TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the amendment of bye-law 50 of the co-operative society could operate retrospectively in the absence of any express or implied authority under the Act and rules. (ii) Whether the amounts deducted from members' cane payments and credited to the reserve fund were revenue receipts liable to tax.
Issue (i): Whether the amendment of bye-law 50 of the co-operative society could operate retrospectively in the absence of any express or implied authority under the Act and rules.
Analysis: The power to frame and amend bye-laws was derived from the statutory scheme under the Co-operative Societies Act, 1912 and the United Provinces Co-operative Societies Rules, 1936. Rule 11 permitted alteration, rescission, or addition of bye-laws, but did not expressly or by necessary implication authorise retrospective operation. In the absence of such power, a subordinate body could not confer retrospective effect on an amendment affecting past accounting periods.
Conclusion: The retrospective amendment was invalid and could not govern the relevant accounting year.
Issue (ii): Whether the amounts deducted from members' cane payments and credited to the reserve fund were revenue receipts liable to tax.
Analysis: Under the unamended bye-law, the deductions were made in the course of trading operations and were first available for meeting losses, repaying the loan, and redeeming Government share before any possible conversion into share capital. The label of 'deposit' or the description of the account was not ative; the true nature of the receipt depended on its character in the hands of the assessee. On that basis, the receipts were part of the trading operations and had the character of income.
Conclusion: The amounts were revenue receipts and were assessable to tax.
Final Conclusion: The questions referred were answered in favour of the Revenue, and the appeals were allowed.
Ratio Decidendi: A subordinate body cannot give retrospective effect to a bye-law or amendment unless the power to do so is expressly or by necessary implication conferred by the governing statute or rules, and amounts received in the course of trading operations retain their character as revenue receipts notwithstanding the nomenclature used for them.
TaxTMI 
