COMMISSIONER OF INCOME-TAX VS ANITA GHOSH NOTE 3, P.
1997 P T D (Trib.) 9
[Income-tax Appellate Tribunal Pakistan]
Before Ch. Irshad Ahmad, Judicial Member
I.T.A. No. 213(113) of 1995-96, decided on 23/09/1996.
Income Tax Ordinance (XXXI of 1979)---
----First Sched. Part III, Para. B, Cl. (c) & S.59---Self-Assessment Scheme (1993-94), para. 1(c)---Surcharge---Expression "income-tax" as used in Self Assessment Scheme (1993-94), para. 19(e) does not cover 'surcharge'-- Return will be qualified for acceptance under Self-Assessment Scheme (1993 94) if the assessee has paid income-tax higher than 10% of only the income-tax component of the tax paid for the last year---Condition of paying higher income-tax as compared to the tax paid for the last year referred to only to the income-tax, and not the total sum of the income-tax and the surcharge paid for the last year.
Nemo for Appellant.
Khawas Khan Niazi, D.R. for Respondent
Date of hearing: 23rd September, 1996.
ORDER
Paragraph 1(e) of the Self-Assessment Scheme of the income-tax for the Assessment year 1993-94 (the scheme) provides, among others, that returns of existing assessees where the income-tax paid for the Assessment year 1993-94 is not higher by 10% or more as compared to the tax paid on the basis of income last declared or assessed, whichever is higher, shall not qualify for acceptance under the Scheme. Sub-paragraph (c) of paragraph B of Part III of the First Schedule to the Income Tax Ordinance, 1979, provides that where the total income of any person not being a person whose total income consists of or includes any income chargeable under the head 'salary' and such income constitutes more than fifty per cent. of the total income does not exceed one hundred thousand rupees and the return of total income qualifies for acceptance under a scheme of self-assessment made under subsection (1) of section 59 for that year, the amount of surcharge payable shall be three hundred rupees (the surcharge).
2. For the Assessment year 1992-93 the assessee had paid a sum of Rs.130 as income-tax and Rs.300 as the surcharge---total Rs.430. In her return of income for the Assessment year 1993-94 the assessee declared her net income at Rs.31,430. A sum of Rs.143 was payable as income-tax on the declared income. With her return fried under the scheme the assessee paid the
| Income Tax | Rs.143 |
| Surcharge | Rs.300 |
| Total: | Rs.443 |
3. The assessing officer did not accept the return under the Scheme for the reason that the tax paid with the return was not higher by 10 % as compared to the total sum paid for the last year. According to the assessing officer since the assessee had paid Rs.430 (income Tax Rs.130 + Surcharge
Rs.300 = Rs.430) for the last year to qualify her return for acceptance under the Scheme for the year 1993-94 she was required to pay the tax which was 'higher by 10% of the sum (Rs.430) paid for the last year and the minimum amount payable was Rs.473 = 430 + 43 i.e. 10% of Rs.430, and as the payment made was short the return did not qualify for acceptance under the Scheme. And, after usual proceedings the assessing officer made assessment at net income of Rs.1,45,000 which was computed as under:---
| Sales estimated | Rs.6,00,000 |
| G.P. @ 30% | Rs.1,80,000 |
| Less expenses | Rs. 35,000 |
| Total income | Rs.1,45,000 |
4. The assessee's appeal has been rejected by the Appeal Commissioner. Through this appeal the assessee has objected to the orders of the tax authorities whereby her return has not been accepted under the Scheme.
5. None has appeared for the assessee in support of the appeal in spite of the fact the notice of hearing of appeal has been tendered at the address given in the memo. of appeal. I have heard Mr. Khawas Khan Niazi, D.R.
6. The appeal raises an important question in respect of the interpretation of the expression "income-tax" as used in clause (e) of paragraph 1 of the Scheme. As set out earlier the above clause provides that a return of an existing assessee shall not qualify for acceptance under the Scheme where the income-tax paid for the Assessment year 1993-94 is not higher by 10% or more as compared to the tax paid on the basis of the income last declared or assessed. As also set out earlier Part III of the First Schedule to the Income Tax Ordinance provides that where the total income, of any person does not exceed Rs.1,00,000 and the return of total income qualifies for acceptance under the scheme of self-assessment an amount of Rs.300 is payable by the assessee as surcharge. The tax authorities are of the view that the requirement of the Scheme that a return filed by an existing assessee under the Scheme shall qualify for acceptance under the Scheme only if the income-tax paid for the Assessment year 1992-93 is higher by 10% or more as compared to the tax paid for the last year refers to the total amount of tax paid for the last year which would include the surcharge. To the contrary the assessee's contention is that the condition of paying 10% or more income-tax refers only to the income-tax component of the sum paid for the last year excluding the amount of surcharge. The D.R. has contended that since the expression "tax" as defined in section 2(43) of the Ordinance includes surcharge therefore the condition of higher payment of income-tax would apply to the total amount paid as tax including the surcharge.
7. I have considered the tax authorities' point of view, and in my opinion they are not right in their view. Clause (e) of paragraph 1 of the Scheme refers to "income-tax" and the expression "income-tax" shall not cover surcharge. It 'is true that the expression "tax" as defined in section 2(43) of the Ordinance includes surcharge, but it refers to income-tax as one of the various forms of taxes leviable under the Ordinance. Thus although the expression "tax" would include income-tax and surcharge but the expression "income-tax" would not include surcharge, and since the condition of payment of more tax under the Scheme refers to "income-tax" therefore a return would qualify if the assessee has paid income-tax higher than 10 % of only the income-tax component of the tax paid for the last year If the view entertained by the tax authorities is accepted and the expression "tax' on the basis of income last assessed or declared as used in paragraph 1(e) of the Scheme is taken as referable to the total sum paid as income-tax and surcharge it would lead to an anomalous position which even the tax authorities do not seem to support. Clause (e) of paragraph 1 of the Scheme says that the "income-tax" paid with the return filed under the Scheme should be higher than 10% or more as compared to the "tax" paid on the basis of income last declared or assessed. If the expression "tax paid on the basis of income last declared or assessed" is taken to refer to income-tax plus surcharge then alone the income tax component to be payable with the return under the Scheme should be more than 10 % of the said total amount and in this way the assessee's return filed under the Scheme would qualify for acceptance under the Scheme only if she would have paid Rs.773 i.e. Rs.473 as income-tax and Rs.300 as surcharge, and not Rs.473 as worked out by the S tax authorities. Thus, it appears that the expression "income-tax" and the expression "tax" used in clause (e) of paragraph 1 of the Scheme refer only to the income-tax part of the total amount paid with the return for the last year. The above conclusion is also supportable with reference to the basis on which tax paid for the last year was calculated. Clause (e) of paragraph 1 of the Scheme also refers to the tax paid on the basis of the income last declared or assessed. Only the income-tax is computed on the basis of the declared or assessed income. The surcharge is not computed. It is a fixed amount leviable after the return has been accepted under the Scheme. It is trite rule that the expressions in statute are to be assigned the meanings with reference to its context in which they are used. With reference to the context an expression may bear a meaning which is quite different from its meaning defined in the statute. Since the expression. "income-tax" referred to in paragraph 1(e) of the Scheme refers to the tax paid on the basis of income last declared or assessed therefore it must refer to the tax which is computable on the basis of income and that is only for "income-tax".
8. For the above reasons I would hold that since the assessee had paid the income-tax equal to 10% of the such tax for the last year with her return for the year under appeal her return fully qualified for acceptance under the Scheme.
9. Accepting the assessee's appeal the 'tax authorities' orders are vacated and the assessing officer is directed to accept the assessee's return under the Scheme.
M.B.A./247/Trib. Order accordingly.