I. T. AS. NOS. 411/IB AND 412/IB OF 1993-94, DECIDED ON 27TH SEPTEMBER, 1995 VS I. T. AS. NOS. 411/IB AND 412/IB OF 1993-94, DECIDED ON 27TH SEPTEMBER, 1995
1996 P T D (Trib.) 286
[Income-tax Appellate Tribunal Pakistan]
Before Ch. Irshad Ahmad, Judicial Member and Junejo M. Iqbal, Accountant
Member
I. T. As. Nos. 411/IB and 412/IB of 1993-94, decided on 27/09/1995.
Income Tax Ordinance (XXXI of 1979)---
----Ss. 80-D & 62---Interpretation and scope of S.80-D, Income Tax Ordinance, 1979---"Turn over"---Meanings---Provision of S.80-D, Income Tax Ordinance, 1979, being not part of machinery sections, chargeability of tax under the said section is assessable under S.63, Income Tax Ordinance, 1979 and appealable before the Commissioner of Income-tax (Appeals).
Section 80-D of the Income Tax Ordinance, 1979 provides that notwithstanding anything contained in the Ordinance or any other law for the time being in force where no tax is payable or paid by a company or a registered firm resident in Pakistan or the tax payable or paid is less than one-half per cent of the amount representing its turnover from all sources the aggregate of the declared turnover shall be deemed to be the income of the said company or a registered firm and tax thereon shall be charged in the manner specified in subsection (2). Explanation below subsection (2) of section 80-D ibid, provides that "turnover" means gross receipts exclusive of trade discount shown on invoices or bills derived from sale of goods or from rendering, giving or supplying services or benefits or from execution of contracts.
Section 80-D is a charging section and forms part of substantive provision of the law and is not the part of the machinery sections. The chargeability of tax under section 80-D is of course assessable under section 62 of the Ordinance and any order made by the I.T.O. under section 62 of the Ordinance is appealable before Appeal Commissioner.
Tax under section 80-D is chargeable only on "turnover" as defined in the Explanation below subsection (2) of the section which reads to mean "gross receipts exclusive of trade discount shown on invoices or bills derived from sale of goods or from rendering, giving or supplying services or benefits, or from execution of contracts". The meanings of the expression "turnover" as given in the above Explanation are to be construed narrowly and strictly for two reasons: Firstly, that the definition starts with the word "means" and where any definition begins with the word "means" the meanings are to be confined within the four corners of the words used, and secondly, the meanings of the "turnover" would involve burden on the citizen and any provision which imposes any pecuniary burden on the citizen is to be construed strictly.
(b) Interpretation of statutes---
---- Definition clause---Constitution---Where definition starts with the word "means", the meaning are to be confined within the four corners of the words used.
Muhammad Ali Shah, D.R. for Appellant
Nemo for Respondent
Date of hearing: 26th September, 1995.
ORDER
CH. IRSHAD AHMAD (JUDICIAL MEMBER). ---Section 80-D of the Income Tax Ordinance provides that notwithstanding anything contained in the Ordinance or any other law for the time being in force where no tax is payable or paid by a company or a registered firm resident in Pakistan or the tax payable or paid is less than one-half per cent of the amount representing its turnover' from all sources the aggregate of the declared turnover shall be deemed to be the income of the said company or a registered firm and tax thereon shall be charged in the manner specified in subsection (2). Explanation below subsection (2) of section 80-D ibid provides that "turnover" means gross receipts exclusive of trade discount shown on invoices or bills derived from sale of goods or from rendering, giving or supplying services or benefits or from execution of contracts.
During the assessment years 1991-92 and 1992-93 the assessee having the status of a company, besides income from business, earned income from property and interest from certain investments. The assessing officer has levied tax under section 80-D of the Ordinance on the total income of the assessee including receipts of income from house property and from interest etc.
On assessee's appeal, the Appeal Commissioner has directed that the tax under section 80-D ibid shall not be charged on assessee's income from house property and interest. The Appeal Commissioner is of the view that tax on turnover under section 80-D ibid is payable only in respect of receipts from business and not receipts from other sources.
Through these appeals, the ITO has objected to the order of the Appeal Commissioner on the sole ground that since the Appeal Commissioner had no jurisdiction to entertain appeal against his order made under section 80-D of the Ordinance his directions to exclude the rental and interest income from the assessee's turnover are illegal.
We have heard Mr. Muhammad Ali Shah, D.R. for the. I.T.O. None has appeared on behalf of the assessee in spite of the fact that the notice of hearing of appeal has been served on it.
The learned D.R. has contended that appeal before the. Appeal Commissioner lies only in respect of I.T.O.'s orders made under specified sections of the Ordinance enumerated in section 129 and since an order under section 80-D is not included in the said section, the assessee's appeal before him was not competent. The Department's contention is not well founded.. Section 80-D is a charging section and forms part of substantive provision of the law and is not the part of the machinery sections. The chargeability of tax under section 80-D is of course assessable under section 62 of the Ordinance and any order made by the I.T.O. under section 62 of the Ordinance is appealable before the Appeal Commissioner. We have also examined the merits of the Appeal Commissioner's order. Under section 80-D ibid all receipts of an assessee from whatever source derived are not to be charged to tax. Tax under section 80-D is chargeable only on "turnover" as defined in the Explanation below subsection (2) of the said. section which reads to mean "gross receipts exclusive of trade discount shown on invoices or bills derived from sale of goods or from rendering, giving or supplying services or benefits, or from execution of contracts". The meanings of the expression "turnover" as given in the above Explanation are to be construed narrowly and strictly for two reasons: firstly, that the definition starts with the word "means" and where any definition begins with the word "means" the meanings are to be confined within the four corners of the words used, and secondly, the meanings of the "turnover" would involve burden on the citizen and any provision which imposes any pecuniary burden on the citizen is to. be construed strictly.
For the reasons given above, we see no force in these appeals. The same are rejected.
M.B.A/149/Trib. ???????????????????????????????????????????????????????????????????????????????? Appeals rejected.