Income Tax Ordinance (XXXI of 1979)---

----Ss.2(16)(b) & 80-D---Societies Registration Act (XXI of 1860), S.1-- "Company"---Body Corporate, duly registered under the Societies Registration Act, is not a "Company" as defined in S. 2(16)(b), Income Tax Ordinance, 1979 as such minimum tax @ 0.5% is not leviable on its turnover/gross receipts under S.80-D of the Income Tax Ordinance, 1979---Principles illustrated.

The societies registered under the provisions of Cooperative Societies Act is not a 'company' within the meaning of section 2(16)(b) of the Income Tax Ordinance, 1979.

Clause (a) of section 2(16) of the Income Tax Ordinance, 1979 covers the Companies registered under the Companies Ordinance. 1984, whereas, clause (b) covers the other institutions i.e. Corporations incorporated by or under an enactment, such as, (1) National Bank of Pakistan, (2) Pakistan Insurance Corporation. (3) Industrial Bank of Pakistan, (4) Agricultural Development Bank of Pakistan, (5) Pakistan International. Airlines. These are the illustrations of the Corporations formed `by' or `under' a statute. These are the statutory corporate bodies which are covered by section 2(16)(b). The terms 'by' or `under' are synonymous and interchangeable terms. The expression "law in force for the time being" also relates to a particular statute under which a body is directly established and to no other law. The intention of the Legislature is to embed only such corporate bodies into the definition of company, which are directly established, constituted, and created by the relevant statute itself. However, where the body has been formed by private individual and subsequently, registered under the relevant law, it would not be a body formed under the law, rather would be a body formed otherwise, but registered under the law.

The Societies, registered under the Societies Registration Act cannot be equated with the companies registered under the Companies Ordinance or incorporated under a statute, therefore, such bodies cannot be treated as company as defined in section 2(16)(b) of the Income Tax Ordinance, 1979.

Commissioner of Income Tax, Sukkur Zone, Sukkur v. Messrs Attia Higher Secondary School, Khairpur Income Tax Appeal No. 372 of 1999 and Commissioner of Income Tax, Wealth Tax v. Messrs Engineering Cooperative Housing Society 2000 PTD 3388 ref.

Javed Farooqui for Appellants.

Rehan Hassan Naqvi and Miss Lubna Parvez for Respondents.

Date of hearing: 14th February, 2003.

JUDGMENT

SHABBIR AHMED, J.---We intend to dispose of the above appeals by common judgment at Katcha Peshi stage with notice to the parties counsel as the question involved in all appeals are common based on similar facts pertaining to the assessment years 1995-1996, 1996-1997 and 1997-1998.

We have heard the learned counsel for the parties.

The only question involved in above appeals is whether the learned Income Tax Appellate Tribunal was justified in holding that the assessee who is a body corporate, duly registered under the Societies Registration Act, is not a company as defined in section 2(16)(b) of the Income Tax Ordinance, 1979 (the Ordinance in short) as such minimum tax at 0.5% is not leviable on its turnover/gross receipts under section 80-D of the Ordinance.

Before proceedings further, it would be expedient to reproduce .the section 2 (16) of the Ordinance. 'Company' means---

(a) company as defined in the Companies Ordinance, 1984; of

(b) a body corporation formed by or under any law for the time being in force; or

(bb) a trust formed by or under any law for the time being in force; or

(c) a body corporate incorporated by or under the law of a country outside Pakistan relating to incorporation of companies; or

(cc) a Modaraba as defined in Modaraba Companies and Modarabas (Flotation and Control) Ordinance, 1980;

(d) the Government of Province;

(e) the foreign association, whether incorporated or not, which the Central Board of Revenue may, by general or special order, declare to be company for the purpose of this Ordinance for such assessment year or years (whether commencing before, or on or after the first day of July, 1979) as may be specified in the said order;)

In Commissioner of Income Tax, Sukkur Zone, Sukkur v. M/s. Attia Higher Secondary School, Khairpur (Income Tax Appeal No. 372 of 1999) we have taken the view that the societies registered under the provisions of Cooperative Societies Act is not a `company' within the meaning of section 2(16)(b) of the Ordinance.

The aforesaid view taken by us is-in agreement with the view of learned Judge of Lahore High Court in Commissioner of Income Tax, Wealth Tax v. Messrs Engineering Cooperative Housing Society (2000 PTD 3388).

Learned counsel for the appellants, contention was that because the respondents are registered under the Societies Registration Act, as such would be `company' as defined under section 2(16)(b) of the Ordinance: If the provision of sub-clause (b) is interpreted as suggested by Mr. Javed Farooqui then the clause (a) would be redundant and no redundancy can be attributed to the Legislature. We are of the view that sub-clause (a) covers the Companies registered under the Companies Ordinance, 1984, whereas. Clause (b) covers the other institutions i.e. Corporations incorporated by or under an enactment, such as, (i) National Bank of Pakistan, (2) Pakistan Insurance Corporation, (3) Industries Bank of Pakistan, (4) Agricultural Development Bank of Pakistan, (5) Pakistan International Airlines. These are the illustrations of the Corporations formed `by' or `under' a statute. These are the statutory corporate bodies which are covered by section 2(16)(b). The similar question was addressed by a Bench of Lahore High Court and conclusion drawn Was that the term `by' or `under' are synonymous and interchangeable terms. The expression law in force for the time being also relates to a particular statute through which a body is directly established and to no other law. The intention of the Legislature is to embed only such corporate bodies into the definition of company, which are directly established, constituted, and created by the relevant statute itself. However, where the body has been formed by private individual and subsequently, registered under the relevant law, it would not be a body formed under the law, rather would be a body formed otherwise, but registered under the law.

The Societies, registered under the Societies Registration Act cannot be equated with the companies registered under the Companies Ordinance or incorporated under a statute, therefore; cannot be treated as company as defined in section 2(16)(b) of the Income Tax Ordinance, 1979. Resultantly, these appeals have no merit and the same are dismissed in limine.

These are the reasons of short order announced on 14-2-2003.

M.B.A./C-74/KAppeals dismissed.