Continuity of tax exemption for a reconstituted Bar Council was upheld despite the absence of a fresh specific order.

The Chhattisgarh State Bar Council's entitlement to exemption under section 10(23A) of the Income-tax Act, 1961 continued after State reorganisation because it remained the same statutory body discharging the functions assigned under the Advocates Act, 1961. A fresh exemption application in the new Council's name was treated as a technical consequence of reorganisation, not a ground to deny the substantive tax benefit where the earlier exemption had already been granted to the Bar Council of the undivided State. The statutory scheme and institutional continuity supported extension of the exemption, and relief for the prior years was upheld.

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Issues: Whether the State Bar Council of Chhattisgarh was entitled to exemption under section 10(23A) of the Income-tax Act, 1961 for the prior years after the creation of the new State, despite the absence of a fresh specific exemption order in its name.

Analysis: The exemption had earlier been granted to the Bar Council of the undivided State. After the reorganization of the State and the creation of a separate Bar Council for Chhattisgarh, the Council continued to discharge the same statutory functions under the Advocates Act, 1961. The Court treated the fresh application for exemption as a technical and procedural requirement flowing from the reorganization, and not as a reason to deny the substantive benefit where the legal entitlement otherwise continued. The Court also noted that the statutory scheme and the nature of the institution supported continuation of the exemption.

Conclusion: The State Bar Council of Chhattisgarh was entitled to exemption under section 10(23A) of the Income-tax Act, 1961, and the challenge to the grant of relief for the prior years was rejected.

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