I.T.A. No. 7413/LB of 2005, decided on 7th February, 2007. VS I.T.A. No. 7413/LB of 2005, decided on 7th February, 2007., 2007 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 1860 (2007)

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

----S.2(f)---Income Tax Ordinance (XLIX of 2001), Ss.138 & 239(4)---Income Tax Ordinance (XXXI of 1979), S.85---Recovery of tax out of property and through arrest of taxpayer---Tax year 2003---Levy of Workers' Welfare Fund by invoking provisions of Income Tax Ordinance, 2001---Validity---Levy of Workers' Welfare Fund was charged under the Workers' Welfare Fund Ordinance, 1974 where it had been specifically mentioned that such levy would be charged by the authorities under the Income Tax Ordinance, 1979---Authorities under the Income Tax Ordinance, 2001 having not been mentioned in the Workers' Welfare Fund Ordinance, could not charge the levy of Workers' Welfare Fund---Order of First Appellate Authority was vacated and order passed by the Taxation Officer regarding Workers' Welfare Fund was cancelled by the Appellate Tribunal.

2000 PTD (Trib.) 1185 ref.

Abdul Hameed, I.T.P. for Appellant.

Mrs. Sabiha Mujahid, D.R. for Respondent.

ORDER

The appellant through this appeal has objection against the impugned order of the learned C,I.T.(A) dated 4-6-2005 regarding the levy of Workers' Welfare Fund at Rs.6440 on the following grounds:---

"(1) That the Taxation Officer cannot levy WWF invoking provisions of Income Tax Ordinance, 2001 as he vests with no authority.

(2) That the WWF has wrongly been charged at Rs.6440 in the light of ITAT reported decision 2000 PTD (Trib.) 11815.

(3) That being the tax year 2003 demand notice should have been issued under section 138 of the Income Tax Ordinance, 2001 instead of under section 85. Thus demand raised and communicated is illegal and should have been cancelled.

(4) Though order has been delivered yet the same does not indicate the section of the Income Tax Ordinance as well as WWF. Thus WWF charged too merits cancellation."

The learned counsel representing the assessee has contended that the Taxation Officer cannot levy WWF by invoking the provisions of Income Tax Ordinance, 2001 as he vests with no authority, the charge in this regard being in accordance with the Workers' Welfare Fund Ordinance, 1974. He has contended that the year under review being the tax year 2003 demand notice should have been issued under section 138 of the Income Tax Ordinance, 2001 instead of section 85. The demand raised and communicated in the present case is illegal. It has been contended by the learned counsel that as the WWF is being charged under Workers' Welfare Fund Ordinance and in that Ordinance the Income Tax Ordinance, 2001 has not been mentioned, the authorities under the Income Tax Ordinance, 2001 cannot charge the levy of WWF. He has contended that the learned C.I.T.(A) has rejected the grounds of appeal on the ground that under section 239(4) of the Income Tax Ordinance, 2001 any proceeding under the repealed Ordinance pending on commencement of the said Ordinance shall be continued and disposed off under the Income Tax Ordinance, 1979 but as the case of the assessee is regarding assessment year 2003 which cannot be treated to be pending under the repealed Ordinance and, therefore, there was no justification for rejecting the appeal of the assessee.

On the other hand, the learned representative of the Department is, however, supporting the impugned orders of the officers below.

After considering the submissions from both the sides, we are of the view that the contention raised by the learned counsel for the appellant is having force. The levy of WWF is charged under the Workers' Welfare Fund Ordinance, 1974 wherein it has been specifically mentioned that this levy will be charged by the Authorities under the Income Tax Ordinance, 1979. We are, therefore, of the view that the authorities under the Income Tax Ordinance, 2001 being not mentioned in the Workers' Welfare Fund Ordinance cannot charge the levy of WWF.

In view of this legal position, the impugned order of the C.I.T.(A) is vacated and the order passed by the Taxation Officer regarding WWF is cancelled.

The appeal filed by the assessee is allowed.

C.M.A./46/Tax(Trib.)Appeal accepted.