Income Tax Ordinance (XXXI of 1979)---

----Ss. 55 & 80-CC---Workers' Welfare Fund Ordinance (XXXVI of 1971), S.4(3)(7)---Constitution of Pakistan (1973), Art. 199-- Constitutional petition---Demand of Workers Welfare Fund ---Assessee was being assessed and taxed under Presumptive Tax Regime under S.80-CC of Income Tax Ordinance, 1979, which regime immuned it from filing of return of total income under S.55 of Income Tax Ordinance, 1979 and tax so deducted would be deemed to be final discharge of its tax liabilities under Income Tax Ordinance, 1979-- Amount paid by assessee as Workers' Welfare Fund would be treated under S.4(3) of Workers' Welfare Fund Ordinance, 1971 as an expenditure for purpose of assessment of Income Tax as such Fund was not deductible---High Court accepted the Constitutional petition and set aside such demand declaring the same to be illegal and without lawful authority.

LT.A. No.447 of 1998; Commissioner of Income-tax v. Kamran Model Factory 2002 PTD 14; Commissioner of Income-tax v. Al-Karam Lamps (Pvt.) Ltd. Peshawar and others 2000 PTD 2182 and Commissioner of Income-tax, Multan v. Allah Yar Cotton Ginning and Pressing Mills (Pvt.) Ltd. 2000 PTD 2958 fol.

Ilyas Zafar with Shughufta Jabeen for Petitioner.

Waseem Majid Malik for Respondent.

Dates of hearing: 9th, 13th and 22nd May, 2002

JUDGMENT

The petitioner feels aggrieved by a demand created by respondent No.1 under Workers' Welfare Fund Ordinance, 1971 vide order, dated 16-10-1997 (Annexure B).

2. Learned counsel for the petitioner argues that in terms of section 4(3) of the said Ordinance of 1971, the said fund is to be paid with reference to the total income reported in a return of income to be tiled under section 55 of the Income Tax Ordinance, 1979. The precise plea is that the petitioner is being assessed under the Presumptive Tax Regime under section 80-CC of the said Income Tax Ordinance, 1979 and this regime immunes it from filing of return under section 55 of the Income Tax Ordinance, 1979. Further contends that the amount paid as Workers' Welfare Fund is to be allowed as an expense for the purpose of the assessment of Income Tax under section 4(7) of the said Ordinance, 1971. Whereas the tax paid under section 80-CC is the final discharge and such expense is not to be allowed. The learned counsel has referred to judgment, dated 1-4-2002 of a learned Division Bench of this Court in I.T.A. 447 of 1998, judgment of learned Division Bench of the High Curt of Sindh reported as Workers' Welfare Fund Issues resolved by Sindh High Court (2002 PTD 14 High Court Karachi), judgment of learned Division Bench of High Court of Peshawar in the case reported as Commissioner of Income Tax v. Al-Karam Lamps (Pvt.) Ltd., Peshawar and others 2000 PTD 2182 in support of his contentions. Learned counsel for the respondent on the other hand has tried to support the impugned demand by referring to a judgment of a learned Division Bench of this Court in case Commissioner of Income Tax Multan v. Allah Yar Cotton Ginning & Pressing Mills (Pvt.) Ltd. (2000 PTDA 2958).

3. Under section 80-CC (3), it is laid down that where an assessee has no income other than the income referred to in subsection (1) in respect of which Tax has been deducted under subsection (5-A) of section 50, the tax as deducted, shall be deemed to be final discharge of his tax liabilities under the said Ordinance, 1979 and he is not required to file the return of total income under section 55. There is no denial of: the fact that the petitioner is being assessed and taxed under the said section 80-CC. I have examined the said judgments being relied by the learned counsel for the petitioner. The respective learned Division Benches of this Court, High Court of Sindh and High Court of Peshawar have laid down that the said fund is not deductible in case of such an assessee. I n lay note here that in the said case reported as 2002 PTD 2958 a different view has been taken by this Court This case, however, was decided on 12-4-2000, however, in the said I.T.A. 447 of 1998, decided on 1-4-2002 a learned Division Bench of this Court, Lahore, leading opinion having been delivered by my learned brother Nasim Sikandar, J. who was also a member of the D.B. hearing the said earlier decided case. have taken the same view taken by their lordships of the Sindh and Peshawar High Courts. In this view of the matter, the consensus of judicial authority is in favour of the proposition being propounded by the learned counsel for the petitioner. Following the said dictums, I do hold that in case of the petitioner who is being assessed under the Presumptive Tax Regime under section 80-CC of the Income Tax Ordinance, 1979, the said Worker' Welfare Fund is not deductible. This writ petition is accordingly' allowed, the impugned demand raised vide order, dated 16-10-1997 (Annexure B) by respondent declared to be without lawful authority and is accordingly set aside orders as to costs.

S.A.K./M.A.K/R-135/L Petition accepted.