(On appeal from the judgment dated 27-1-1992 of the High Court of Sindh, Karachi, passed in I.T.R. No.71 of 1987).

(a) Income Tax Ordinance (XXXI of 1979)---

----S. 12(3)---Income from house property---Taxability---Lessee holding lease of a building for a fixed period renewable periodically and enjoying all rights of ownership of that building whether owner of the property --- Assessee (appellant) had taken building in question on lease for a speed period on condition that after demolition of the old structure, it would raise new construction which was complied with ---Assessee received a substantial amount from the tenants of the building which was non-refundable and non adjustable---Assessing Officer invoking sub-clause (13) of S.12 of the Income Tax Ordinance, 1979, subjected the amount so received by the assessee to tax ---Assessee after unsuccessfully challenging taxing of such amount before Appellate Assistant Commissioner filed appeal before the Income-tax Appellate Tribunal on the ground that the assessee was not the owner of the building which was accepted---Reference made to High Court by the Department on the question of ownership of building was answered in its favour--Assessee assailing such opinion of High Court in appeal before Supreme Court on the plea that it being not the owner of the property in question, the amount received by it could not be taxed under S.12(13) of the Ordinance---Supreme Court, accepted the appeal holding that assessee (appellant) was not owner of the building in question and could not be treated as `being the owner of the building' in terms of subsection (13) of S.12 of the Ordinance, 1979 by virtue of the fact that they had raised the building.

Bechu Bai F.E. Dinshaw, Karachi v. Commissioner of Income-tax 1967 P T D 170; S.O. Mercantile Corporation P. Ltd. v. Commissioner of Income-tax, Calcutta (1972) 83 ITR 700; Commissioner of Income-tax, Madras v. The Madras Cricket Club (1934)11 ITR 209; Bellygunge Bank Ltd., Calcutta v. Commissioner of Income-tax Bengal (1946) 14 ITR 409; The Commercial Properties Ltd. v. The Commissioner of Income-tax, Bengal (1928) 3 ITR 23; Additional Commissioner of Income-tax, Bihar v. Lawlys Enterprises (P.) Ltd (1975) 100 ITR 369; Commissioner of Income-tax, Lucknow v. Chandra Agro P. Ltd. (1979) 117 ITR 251 sad Commissioner of. Income-tax, Poona v. Alpana Tallies (1983)139 ITR 1055 ref.

(b) Income-tax Ordinance (XXXI oI1979)---

----S. 12(13)---`Lessee' when to be treated as `owner'---Lessee in whom ownership of the structure/building vests in terms of the lease or otherwise may be treated as a owner in terms of subsection (13) of S.12 of the Ordinance.

(c) Interpretation of statutes---

---- Construction of fiscal and taxing statute and other provisions of law imposing pecuniary burden---Principles stated.

The cardinal principles of interpretation of a fiscal statute seem to be that all charges upon the subject are to be imposed by clear and unambiguous words. There is no room for any intendment nor there is any equity or presumption as to a tax. A fiscal provision of a. statute is to be construed liberally in favour of the tax-payer and in case of any substantial doubt the same is to be resolved in favour of the citizen.

Sirajul Haq Memon, Advocate Supreme Court instructed by Naraindas C. Motiani, Advocate-on-Record for Appellant.

Shaikh Haider, Advocate Supreme Court instructed by S.M. Abbas, Advocate-on-Record for Respondent.

Date of hearing: 7th October, 1992.

JUDGMENT

AJMAL M1AN, J.---This is an appeal with the leave of this Court against the judgment dated 27-1-1992 passed by a Division Bench of the High Court of Sindh in I.T.R. No.71 of 1987 filed by the respondent for soliciting the opinion of the High Court on the following question:--

"Whether on the facts and in the circumstances of the case, the learned Tribunal was justified in holding that the assessee was not owner of building when the assessee was holding lease which was renewable periodically and was enjoying all rights of ownership of the said building."

The above question has been answered by the Division Bench in the negative.

2. The brief facts are that the appellant took on lease property bearing No.B.R.F./34, situated on Newnaham Road, Karachi, from the Auqaf Department for a period of eight years on the condition that after demolition of the old structure, it would raise new construction, which was done. It seems that the appellant filed income-tax return for the assessment year 1980-81 showing a loss of Rs.12,735 but the Income-tax Officer, upon scrutiny of the accounts found that the appellant had received a non-refundable and non?adjustable payment to the tune of Rs3,02,000 from the tenants of the newly? constructed building. He accordingly invoked subsection (13) of section 12 of the Income-tax Ordinance, 1979, hereinafter referred to as the Ordinance and subjected the aforesaid amount to tax. The order of the Income Tax Officer was maintained by the learned Appellate Commissioner in an appeal filed by the appellant. However, upon further appeal before the learned Income-tax Appellate Tribunal, the contention of the appellant that the above amount could not be subjected to tax was accepted. After that, the above reference was filed by the respondent, which was answered in the above terms. Thereupon, the appellant filed a petition for leave to appeal, which was granted to consider the question, whether the learned Judges of the Division Bench were justified in answering the above question in the negative.

3. In support of the above appeal, Mr. Sirajul Haq Memon, learned S.C. appearing for the appellant, has vehemently urged that in terms of the se agreement, the Auqaf Department was the owner of the building and, therefore, the respondent could not have pressed into service subsection (13) section 12 of the Ordinance.

On the other hand, Mr. Shaikh Haider, learned A.S.C. appearing for e respondent, has contended that the use of the word `being' before the words `the owner of a building' is significant and that in order to invoke subsection (13) of section 12, it is not necessary that an assessee should be the veer of the building strictly.

4. Before proceeding with the above contentions, it may be advantageous reproduce subsections (13) to (17) of section 12 of the Ordinance, which ere incorporated by Finance Ordinance, 1980 and were modified by Finance Ordinance, 1981, which read as follows: --

"(13) Where an assessee, being the owner of a building, receives from any person to whom such building or any part thereof is let out on rent any amount which is not adjustable against the rent payable by such person, such amount shall be deemed to be the income of the assessee and chargeable to tax under the head `Income from the house property' in the income year in which such amount is received and the nine income years next following the said income year in equal proportion; and the amount so allocated to each income year shall be deemed to be the rent received in respect of such building or a part thereof.

(14) Where the amount mentioned in subsection (13) is refunded by the assessee to the tenant on termination of the tenancy before expiry of ten years as aforementioned, no portion of such amount shall be allocated to the income year in which it is refunded or any income year thereafter except in a case mentioned in subsection (15).

(15) Where, on the termination of tenancy of one person and refund to that person of the amount mentioned in subsection (13), the assessee lets out such building or such part thereof, as the case may be, to another person and receives from such other person any amount (hereinafter called the `succeeding amount') which is not adjustable against the rent payable by such other person, the succeeding amount as reduced by such portion of the earlier amount as was charged to tax, shall be deemed to be the income of the assessee chargeable under the head `Income from house property' and charged to tax as laid down in subsection (13).

(16) Where an assessee receive& any amount in consideration for vacating the possession of building or a part thereof of which he is a tenant, the said amount as reduced by the amount, if any, paid by the assessee for acquiring possession of such building or part thereof shall be deemed to be the income of the assessee and chargeable to tax under the head `Income from other sources' in the income year in which it is received and nine income years next following the said income year in equal proportion.

(17) The provisions of subsections (13) to (16) shall also apply to an assessee who has received the amount referred to in subsection (13), (15) or (16) in the income year relevant to the assessment year commencing on the first day of July, 1980, or in any earlier income year so, however, that income chargeable to tax in the manner laid down in the said subsections shall be charged to tax only in respect of the income year relevant to the assessment year commencing on the first day of July, 1980, or any assessment year thereafter."

5. A perusal of the above-quoted subsection (13) indicates that where an assessee, being the owner of a building, receives from any person to whom such building or any part thereof is let out on rent, any amount which is not adjustable against rent, the same shall be deemed to be the income of the assessee and shall be chargeable to tax under the head `income from the house property' in the income year in which such amount is received and the nine income years next following the said income year in equal proportion, and the amount so allocated to each income year shall be deemed to be the rent received in respect of such building or part thereof.

Whereas subsection (14) deals with the case in which the amount referred to in subsection (13) is refunded to the tenant before the expiry of the above ten years mentioned in subsection (13) and provides that no portion of the above amount shall be allocated to the income year in which it is refunded or any income year thereafter except in a case mentioned in subsection (15).

It may be noticed that subsection (15) refers to the case where on the termination of the tenancy of one person and refund to that person of the amount mentioned in subsection (13), the assessee let outs such building or such part thereof, as the case may be, to another person and receives from such other person any amount which is not adjustable against the rent, the succeeding amount so received as reduced by such portion of earlier amount as was charged to tax, shall be deemed to be the income of the assessee chargeable under the head `Income from house property' and shall be charged to taxes laid down in subsection (13).

Whereas subsection (16) provides in respect of an assessee who receives any amount in consideration for vacating the possession of a building or part thereof of which he is a tenant, the above amount so received has been made liable to tax in terms of above subsection (16) under the head `Income from other sources'.

It may also be noticed that subsection (17) lays down that subsections (13) to (16) shall also apply to an assessee who has received the amount referred to in subsection (13), (15) or (16) in the income year relevant to the assessment year commencing on the first day of July, 1980, or in an earlier income year but it further provides that the income chargeable to tax in the manner laid down in the aforesaid subsections shall be charged to tax only in respect of the income year relevant to the assessment year commencing on the first day of July, 1980, or any assessment year thereafter.

6. At this juncture, it may be pertinent to reproduce clause 6 of the lease agreement dated 1-11-1974 executed between the Administrator Auqaf, Sindh, and the appellant, and sub-clauses (a) to (d) of clause 3 of the Memorandum and Articles of Association, which read as follows: --

"Clause 6 of the lease agreement.--(6) That on development having taken place according to the proposed plan on the plot the entire structure and building will vest in the party of the 1st part -- the Lessor with full rights of ownership, but then, the party of the 1st part, the Lessor shall be bound to make a lease of the entire building so raised and constructed by the party of the 2nd part -- the lessees for a period of 8 (eight) years from the date of execution of lease in favour of the lessees.

Sub-clauses (al to (d) of clause 3 of the Memorandum and Articles of Association.---(a) To acquire from Department of Auqaf Administration, Government of Sindh leasehold rights on the plot of land No.B.R. 5/54, situated at Newnahan Road under their Development Scheme of the said plot over which presently 9 shops and an Islamic Madarasa in a multifarious pucca and katcha construction are existing.

(b) To acquire land on lease or by purchase and construct multistorey buildings for commercial-cum-residential purposes and to sell or let out shops, flats, godowns, showrooms on price or on tenancy basis.

(c) To dismantle and demolish the existing structure of shops and Madrasa standing on the above plot of land No.B.R.5/54, and to raise new construction in its place in accordance with the plan approved by the concerned authorities like K.M.C. and K.DA.

(d) That the building so constructed, after completion shall be handed over to the Auqaf Department, Government of Sindh and this company will secure leasehold rights of the entire building from the Auqaf Department, Government of Sindh for a period of ten (10) years which lease would be renewable by the mutual agreement on fresh terms and conditions for a further period of 10 years between the Auqaf Department, Government of Sindh and this Company."

7. The thrust of the arguments of Mr. Sirajul Haq Memon, learned A.S.C. for the appellant, was that in terms of above-quoted clause (6) of the lease agreement, the building stood vested in the Auqaf Department which was in consonance with the above-quoted sub-clause (d) of clause 3 of the Memorandum and Articles of Association and, therefore, the appellant could not have been treated as the owner of building for the purpose of subsection (13) of section 12 of the Ordinance. He has placed reliance on the case of Bechu Bai F.E. Dinshaw, Karachi v. Commissioner of Income-tax 1967 P T D 170 and the case S.G. Mercantile Corporation P. Ltd. v. Commissioner of Income-tax, Calcutta (1972) 83 ITR1700.

In the above first case, the facts were that the executors of the estate of late Mr. F.E. Dinshaw entered into an agreement on 14-12-1946 with Mrs. S.G.M. Eduljee for the sale of a plot of land with building thereon for a sum of Rs.7,50,000. At the time of execution of the agreement, a sum of Rs.75,000 was paid as earnest money and the balance of the purchase price was agreed to be paid within four months on the sellers giving one or more conveyances at the instance of purchaser or her nominees. It appears that no sale-deed was executed but in 1950 on the payment of the balance of the sale money, the executors by letter dated 7-2-1951, allowed the purchaser to take possession of the property with permission to collect rent from various tenants from 1-2-1951. Subsequently, the executors sold a portion of the plot of land at the instance of the purchaser to Messrs Electronics and Films Equipment Ltd. for a consideration of Rs.1,30,000 which was received by the executors under a registered sale-deed dated 26-8-1950. The Income-tax Officer in making the assessment for the charge year 1953-54 included in the total income of the executors the bona fide annual value of the property on the ground that as the property in question was not properly conveyed to the purchaser, the executors continued to be its real owners. In the subsequent two years, namely, 1954-55 and 1955-56, the Income-tax Officer treated the income from the said property to be the income of the two beneficiaries of late F.E. Dinshaw. The assessee brought the matter before the erstwhile High Court of West Pakistan at Karachi in the form of a reference-under section 66(1) of the late Income-tax Act, 1922, hereinafter referred to as the late Act. The opinion of the High Court was sought on the following question: --

"Whether in the facts and circumstances of the case the Tribunal was right in treating the Executors of the estate of late F.E. Dinshaw for assessment year 1953-54 and the two beneficiaries of late F.E. Dinshaw for the two subsequent assessment years 1953-54, 1954-55 as owners of the estate bearing Survey No.5-26 within the meaning of section 9 of the Income-tax Act? "

The learned counsel for the assessee before the High Court in the above case contended that the word `owner' used in section 9(1) of the late Act did not mean only a person holding legal title but also a beneficial owner. This contention was repelled the Division Bench as follows: --

"(5) In support of the reference Mr. Dingomal, the learned counsel for the assessee has contended that the word `owner' used in section 9(1) of the Income-tax Act, 1922 does not mean only a person holding legal title but also a beneficial owner. According to the learned counsel it is used in its ordinary sense. The learned counsel contended that the sellers having parted with the possession and having received full value for the property in dispute had ceased to be its owner. The argument of Mr. Dingomal is that the word `owner' should be understood in its popular, sense and not in a restricted sense as understood under the Transfer of Property Act. In our opinion, the contention of the learned counsel has no force. The attempt of learned counsel to canvass for the recognition of some inferior degree of ownership has not been made for the first time before this Court. In Burma Railways v. Secretary of State for India. (1921) ITC 140) it was held that owner must be interpreted in a wide and popular sense but in later decisions this view was not accepted. Dalip Singh, J. in the Commissioner of Income-tax, Lahore v. Dewan Bahadur Dewan Kirshna Kishore (1939) 7 Income Tax Report 427) dissented from this view and held that a person in the control and management of certain property cannot be regarded as the owner of the property."

It was also urged by the learned counsel for the assessee in the above case that under section 9 of the Income-tax Act, the income was to be assessed in the hand of a party, who actually recovered it but the same was rejected. Wahiduddin Ahmed, J. (as his Lordship then was) speaking on behalf of the Division Bench in that connection, observed as follows: --

"(10) The contention of Mr. Dingomal that under section 9 of the Income?tax Act the income is to be assessed in the hand of a party who actually recovers it has not impressed us and is without substance. In support of his contention the learned counsel relied on the case of Ballygunge Bank Ltd., Calcutta v. Commissioner of Income-tax, Bengal A I R 1947 Cal. 159 in which it was held that income derived from ownership of buildings by the lessees was chargeable for income?-tax in their hand. This case is clearly distinguishable because in that case the lessors were found to have no right of ownership in the structures during the continuance of the tenancy. Reliance was further placed on: --

(1) (1957) ITR 233 at p. 242 (in the matter of official assignee for Bengal State of (sic); and

(2) (1941) ITI'. 695 Commissioner of Income-tax, Punjab v. Dewan Bahadur Dewan (sic) Kishore).

We have earlier discussed the effect of the second case cited by the assessees in which contrary view has been taken. In the first case it was held that the official Assignee was the owner of the property and could be assessed in respect of the property which vested in him by virtue of section 17 of the Presidency Town Insolvency Act. Cases of this nature stand on a different footing. In both the cases it was found that the real owner of the income from property was the lessee of the estate of the bankrupt and assessable under section 9 of the Income-tax Act.

(11) In our opinion, the true test under section 9 of the Income-tax Act for assessing the income is to find out who is the owner of property. It is the owner alone who can be assessed to income-tax. It may be that the owner may not be able to recover the rent or may be out of possession, or there is no likelihood to recover the rent from the property owned, but that would not in the least exempt him from his liability to pay income-tax under the said provision of law. Somewhat similar point was also involved in two Bombay cases D.M. Vakil and others v. Commissioner of Income-tax A I R 1946 Bombay 350 and Sir Currimbhoy Ibrahim Baronetcy v. Commissioner of Income-tax Bombay City (1963) 48 I T R 507."

In the above second case, the facts were that the assessee company was incorporated in January, 1955. One of its objects specified in its Memorandum of Association was to take on lease or otherwise acquire and to hold, improve, lease or otherwise dispose of land, houses and other real and personal property and to deal with the same commercially. It appears that within less than two weeks of its incorporation, the assessee company took on lease a market place for an initial term of 50 years and also undertook to spend Rupees five lacs for the purpose of remodelling and repairing the structure on site. The assessee company was given the right to sublet its portions. The matter came up before the Indian Supreme. Court in the form of an appeal by the assessee company. The question before the Court was, whether the assessee company's income from subletting the stalls was assessable as business income under section 10 of the Income-tax Act, 1922, or as income from other sources under section 12. It was held by the Indian Supreme Court that since the assessee company was not owner of the property or any part thereof, no question of making the assessment under section 9 arose and that the assessee company's case fell under section 10 of the Act.

8. On the other hand, Mr. Shaikh Haider, learned counsel for the respondent, has referred to the following cases: --

(i) Commissioner of Income-tax, Madras v. The Madras Cricket Club (1934) 11 ITR 209;

in which the facts were that the assessee took on long lease a parcel of land from the Government and erected building thereon. The assessee was entitled under the terms of the lease to remove the building within the stripulated period on the termination of the said lease. The matter came up before the High Court of Madras to consider the question, whether the assessee was assessable in respect of the annual value of the building under section 9 of the Income-tax Act, 1922. It was held that the Club was the owner of assessed for the annual value of the building above Act.

(ii) Ballygunge Bank Ltd., Calcutta v. Commissioner of Income-tax, Bengal (1946) 14 ITR 409.

In the above case the assessee company's one of the objects was to acquire land to build houses and to let them out to tenants. It obtained a lease of a plot of land for a period of 40 years, the lease-deed provided inter alia that the assessee company should build house the land within a specified time by using the best material. The lease also 3 vided that the assessee company should pay the entire municipal tax in respect of the houses and proportionate municipal tax in respect of the land. It was also provided that upon acquisition of the land by the Government or by a public authority, the lessors were entitled to of compensation in respect of the land but compensation in respect of the buildings was to be divided between the lessors and the lessees. It was also provided in clause 14 of the lease that the lessees would not be entitled to remove the structure on the expiry of the period of 40 years' lease and the same would pass on to the lessors. The question came up for consideration before the Calcutta High Court in the form of Reference, namely, whether the assessee company was liable to be assessed under section 9 of the Indian Income-tax Act in respect of the rent derived from the buildings as the owner of the buildings. The above question was answered by the Calcutta High Court in the affirmative. In order to arrive at the above conclusion, inter alia, the following conclusion was arrived at: --

"In my opinion, the lessors have no right of ownership in the structures until the lease determines by effluxion of time upon erection the assessees were the owners and their ownership continues throughout the period of the lease until its expiration when, and not before, the ownership will pass to the lessors.

(iii) The Commercial Properties Ltd. v. The Commissioner of Income-tax, Bengal (1928) 3 I T R 23;

in which the assessee company's sole object was to acquire lands to build houses and to let them to the tenants. It owned three properties, the sole business of the company being the management and collection of rent from the said properties. On assessment to income-tax under section 9 of the Act, the company claimed that they were carrying on business assessable under section 10 and not under section 9. It was held by the Calcutta High Court while maintaining the orders of the Income-tax authorities that the company was to be assessed under section 9 as the owner of the buildings.

(iv) Additional Commissioner of Income-tax, Bihar v. Lawlys Enterprises(P.) Ltd. (1975) 100 I T R 369;

In the above case, the facts were that the assessee was the lessee of a building. The assessee company constructed a third floor on the building and was running a hotel business. Under the terms of the lease the assessee had the right to make additions and alterations to the building. On the expiry of the lease the assessee was to deliver possession to the lessee in its original condition. The question before the Patna High Court was whether the assessee company was entitled to depreciation in respect of above third floor constructed by it by virtue of section 32 of the Indian Income-tax Act, 1922. It was held that as the assessee had the right to remove additions before handing back possession of the building at the end of the lease, the lessee was owner of the third floor. It was further held that full ownership for a period does not militate against the consent of ownership in jurisprudence.

(v) Commissioner of Income-tax, Lucknow v. Chandra Agro P. Ltd. (1979) 117 1 T R 251;

in which the facts were that the assessee company took lease for a period of ten years. It incurred expenditure for the construction of partition walls, fitting tiles in some portion of the building of which lease was taken. It converted some portion of the floor of the building in mosaic floor. The assessee company claimed depreciation on the expenditure incurred thereon. The Income-tax Officer declined but the Appellate Tribunal allowed the same by holding that the improvements belonged to the assessee for the duration of the lease. Upon a reference, Allahabad High Court maintained the above view of the Appellate Tribunal and held that the assessee was in fact and in law the owner of the improvements of permanent nature effected by the assessee. It was further held that it was a business investment in the shape of making permanent improvements and that the fact that on expiry of the lease the improvements would go with the building, did not alter the fact that during the duration of the lease the assessee continued to remain the sole owner of the improvements. It was also held that the assessee was entitled to the depreciation on the capital expenditure under section 32.

(vi) Commissioner of Income-tax, Poona v. Alpana Talkies (1983)139 ITR 1055;

In the above case, the facts were that the assessee carried on the business of exhibiting films in the theatre leased to him. Under the lease agreement the lessee was to keep the theatre m good condition and to make all repairs. The premises were to be surrendered with the fittings, fixtures, additions and alterations on the expiry of the lease period. The assessee demolished the theatre and constructed a new one during the period from January-July, 1962. In respect of the assessment years 1964-65 to 1969-70 the assessee firm claimed depreciation in respect of the theatre building, furniture and fixtures as well as plant, machinery and electric fittings. The above claim was rejected by the I.T.O. on the ground that the lessor had not divested himself of the ownership of the land and the building. However, the Appellate Assistant Commissioner took the view that the assessee was entitled to depreciation. Upon reference, the Bombay High Court held that in view of the positive stipulation in the lease agreement that the theatre would became the property of the lessor only on the expiry of the lease, it was clear that the ownership of the new theatre was to vest in the assessee and, therefore, he was entitled to depreciation under section 30 of the Indian Income-tax Act.

9. The cases relied upon by Mr. Sirajul Haq Memon support the case of the appellant inasmuch as they indicate that the word `owner' used in the relevant section of the late Act cannot be given extended meaning for the purpose of taxation under section 9. The cases relied upon by Mr. Shaikh Haider are distinguishable from the facts of the present case. In all the above cases the structure which was raised by the lessee/assessee concerned remained vested in him either up to the expiry of the lease deed or even thereafter by providing the removal of the same by the lessee/assessee, whereas in the present case under the lease agreement, the structure was to vest in the Auqaf Department from the very inception when it was raised. Mr. Shaikh Haider has also referred to the meaning of the word `being' by referring to the Chambers Dictionary and Stroud's Judicial Dictionary, Third Edition, Volume 1, wherein it has been defined inter alia as `a state or condition existent at the time when the conclusion of law or fact has to be ascertained' or `existence, substance, essence'. He has also referred to the meaning of the word `owner' given in the Stroud's Judicial Dictionary,' Third Edition, Volume 3, page 19, wherein it has been stated that the owner or proprietor of a property is the person in whom (with his or her assent), it is for the time being beneficially vested and who has the occupation or control or usufruct of it, for example, a lessee is during the term the owner of the property demised.

10. In our view, the above meanings of the words `being' or `owner' do not support the case of the respondent. The word `owner' used in section 9 of the late Act and now section 19 of the Ordinance has been subject-matter of judicial interpretation. The interpretation placed by the Courts while construing section 9 of the late Act, generally will be applicable while construing subsection (13) of section 12 of the Ordinance. However, we may observe that a lessee in whom ownership of the structure/building vests in terms of the lease or otherwise, may be treated as owner in terms of subsection (13) of section 12 of the Ordinance.

11. It may be observed that the question before us is, as to whether the High Court was justified in holding that subsection (13) of section 12 of the Ordinance is applicable to the appellant though under the terms of the lease agreement, the structure was vested in the Auqaf Department even during the currency of the lease agreement. We are not concerned with the fact, whether the appellant can be taxed in respect of the above non-refundable amount received by them from the tenants under any other provision of the Ordinance. The word `income' as described in clause (24) of section 2 of the Ordinance has very wide connotation, whereas section 11 and other provisions of the Ordinance deal with the question of computation of the total income: The appellant's case may fall under some other provision of the Ordinance but unless we hold that they were the owner of the buildings, their case cannot be covered by subsection (13) of section 12 of the Ordinance. At this stage, it may be pertinent to refer to the well-settled Principles of Interpretation of taxing provisions in a statute. In this regard, it may be advantageous to quote certain passages from the Maxwell on the Interpretation of Statutes, Twelfth Edition, page 256, Crawford on Statutory Construction, 1940 Edition, pages 502-503, and Craies on Statute Law, Fifth Edition, page 106: --

Passage from the Maxwell on the Interpretation of Statutes, p.256:

"Statutes which impose pecuniary burdens are subject to the same rule of strict construction. It is a well-settled rule of law that all charges upon the subject must be- imposed by clear and unambiguous language, because in some degree they operate as penalties: the subject is not to be taxed unless the language of the statute clearly imposes the obligation, and language must not be strained in order to tax a transaction which, had the legislature thought of it, would have been covered by appropriate words. `In a taxing Act', said Rowlatt, J., `one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used'. But this strictness of interpretation may not always enure to the subject's benefit, for `if the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be'.

As a general rule, and in accord with the prevailing view, revenue laws, and particularly tax laws, should be construed in favour of the tax-payer and against the Government. In fact, they are to be construed liberally in favour of the tax-payer and any substantial doubt resolved in favour of the citizen. Hence, any tax proceedings must be in strict accord with the provisions of the statutes relating thereto.

This view rests, so it would seem, upon the principle that tax cannot be imposed without the use of clear and express language. To hold otherwise, would allow the Courts to impose taxation, and that would clearly constitute an encroachment upon the power of the legislature. More than that, taxation is a process which interferes with the personal and property rights of the people, although it is a necessary interference. But because it does take from the people a portion of their property, seems to be a valid reason for construing tax laws in favour of the tax-payer. It is also a destructive power. So far as property rights are concerned, it occupies an analogous position to that occupied by statutes which restrict and destroy personal liberty. Accordingly in case of doubt or ambiguity, that construction should be adopted which opposes the imposition of the tax.

Passage from Craies on Statute Law page 106: --

"If a statute professes to impose a charge, `the rule', said the Judicial Committee in Oriental Bank v. Wright (q), is `that the intention to impose a charge upon a subject must be shown by clear and unambiguous language.?

12 The cardinal principles of interpretation of a fiscal statute seem to be that all charges upon the subject are to be imposed by clear and unambiguous words. There is no room for any intendment nor there is any equity or presumption as to a tax. A fiscal provision of a statute is to be construed liberally in favour of the tax-payer and in case of any substantial doubt the same is to be resolved in favour of the citizen. Keeping in view the above principles of interpretation, we cannot hold that the appellant is the owner of the building though under the terms of the lease agreement, the same stood vested in the owner of the land. The word `being' might have advanced the respondent's case if the building would not have been vested in the Auqaf Department and the appellant, though lessee, could have been treated as `being the owner of the building' in terms of subsection (13) of section 12 of the Ordinance by virtue of the fact that they had raised the building.

13. The upshot of the above discussion is that the above appeal is allowed, the judgment of the High Court is set aside and the order of the Income-tax. Appellate Tribunal is restored. The above question stands answered in the affirmative. However, there will be no order as to costs.

A.A./M-1695/S?????????? ?????????????????????????????????????????????????????????? Question answered.