(a) Income-tax---

----Income---Exemption---Exempt income will form part of total income though not taxed.

(b) Maxim---

----"Expressio unius est exclusio alterius" (Expresss mention of one thing implies the exclusion of another) was neither absolute nor was of universal application.

(c) Income-tax---

----Exempt income---Total income ---Assessability---All kinds of income, including exempt income will form part of total income and, therefore, assessable under the Income Tax Ordinance, 1979 even though tax liability to whole or a part of it may never arise.

(d) Income-tax---

Assessable" and "taxable" both had different meanings and applications. All kinds of income above a certain limit were "assessable" under the Income Tax Ordinance, 1979 though some or part of some of them may not be "taxable".

(e) Income-tax---

----"Assessment"---Meaning---Declaration of income, the claim qua exemption and its acceptance by the Assessing Officer was an "assessment".

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

----Ss. 14 & 48---Workers Welfare Fund Ordinance (XXXVI of 1971), S.4- All incomes including an income exempted with reference to S.14(1) of the Income Tax Ordinance, 1979 were assessable under the Income Tax Ordinance, 1979---Non-mentioning of the provision with S.48 of the Income Tax Ordinance, 1979 in S.4(1) of the Workers Welfare Fund Ordinance, 1971 was, therefore, of no significance at all.

(g) Income-tax---

----Exemption---Claimant of an exemption had to bring same home without any ambiguity.

(h) Interpretation of statutes-

---- Two equal possible interpretations one favouring the revenue to be adopted.

Army Welfare Sugar Mills Ltd. v. Federation of Pakistan 1992 SCMR 1652 rel.

(i) Workers Welfare Fund Ordinance (XXXVI of 1971)---

----Ss. 3 & 4---Income Tax Ordinance (XXXI of 1979)---Exemption-- Charge of workers welfare fund through Ss.3 & 4 of the Workers Welfare Fund Ordinance, 1971 in no way stands relinquished in view of an exemption granted under the Income Tax Ordinance, 1979 for any consideration whatsoever.

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

----Ss. 14, 48 & Second Sched., cls. (118-A) & (118-D)---Workers Welfare Fund Ordinance (XXXVI of 1971), Ss.3 & 4---Exemption---Industrial establishment---Workers Welfare Fund---Workers Welfare Fund was charged by the Income Tax Department on the exempt income of industrial establishment which income was exempt under Second Sched of the Income Tax Ordinance, 1979 and the same was deleted by the Appellate Tribunal-- Validity---Industrial establishment was liable to pay workers welfare fund though they enjoy exemption under anyone or more of the provisions of the Income Tax Ordinance, 1979---Once an industrial establishment returns an income which was "assessable" under the Income Tax Ordinance, 1979, though no tax was leviable for the reason of an exemption, shall remain subject to the levy of the Fund---Word "assessable" could not be allowed to be read as "taxable"---Appellate Tribunal was not justified in deleting the Workers Welfare Fund charged under Ss.3 & 4 (1) of the Workers Welfare Fund Ordinance, 1971---Exemptions provided under Second Sched to the Income Tax Ordinance, 1979 were not extendable so as to grant a similar exemption from the Workers Welfare Fund as chargeable under the provisions of Workers Welfare Fund Ordinance, 1971 and Income-tax Department acted only as a collecting agent.

I. T.A. No. 1963 of 1987-88 ref.

Ch. Saghir Ahmad, Standing Counsel for Appellant

Nafeers Ahmad Ansari for Respondent.

Date of hearing: 12th April, 2000.

JUDGMENT

NASIM SIKANDAR, J.---Section 4 of the Worker's Welfare Fund Ordinance, 1971 provides for the charge, rate, mode of payment and recovery from Industrial Establishments of the Fund constituted under section 3. It requires that every industrial establishment, the total income whereof is not less than one lac of rupees in any year of accounting shall pay to the Fund a sum of equal to 2 % of so much of its total income as is assessable under the Income Tax Ordinance, 1979 or would have been so assessable but for the exemption made by section 48 thereof.

The assesses in all these departmental appeals detailed at the end of this order are admittedly industrial establishments and as such are liable to pay the Fund at the prescribed rate. To that extent there is no dispute at all as their incomes during the accounting years were also in excess of the minimum limit of rupees one lac. However, all these industrial establishments enjoyed exemption from income tax with reference to clause (118-A) (deleted from the second schedule on 7-11-1991) or (118-D) (deleted by Finance Act, 1995), of Schedule-II of the Income Tax Ordinance. It is the case of the assessee that the Fund is leviable only with reference to the income tax liability and that their income being exempt from levy of income tax, it is not assessable under the Income Tax Ordinance. According to them the income in respect of which no income tax is payable, the corresponding liability of payment to. the fund does not arise at all.

3. However, they faded to convince the Assessing Officer. On further appeal in some cases the CIT (Appeals) and in other cases the Income Tax Appellate Tribunal with reference to their earlier judgments proceeded to allow the contention. This has brought the department in further appeal under section 136 of the Income Tax Ordinance, 1979.

4. The following common questions of law are said to have arisen out of the various orders of the Tribunal:

(1)Whether under the facts and circumstances of the case the learned Tribunal was justified to delete the workers welfare fund charged under section 4(4) of the Workers Welfare Funds Ordinance, 1971.

(2)Whether the exemption provided under the Second Schedule to the Income Tax Ordinance, 1979 can be extended to the workers welfare funds chargeable under section 4(4) of the Workers Welfare Fund Ordinance, 1971.

(3)Whether the scope of the tax as defined under section 2(43) of the Income Tax Ordinance, 1979 can be enlarged by inclusion of Workers Welfare Fund.

5. We have considered the submission made at the bar for the parties. The Tribunal allowed the impugned relief with reference to a Karachi Bench order, dated 16-7-1989 recorded in I. T. A. No. 1963 Karachi Bench of 1987-88 (assessment year, 1985-86) mainly for two reasons. Firstly that concept and scope of word "total income" as used in section 11 of the Income Tax Ordinance, 1979 (for short the Ordinance) made it clear that the fund was chargeable only on total income, of an assessee which was assessable under the Ordinance. The Tribunal agreed with the contention that since the part of income of the assessee was not assessable in view of exemption clause (122) of the Second Schedule to the Ordinance, section 4 of the Workers' Welfare Fund Ordinance did not apply to its case. The use of word "total income" in the above phrase, according to the Tribunal made it clear that if the whole or any part of total income of an assessee was not assessable under the Ordinance the corresponding liability to the Fund Was not attracted. In the view of the Tribunal if the intention of the legislature was to maintain the levy of the fund even in cases of exempt income then a specific mention of section 14 ought to have been made with section 48 as referred to in subsection (1) of section 4 of the Workers Welfare Fund Ordinance.

6. We are informed that a Division Bench of the Peshawar High Court on 2-6-1999 in Tax Reference No.4 of 1996 re: Commissioner of Income -Tax v. M/s Al-Karam Lamps (Private) Limited has maintained the orders of the Tribunal for almost similar reasons. Their Lordships found that section 14 of the Ordinance spelled out general powers of the Federal Government to exempt income or classes of income or persons or classes of persons from the levy of income tax. For that purpose the Second Schedule to the Ordinance contained a list, which was liable to be altered through a notification in the official gazette. Section 48 of the Ordinance mentioned in section 4(1) of the Workers Welfare Fund Ordinance was a specific provision which provided for "exemption from tax of newly-established industrial undertakings". Further that the income of the assessee not being assessable due to exemption granted under section 14 of the Ordinance or any other exempting provision other than section 48 of the Ordinance, neither its total income was assessable under the Ordinance nor liable to pay the Fund. Accordingly their Lordships expressed the view that as long the income of an industrial establishment was exempted and was not assessable under section 14 of the Income Tax Ordinance, the levy and charge of Worker's Welfare Fund was an additional burden and, therefore, not in accordance with law.

7.Since all the three questions as framed by the Department are inter linked, it appears appropriate to deal with them jointly.

8. The Tribunal in their judgments accepted and there is hardly any doubt that Workers Welfare Fund is a beneficial piece of legislation created for "providing residential accommodation and other facilities for workers ...." Their view that mentioning of section 48 of the Ordinance in section 4(1) of Workers Welfare Fund Ordinance was a pointer that other exemptions under the Ordinance, entailed an exemption from the levy of the Fund as well does not appear correct. The interpretation of section 4 of the Workers Welfare Fund Ordinance by the Tribunal in fact amounts to allow reading of one provision of a law into another i.e. section 14(1) and clauses (118-B) and (118-D) of the Second Schedule to the Income Tax Ordinance into the Workers Welfare Fund for which there hardly appears any justification. The grant of exemption under section 14 of the Income Tax Ordinance, 1979 is made for a number of reasons which, generally speaking, will not have any relevancy with the purpose and levy of the Fund as provided for in Workers Welfare Fund Ordinance.

9. Section 48 of the Ordinance provides for exemption from levy of income tax in respect of newly-established industrial undertakings while admittedly the respondents in all these cases enjoyed exemption allowed under section 14 of the Ordinance read with the said two clauses of the Second Schedule (now deleted). While finding for the assesses the Tribunal obviously dealt with together the concept and scope of total income and the exemption clauses of the Second Schedule as contemplated in section 14 of the Ordinance. Further, their view appears to be partly based upon the legs maxim that express mention of one is exclusion of the other. That view, however, cannot be accepted for two reasons. Firstly the Tribunal over looked the fact that in the Second Schedule the words and phrase "exclusions from total income" had been substituted by "Exemption from total Income" through the Finance Act, 1988. It certainly happened after their first decision on the subject, which they kept on following even after the said change. At the time of promulgation of the Ordinance in the year, 1979 Part 1 of the Second Schedule was titled as "exclusion from total income". However, in the year 1988 the word "exclusion" was substituted by the word "exemption . The plain effect of the charge being that after amendment all incomes or classes of incomes or persons or classes of persons mentioned in the Second Schedule enjoyed exemption from "inclusion" in total income. In other words exempt income under the Schedule read with proviso to section 14 of the Ordinance will remain a part of the total income but will not be taxed. This substitution, if all the other reasons prevailing with the Tribunal are accepted will by itself be sufficient to change 'the nature and scope of total income after the amendment in the title of the Second Schedule as well as the corresponding change in that order in section 14 of the Ordinance itself. The simultaneous addition of a proviso to section 14(1) by the Finance Act, 1988 made it absolutely clear that all incomes exempted through the Second Schedule shall nevertheless be included in total income so, however, that the tax shall not be payable in respect of such income. The natural result of the proviso, therefore, being that exempt income with reference to section 14 and the Second Schedule became "assessable" under the Ordinance.

10. It may further be seen that the Tribunal did not take note of the provisions of section 49 of the Income Tax Ordinance nor the learned Division Bench at Peshawar was referred to these provisions. Section 49 of the Ordinance provides that any allowance admissible or any sum exempt from tax under any provision contained in that Ordinance shall be included in the total income but may be deducted from such income for the purposes of computing the tax payable by an assessee. The proviso to section 14, the change in the title of the Second Schedule when seen together with section 49 it emerges clearly that an exemption allowed under section 14 or any other provisions of the Ordinance including section 48 of the Ordinance has completely identical consequences. It is that the income so exempted will form part of the total income though it shall not be, taxed.

11. The rule that express mention of one is exclusion of the rest is neither absolute nor is of universal application.

12. In our considered view the key of the controversy lies in phrase "so much of its total income as is assessable under the Ordinance" as used in section 4(1) of the Workers Welfare Fund Ordinance. According to section 9 of the Income Tax Ordinance, 1979 read with section 55 thereof every person is required to put in return if it is "assessable" under the Ordinance. The only exception being a person whose income falls below the minimum amount, which is chargeable to tax under the Ordinance. As observed above all kinds of incomes, including exempt income will form part of total income and, therefore, assessable under the Ordinance even though a tax liability to whole or a part of it may never arise. The interpretation of the Tribunal in fact has resulted in interchanging the words "assessable" with the words "taxable". Both words are certainly different with different meanings and implications. All kinds of incomes above a certain limit are "Assessable" under Ordinance though some or part of some of them may not be taxable. The declaration of an income, the claim qua its exemption and its acceptance) by the Assessing Officer is an "assessment". Since all incomes are now) assessable under the Ordinance including an income exempted with reference to section 14(1) of the Ordinance, the non-mentioning of the provisions with section 48 of the Ordinance in section 4(1) of the Workers Welfare Fund'' Ordinance is, therefore, of no significance at all.

13. Mr. A. Moeed Khawaja, one of the learned counsel appearing for the respondents has placed a lot of stress on section 5 of the Worker's Welfare Fund which provides that any liability imposed on any industrial establishment that Ordinance shall be deemed to be the liability of the persons who was liable to pay income tax. These words in the view of the learned counsel mean that it is only a person liable to pay income tax who can be made liable to the payment of the Fund. However, we do not find any force in the contention. Section 5 of the Workers Welfare Fund Ordinance only points out a person from whom the recovery of Fund is to be made. Mere fact that the recovery of the Fund is to be made from the person who is liable to pay income tax does not by itself mean that if no income tax was assessed or payable against a person he shall not be liable to pay the fund as well. The provisions of section 5 of the Workers Welfare Fund Ordinance only identify the person from whom the levy is to be recovered. These cannot be read as exemption granting provisions. It is an established proposition of fiscal laws that the claimant of an exemption has to bring it home without any ambiguity. Further that in case of doubt or two equally possible interpretations the one favour to the revenue shall be adopted. For reference see the judgment in re: Army Welfare Sugar Mills Ltd. v. Federation of Pakistan (1992 SCMR 1652).

14. The provisions of Workers Welfare Fund Ordinance, 1971 are totally independent of the Income Tax Ordinance. It is correct that definition of total income, computation of the fund and its collection remains with reference to the Ordinance all along. The mode of recovery and penal provisions in cases of default under the Ordinance are also applicable to the Fund. However, that by itself does not cause fusion of Workers Welfare Fund and the Income Tax. The former is the creation of an independent legislation, which provides for collection of an amount for a specific purpose identified in the preamble and to be governed and administered by a Board. The income tax and other incidental recoveries under the Income Tax Ordinance on the other hand form part of the Federal Consolidated Fund. The Income-tax Officer or any person in the hierarchy of the Department is neither an employee of the fund nor is concerned with its use or end destination in any manner. Tile fund is a body corporate with a personality separate and independent of the levy known as income tax. Therefore, an exemption given to any assessee for whatever reason will not automatically be imported and be read as a part of the Workers Welfare Fund Ordinance. All assessees including those taming exempt income are required under the law to put in a return under the aforesaid provisions of the Income Tax Ordinance. The declaration of income is a first step and legal liability of all persons earning more than the statutory limit. The claim of exemption from the levy of income tax in whole or in part or the levy at a reduced rate is the last step in the proceedings known as assessment proceedings. The claim of the exemption in fact pre-supposes accrual of an income. However, the fact that income under any provision of Income Tax Ordinance or any other law for the time being in force stands exempted from the levy of income tax will not be itself derogate from that fact that the person had earned income and that it was assessable under that Ordinance. The charge of the Fund through sections 3 and 4 of the Workers Welfare Fund Ordinance in no way stands relinquished in view of an exemption granted under the Ordinance for any consideration whatsoever.

15. We are also not persuaded to agree that mention of section 48 in subsection (1) of section 4 of the Workers Welfare Fund Ordinance in any manner enumerates specific cages, which were liable to pay the fund despite exemption. In our view, the phrase "so much of its total income as is assessable under the Ordinance" sufficiently covers the cases of every exemption and specific mention of section 48 does not mean that other exemptions under section 14 enjoyed a privilege against those falling under section 48. It will further be noted that most of the assessees/respondents have been paying workers welfare fund and subsequently when they started enjoying exemption they put up the aforesaid defence. That means that levy of the fund is not a permanent feature and was co-existent with income chargeable to income tax. The concept, as observed above is incorrect. Practically it will happen that an industrial establishment will pay the fund in some year and will stop doing so on enjoyment of an exemption while other will start paying the Fund after completion of the exemption period. The scheme of the Workers Welfare Fund Ordinance on the other hand, contemplates it to be a recurring or perennial levy for specific purpose, which do not admit of any interruption. The levy of Workers Welfare Fund in fact is at the cost of income tax inasmuch as it has been allowed as an admissible expense. Looking at it from that angle as well we find no reason to accept the view of the Tribunal. An expense will not lose its character only for the reason that the income earned is exempt for a specific period or a certain reason.

16. Therefore, in our view all industrial establishments whose income in an accounting year is not less than Rs. l lac are liable to pay Workers Welfare Fund Ordinance at the prescribed rate even though they enjoy exemption under any one or more of the provisions of Income Tax Ordinance. Once an industrial establishment returns an income, which is "assessable" under the Ordinance though no tax is leviable for the reason of an exemption, shall remain subject to the levy of the Fund. The words "assessable" cannot be allowed to be read as "taxable". If the legislature intended to forego the levy of the Fund in cases of exempt income then nothing was more easy to say so. The levy of the Fund could have easily been co-related with income tax and not the assessable income. accordingly it is the returned income irrespective of any exemption which is to be made basis for the payment of the Fund as reference to the "income so assessed" in subsection (4) of section 4 of the Workers Welfare Fund Ordinance cannot be read and interpreted as "income so taxed".

17. Accordingly our answer to all the three questions as reproduced above is in the negative. The learned Tribunal was not justified in deleting the Worker's Welfare Fund charged under sections 3 and 4 (1) of the Workers Welfare Fund Ordinance; that the exemptions provided under Second Schedule to the Income Tax Ordinance were not extendable so as to grant a similar exemption from the Fund as chargeable under the said provisions of Workers Welfare Fund Ordinance and that income tax department acts only as a collecting agent.

18. This order will dispose of-Income-tax Appeals Nos.6, 8, 10 and 14 of 1999.

19. A copy of this order under seal of the Court and the signature of the Registrar shall be sent to Appellate Tribunal which shall pass such orders as are necessary to dispose of the cases in confirmity with this judgment.

C.M.A./M.A.K./C-16/LOrder accordingly.