Rajasekhara Murthy J.
1. The following question arising out of the common order of the Tribunal for the assessment years 1968-69 and 1969-70 has been referred to this court :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee was not an assessable entity and the amounts received by the Fund is not income assessable under the Income-tax Act, 1961 ?'
2. The assessee is the 'Bangalore Turb Club Benevolent Fund' which has been constituted by the Banglore Turb Club Benevolent Fund [BTC]. The Fund was administered by the Stewards of the BTC. It was constituted under the BTC Rules. The BTC collected licence fees and fines from the trainers, jockeys and apprentices and transferred those sums to the account of the Fund for the relief of the trainers, jockeys, apprentices, riding boys and their dependents. Rule 182 (of the BTC Rules),under which the Fund was constituted, reads as follows :
'182. All fines imposed under these Rules shall, on realisation, be remitted to the Secretary of the Club.
(i) A fund shall be kept under the name of the Benevolent Fund for the relief of the trainers, jockeys, apprentices, riding boys and their dependents.
The fund shall be under the charge of the Stewards of the Club and shall be administered by them in their discretion.
There shall be credited to such fund : -
(a) all fees received by the Club on account of licences granted to trainers, jockeys and apprentices;
(b) unless otherwise provided or directed by the Stewards of the Club, all fines imposed under these rules and received by the Secretary of the Club;
(c) such other sums as the Stewards of the Club may from time to time determine.'
3. The assessee was taxed by the ITO for the assessment years 1968-69 and 1969-70 treating the contributions made by the BTC as the income of the Fund.
4. On behalf of the assessee it was contended that the amount transferred by the BTC was not its income and hence not liable to be taxed under the I.T. Act, 1961. The ITO did not accept this claim and held that the entire receipts transferred by the BTC in its favour constituted its income and brought it to tax in the hands of the Fund treating it as an association of persons (AOP) for purpose of assessment.
5. In the appeal preferred by the assessee, the AAC confirmed the assessment order. But, on further appeal, the Tribunal held that the assessee was not a taxable entity as an AOP. The Tribunal also rejected the contention of the Department that the Fund could be assessed in the status of a body of individuals (BOI). In view of the finding that the assesses fund was not an assessable entity, the Tribunal did not give a clear-cut finding as to whether the income in the hands of the assessee was liable to tax.
6. Being aggrieved by the order of the Tribunal, the Department field an application under s. 256(1) of the I.T. Act for referring the question of law mentioned above for the opinion of this court. Hence, these references.
7. There are two aspects in the question. They are :
(i) Whether the BTC Benevolent Fund can be an assessable entity under the I.T. Act, and
(ii) Whether the sums received by the Found is its income assessable to tax under the I.T. Act.
8. Sri K. Srinivasan, learned senior standing counsel for the Department, contended that the Fund is an assessable entity within the meaning of the inclusive definition of 'person' as defined in S. 2(31) of the I.T. Act, and that its receipts from the BTC constitute its income assessable to tax under the I.T. Act. His further submission is that if the assessment made in the status of an AOP was not valid, the Tribunal should have at least upheld the assessment in the status of a BOI. Mr. K. R. Prasad for the assessee contended to the contrary. According to him, the Stewards, who were entrusted with the sums, did not have any purpose except to distribute it to the deserving persons mentioned under r. 182. They did not join together or come together to earn income, nor they held any asset which produced income and, therefore, the assessee cannot even be termed as BOI.
9. Let us now examine the relevant provisions of the I.T. Act.
10. Under s. 4, the charging section, the total income of every person is exigible to charge in accordance with the provisions of the I.T. Act.
Section 2(31) defines 'person' to include :
(i) as individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling within any of the preceding sub-clauses.
11. It is significant to note that the entity, 'body of individuals' was added in the inclusive definition of 'person' in the 1961 Act and it was not an assessable entity under the provisions of the 1922 Act which contained only an AOP. What then was the purpose of adding BOI in the 1961 Act It was certainly not to equate it with the AOP.
12. The leading case on AOP is that of the Supreme Court in CIT v. Indira Balkrishna  39 ITR 546. While explaining the meaning of AOP found in s. 3 of the 1922 Act, the Supreme Court observed that an AOP means an association in which two or more persons join in a common purpose or common action, the object of which is to produce income, profits and gains.
13. So far as the concept of BOI is concerned, the following decisions have taken the view that there must be a common object among the persons constituting BOI to produce income : Deccan Wine and General Stores v. CIT : 106ITR111(AP) , CIT v. Harivadan Tribhovandas : 106ITR494(Guj) and CIT v. Smt. Vimla Lal : 143ITR16(All) .
14. In CIT v. Deghamwala Estates : 121ITR684(Mad) , the Madras High Court observed (p. 691) :
'Thus, the above meaning of the word 'body' would require an association for some common purpose or for a common cause or there must be unity under some common tie or occupation. A mere collection of individuals without a common tie or a common aim cannot be taken to be a body of individuals falling within s. 2(31).
It would of course be tautologous if all the requisites of an association of persons were required to constitute a body of persons. In such a case, both would be the same entity. In such a case the Legislature need not have provided for a separate category of body of persons when association of persons could have fulfilled the purpose. The two entities cannot be identical in conception. But it is not possible to state precisely what combination would constitute an association of persons and what a body of individuals. There may be some overlapping and the incorporation of this category into the definition can be attributed to an anxiety not to leave out any category from assessment.'
15. It was further observed (p. 692) :
'The purpose or the aim should, in the context of the I.T. Act, be to produce income or hold income-producing assets.'
16. Mr. Prasad for the assessee laid great emphasis on the last statement of law in the above decision of the Madras High Court in support of his contention that even the members constituting a BOI should come together to produce income or they must at least hold income-producing assets.
17. We gave our anxious consideration to the contention urged by Mr. Prasad. We are unable to agree with the contention. The BOI was introduced under s. 2(31) with a definite purpose. The purpose appears to be that the AOP could not cover all the like taxable entities. It was intended to cover a distinct body different from an AOP. There may be some common attributes as between the two bodies. But to say that both must have the common purpose to produce income, profits or gains would defeat the purpose for which it was included in the 1961 Act. In our opinion, if a body of persons is entrusted with income with power to administer it or charged with a duty to receive income with a power of disposal, then such body may be regarded as a BOI and it cannot escape the taxation if its income is otherwise taxable.
18. It will be seen from the relevant rules of the BTC that all the fines and the license fees collected are, on realisation, remitted to the Secretary of the BTC. He in turn credits them to the account of the Fund. The said rule also provides that the Fund shall be under the charge of the stewards, and shall be administered by them in their discretion. The administration of the Fund has been thus entrusted to the stewards of the BTC, for the purpose of giving relief to the trainers, jockeys, apprentices, riding boys and their dependents.
19. It is not in dispute that the sums collected by the BTC are not treated as part of the total income of the BTC in its assessment. The BTC is, therefore, not the owner of the said income since there is an overriding title created in favour of the Fund under the Rules. These sums are thus in the nature of voluntary contributions received by the assessee and earmarked for being utilised for the benefit of the specified persons. The stewards administer the Fund in their absolute discretion. They hold property, receive income and administer the Fund as an independent entity. These attributes, in our opinion, are sufficient to subject them to tax as a body of individuals.
20. Our view also finds support from the provisions of ss. 11 and 12 of the I.T. Act under which any person/persons receiving voluntary contributions can be subjected to tax as provided therein. Section 12 creates a fiction and deems voluntary contributions as income derived from property held under trust for the purpose of ss. 11 and 13.
21. The second aspect of the question, namely, whether the amounts received by the Fund from the BTC is not its income assessable to tax under the I.T. Act need not be gone into in this reference. Counsel on both the sides also agreed that the Tribunal has to consider this question afresh.
22. In the result, we hold that the assessee is an assessable entity under the I.T. Act and answer the first part of question in the negative and against the assessee. The Tribunal shall now dispose of the appeal in accordance with law.