(i) The Order of the Supreme Court in Commissioner of Income Tax vs. M/s Cawnpore Club Ltd., Kanpur (2004) 140 Taxman 378 (SC) cannot be treated as a precedent within the meaning of Article 141 of the Constitution of India as the said order does not declare any law and the appeals filed by the revenue as against Cawnpore Club were disposed of without going into the larger question as to whether Cawnpore Club could be taxed on the interest income earned on fixed deposits made by it in the banks, or whether the principle of mutuality would apply to the said income.

(ii) The judgment of the Supreme Court in Bangalore Club vs. Commissioner of Income Tax, (2013) 5 SCC 509 does not call for reconsideration even when viewed in light of the previous Order of Cawnpore Club. Consequently, the principle of mutuality would not apply to interest income earned on fixed deposits made by the appellant Clubs in the banks irrespective whether the banks are corporate members of the club or not.

(iii) In view of the above, the judgment in Bangalore Club is not per incuriam although, the earlier Order passed by a Coordinate Bench of this Court in the case of Cawnpore Club is not noticed in Bangalore Club.

(iv) The judgment of the Division Bench of the Karnataka High Court in Canara Bank Golden Jubilee Staff Welfare Fund vs. Deputy Commissioner of Income Tax, (2009) 308 ITR 202 (Kar) must be restricted to apply to the facts of the said case alone and cannot be a precedent for subsequent cases. This is because the judgment of another Division Bench of the said High Court in the case of Bangalore Club was not brought to the notice of the Division Bench, which rendered the judgment in the case of Canara Bank. Further, it is the judgment of the Division Bench of the said High Court in Bangalore Club that has been sustained by a Coordinate Bench of the Supreme Court by a detailed reasoning.

(v) Thus, the interest income earned on fixed deposits made in the banks by the Clubs has to be treated like any other income from other sources within the meaning of Section 2(24) of
Income Tax Act, 1961.

(vi) Conversely, if any income is earned by the Clubs through its assets and resources, from persons who are not members of the Clubs, such income would also not be covered under the principle of mutuality and would be liable to be taxed under the provisions of the Income Tax Act.