as   such   neither considered   income   nor   taxable……..   A   common feature   of   mutual   organisations   in   general   and   of licensed   clubs   in   particular,   is   that   participants usually   do   not   have   property   rights   to   their   share in the common fund, nor can they sell their share. And   when   they   cease   to   be   members,   they   lose their   right   to   participate   without   receiving   a financial   benefit   from   the   surrender   of   their membership……” 18.  In   The   Commissioner   of   Income   Tax   vs.   Common Effluent   Treatment   Plant,   (Thane   Belapur)   Association, (2010)   328   ITR   362   (Bom),   the   assessee,   an   incorporated association   under   Section   25   of   the   Companies   Act,   1956 comprising   of   industries   operating   in   the   Thane­Belapur region,   was   set   up   with   a   view   to   provide   a   centralised treatment facility for industrial effluents in view of the inability of each industrial unit to set up a separate effluent treatment facility.   Chandrachud,   J.   (as   he   then   was),   speaking   for   the 16 Division   Bench,   applying   the   principles   of   mutuality   to   the surplus so generated not being exigible to tax, held :­ “10.   ….The   income   of   the   assessee   is   contributed by   its   members.   The   assessee   has   been   formed specifically   with   the   object   of   providing   a   common effluent   facility   to   its   members.   The   income   is   not generated out of dealings with any third party. The entire contribution originates in its members and is expended   only   in   furtherance   of   the   object   of   the Association   for   the   benefit   of   the   members.   On these   facts,   both   the   Commissioner   (Appeals)   and the   Tribunal   were   justified   in   coming   to   the conclusion   that   the   surplus   so   generated   falls within the purview of the doctrine of mutuality and was not exigible to tax….”     19.  The proceedings in the present appeals relate to different assessment   years   based   on   information   gathered   by   the Assessing   Officer   pursuant   to   notice   under   Section   133(6)   of the   Income   Tax   Act.     Transfer   charges   are   payable   by   the outgoing member.   If for convenience, part of it is paid by the transferee,   it   would   not   partake   the   nature   of   profit   or commerciality   as   the   amount   is   appropriated   only   after   the transferee   is   inducted   as   a   member.     In   the   event   of   non­ admission,   the   amount   is   returned.   The   moment   the 17 transferee is inducted as a member the principles of mutuality apply.   Likewise,   non­occupancy   charges   are   levied   by   the society   and   is   payable   by   a   member   who   does   not   himself occupy   the   premises   but   lets   it   out   to   a   third   person.     The charges   are   again   utilised   only   for   the   common   benefit   of facilities   and   amenities   to   the   members.     Contribution   to   the common   amenity   fund   taken   from   a   member   disposing property   is   similarly   utilised   for   meeting   sudden   and   regular heavy   repairs   to   ensure   continuous   and   proper   hazard   free maintenance   of   the   properties   of   the   society   which   ultimately enures   to   the   enjoyment,   benefit   and   safety   of   the   members. These charges are levied on the basis of resolutions passed by the society and in consonance with its bye­laws.   The receipts in   the   present   cases   have   indisputably   been   used   for   mutual benefit   towards   maintenance   of   the   premises,   repairs, infrastructure and provision of common amenities.  20.  Any   difference   in   the   contributions   payable   by   old members   and   fresh   inductees   cannot   fall   foul   of   the   law   as sufficient   classification   exists.     Membership   forming   a   class, 18 the   identity   of   the   individual   member   not   being   relevant, induction into membership automatically attracts the doctrine of   mutuality.     If   a   Society   has   surplus   FSI   available,   it   is entitled   to   utilise   the   same   by   making   fresh   construction   in accordance   with   law.     Naturally   such   additional   construction would   entail   extra   charges   towards   maintenance, infrastructure, common facilities and amenities.   If the society first   inducts   new   members   who   are   required   to   contribute   to the   common   fund   for   availing   common   facilities,   and   then grants   only   occupancy   rights   to   them   by   draw   of   lots,   the ownership   remaining   with   the   society,   the   receipts   cannot   be bifurcated into two segments of receipt and costs, so as to hold the former to be outside the purview of mutuality classifying it as income of the society with commerciality.  21. Section   79A   of   the   Maharashtra   Co­operative   Societies Act reads as follows: “ 79A. Government's power to give directions in the public   interest,   etc.­   (1)   If   the   State   Government,   on receipt   of   a   report   from   the   Registrar   or   otherwise,   is satisfied that in the public interest or for the purposes 19 of   securing   proper   implementation   of   co­operative production   and   other   development   programmes approved   or   undertaken   by   Government,   or   to   secure the proper management of the business of the Society generally,   or   for   preventing   the   affairs   of   the   Society being   conducted   in   a   manner   detrimental   to   the interests   of   the   members   or   of   the   depositors   or   the creditors thereof, it is necessary to issue directions to any   class   of   societies   generally   or   to   any   Society   or societies   in   particular,   the   State   Government   may issue   directions   to   them   from   time   to   time,   and   all societies   or   the   societies   concerned,   as   the   case   may be, shall be bound to comply with such directions. (2)   The   State   Government   may   modify   or   cancel   any directions   issued   under   subsection   (1),   and   in modifying   or   cancelling   such   directions   may   impose such conditions as it may deem fit. (3)   Where   the   Registrar   is   satisfied   that   any   person was   responsible   for   complying   with   any   directions   or modified   directions   issued   to   a   Society   under   sub­ sections (1) and (2) and he has failed without any good reason   or   justification,   to   comply   with   the   directions, the Registrar may by order­­ (a) if the person is a member of the committee of the   Society,   remove   the   member   from   the Committee   and   appoint   any   other   person   as member   of   the   committee   for   the   remainder   of the   term   of   his   office   and   declare   him   to   be disqualified to be such member for a period of six years from the date of the order: (b)   if   the   person   is   an   employee   of   the   Society, direct the committee to remove such person from employment   of   the   Society   forthwith,   and   if   any member   or   members   of   the   committee,   without 20 any   good   reason   or   justification,   fail   to   comply with   this   order,   remove   the   members,   appoint other   persons   as   members   and   declare   them disqualified as provided in clause (a) above: Provided   that,   before   making   any   order   under   this sub­section,   the   Registrar   shall   give   a   reasonable opportunity   of   being   heard   to   the   person   or   persons concerned and consult the federal Society is affiliated. Any   order   made   by   the   Registrar   under   this   section shall be final.” 22. In   The   New   India   Co­operative   Housing   Society (supra) ,   the challenge by the aggrieved was to the transfer fee levied   by   the   society   in   excess   of   that   specified   in   the notification,   which   is   a   completely   different   cause   of   action having   no   relevance   to   the   present   controversy.     It   is   not   the case of the Revenue that such receipts have not been utilised for   the   common   benefit   of   those   who   have   contributed   to   the funds.  23.   The notification dated 09.08.2001 in the relevant extract reads as follows:­ 21 ORDER In the exercise of the powers conferred upon the State Government under Section 79­A of the Maharashtra Co­operative Societies Act, 1960 following orders are hereby issued in the larger interests of the people in the State. 1)  Xxxxxx 2) The   rate   of   premium   to   be   charged   for   the   transfer Flat/Premises as well as the rights and share in the share   capital/property   of   the   Co­operative   Housing Society by a member in favour of another, should be determined at the General Meeting of the Society. 24. We   do   not   find   any   reason   to   take   a   view   different   from that   taken   by   the   High   Court,   that   the   notification   dated 09.08.2001 is applicable only to co­operative housing societies and has no application to a premises society which consists of non­residential premises.  25.  Kumbakonam   (supra),   is   distinguishable   on   its   own facts.     The   doctrine   of   mutuality   was   held   to   be   inapplicable because  the   members  who   had  not   contributed  to   surplus  as customers were nevertheless entitled to participate and receive part of the surplus.    In   Chelmsford Club   (supra),   it was held 22 that   there   was   no   profit   motive   or   sharing   of   profits   as   such amongst the members.  The surplus, if any, from the business was   not   shared   by   the   members   but   was   used   for   providing better   facilities   to   the   members.     There   was   a   clear   identity between the contributors and the participators to the fund and the recipients thereof. 26.  In   the   result,   all   appeals   preferred   by   the   Revenue   are dismissed.   Civil   Appeal   No.1180   of   2015   preferred   by   the assessee society is allowed. …………………………...J. (Rohinton Fali Nariman) ……………………………..J. (Navin Sinha) New Delhi, March 12, 2018. 23 ITEM NO.1501 COURT NO.10 SECTION IX S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS C.A.No.2706/2018 @ SLP(C)No.30194/2010 (Arising out of impugned final judgment and order dated 11- 01-2010 in ITA No.680/2009 passed by the High Court Of Judicature At Bombay) INCOME TAX OFFICER,MUMBAI Petitioner(s) VERSUS VENKATESH PREMISES COOP.STY.LTD. Respondent(s) WITH C.A.No.3271/2012 (IX) C.A.No.3272/2012 (IX) C.A.No.3827/2012 (IX) C.A.No.1180/2015 (III) C.A.No.2997/2017 (III) C.A.No.8741/2017 (III) C.A.No.2708/2018 in SLP(C)No.32061/2010 (IX) C.A.No.2707/2018 in SLP(C)No.30195/2010 (IX) C.A.No.2713/2018 in SLP(C)No.32914/2010 (IX) C.A.No.2710/2018 in SLP(C)No.32913/2010 (IX) C.A.No.2709/2018 in SLP(C)No.32063/2010 (IX) C.A.No.2711/2018 in SLP(C)No.32065/2010 (IX) C.A.No.2712/2018 in SLP(C)No.34087/2010 (IX) C.A.No.2716/2018 in SLP(C)No.35120/2010 (IX) 24 C.A.No.2714/2018 in SLP(C)No.32918/2010 (IX) C.A.No.2715/2018 in SLP(C)No.34061/2010 (IX) C.A.No.2717/2018 in SLP(C)No.128/2011 (IX) C.A.No.2728/2018 in SLP(C)No.16967/2011 (IX) C.A.No.2718/2018 in SLP(C)No.133/2011 (IX) C.A.No.2720/2018 in SLP(C)No.367/2011 (IX) C.A.No.2721/2018 in SLP(C)No.370/2011 (IX) C.A.No.2719/2018 in SLP(C)No.378/2011 (IX) C.A.No.2722/2018 in SLP(C)No.2623/2011 (IX) C.A.No.2724/2018 in SLP(C)No.2745/2011 (IX) C.A.No.2726/2018 in SLP(C)No.4096/2011 (IX) C.A.No.2723/2018 in SLP(C)No.2744/2011 (IX) C.A.No.2725/2018 in SLP(C)No.3283/2011 (IX) C.A.No.2727/2018 in SLP(C)No.5382/2011 (IX) C.A.No.2729/2018 in SLP(C)No.17102/2011 (IX) C.A.No.2730/2018 in SLP(C)No.17667/2011 (IX) C.A.No.2731/2018 in SLP(C)No.19992/2012 (IX) C.A.No.2732/2018 in SLP(C)No.19993/2012 (IX) C.A.No.2733/2018 in SLP(C)No.17428/2015 (IX) C.A.No.2734/2018 in SLP(C)No.29755/2013 (IX) C.A.No.2735/2018 in SLP(C)No.17430/2015 (IX) C.A.No.2736/2018 in SLP(C)No.17431/2015 (IX) C.A.No.2740/2018 in SLP(C)No.37702/2016 (IX) C.A.No.2739/2018 in SLP(C)No.36157/2016 (IX) 25 C.A.No.2737/2018 in SLP(C)No.34865/2016 (IX) C.A.No.2738/2018 in SLP(C)No.34866/2016 (IX) C.A.No.2741/2018 in SLP(C)No.4122/2017 (IX) C.A.No.2742/2018 in SLP(C)No.4126/2017 (IX) C.A.No.2743/2018 in SLP(C)No.12234/2017 (IX) C.A.Nos.2766-2767/2018 @ SLP(C)Nos.6582-6583/2018 @ Diary No(s). 14603/2017 (IX) C.A.No.2747/2018 in SLP(C)No.19340/2017 (IX) C.A.No.2744/2018 in SLP(C)No.18935/2017 (IX) C.A.Nos.2768-2769/2018 @ SLP(C)Nos.6585-6586/2018 @ Diary No(s). 14672/2017 (IX) C.A.Nos.2771-2772/2018 @ SLP(C)Nos.6587-6588/2018 @ Diary No(s). 14675/2017 (IX) C.A.No.2770/2018 @ SLP(C)No.6589/2018 @ Diary No(s).14674/2017 (IX) C.A.No.2746/2018 in SLP(C)No.18944/2017 (IX) C.A.No.2745/2018 in SLP(C)No.18943/2017 (IX) C.A.No.2765/2018 @ SLP(C)No.6550/2018 @ Diary No(s).18867/2017 (IX) Date : 12-03-2018 These petitions were called on for pronouncement of judgment today. For Petitioner(s) Mrs. Anil Katiyar,AOR Mr. B.V. Balaram Das,AOR Mr. Shiv Kumar Suri,Aor Mr. Shikhil Suri,Adv. Mr. Saswat Pattnaik,Adv. 26 For Respondent(s) Mr. Salil Kapoor,Adv. Mr. Sanat Kapoor,Adv. Mr. Sumit Lalchandani,Adv. Ms. Soumya Singh,Adv. Ms. Ananya Kapoor,Adv. Mr. Kislaya Parashar,Adv. Mr. Rajeev Sharma,Adv. Mr. Deepak Goel,Adv. Mr. Firasat Ali Siddiqi,Adv. Mr. A.D. Kumar,Adv. Mr. Anil Kr. Chopra,Adv. Mr. Siddhartha Chowdhury,AOR Ms. Nandini Gore,Adv. Ms. Sonia Nigam,Adv. Mr. Mandeep Kalra,Adv. Ms. Manik Karanjawala,Adv. For M/s. Karanjawala & Co.,AOR Mr. Pratap Venugopal,Adv. Ms. Surekha Raman,Adv. Ms. Niharika,Adv. Ms. Kanika Kalaiyarasan,Adv. For M/s. K.J. John & Co.,AOR Mr. S. C. Birla,AOR Mr. Kamal Mohan Gupta,AOR Mrs. Shally Bhasin,AOR Mr. Nikhil Nayyar,AOR Mr. Rashmikumar Manilal Vithlani,AOR Mr. V.N. Raghupathy,AOR Mrs. V.D. Khanna,AOR Mr. Senthil Jagadeesan,AOR Hon'ble Mr. Justice Navin Sinha pronounced the Reportable judgment of the Bench comprising Hon'ble Mr. Justice Rohinton Fali Nariman and His Lordship. Delay condoned. Leave granted in all the SLPs. 27 The appeals preferred by the Revenue are dismissed and Civil Appeal No.1180/2015 preferred by the assessee-society is allowed in terms of the signed Reportable judgment. Pending application, if any, stands disposed of. (Sarita Purohit) (Suman Jain) Court Master Branch Officer (Signed Reportable judgment is placed on the file) 28