VS, 2008 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 1522 (2008)

Income Tax Ordinance (XLIX of 2001)---

----S.221---Income Tax Ordinance (XXXI of 1979), S.156---Workers Welfare Fund Ordinance (XXXVI of 1971), Preamble---Rectification of mistake---Workers Welfare Fund---Tax years, 2006---Levy of Workers Welfare Fund was agitated on the ground that after repealed Income Tax Ordinance, 1979 with effect from 2002; and enforcement of Income Tax Ordinance, 2001 the correspondents in Workers Welfare Fund Order, 1971 were not made---Mention of authorities was made by the Income Tax Ordinance, 1979 and no such mention had been made in the Income Tax Ordinance, 2001---Levy of Workers Welfare Fund under the Income Tax Ordinance, 2001 was illegal---Appeal was allowed by the First Appellate Authority---Subsequently, it was pointed out in a rectification application that original appeal order had inadvertently mentioned the tax year, 2006 which was to be corrected and assessment years from the assessment years 1989-90 to 2002-2003 and tax year 2003-2004 were to be mentioned with different amount of revenue pertaining to each year---Rectification application was accepted and Workers Welfare Fund was levied in each year accordingly---Validity---Original order passed by the First Appellate Authority was based on the finding that entire levy pertained to assessment year, 2006 and that such levy under the Income Tax Ordinance, 2001 was not leviable---Rectification order passed by the First Appellate Authority had totally changed the situation---Rectified order mentioned assessment years wherein Workers Welfare Fund was leviable under the Income Tax Ordinance, 1979 also pertaining to assessment years 1998-99 to 2001-2002---Finding of First Appellate Authority with regard to assessment years, 2002-2003, tax years, 2003-2004 and 2005 was based on correct findings the levy of Workers Welfare Fund .in the assessment year 1998-99 to 2001-2002 under the Income Tax Ordinance, 1979 was also justified by the Taxation Officer which was upheld by the Appellate Tribunal---Rectification order of First Appellate Authority may be amended and Workers Welfare Fund leviable under Income Tax Ordinance, 1979 may be confirmed.

2007 PTD (Trib.) 1860 ref.

Ali Gohar D.R. for Appellant.

Abdul Tahir Ansari, ITP for Respondent.

ORDER

IQBAL AHMED (ACCOUNTANT MEMBER)---The departmental appeals have been filed against the order of Commissioner of Income Tax (Appeals) passed under section 156 of Income Tax Ordinance, 1979 read with section 221 of the Income Tax Ordinance, 2001. The grounds of appeals filed by the department are as under:

(i) That the order passed by the learned Commission of Income Tax (Appeals) Hyderabad is bad in law and on facts.

(ii) That the CIT(A) was not justified to delete W.W.F. which was charged by passing order under sections 156/221 of the Income Tax Ordinance.

(iii) That the Taxation Officer was rightly charged W.W.F. in accordance with Worker's Welfare Fund Ordinance.

(iv) That the CIT(A) has deleted the W.W.F. on the plea that the W.W.F. Ordinance, 1971 does not mention the authorities empowered under the Income Tax Ordinance, 2001 for the period under appeal. But the authority mentioned in W.W.F. Ordinance under Income Tax Ordinance, 1979 as DCIT is also included in the definition of Taxation Officer which is authority under Income Tax Ordinance, 2001.

(v) That the appellant craves permission to add, amend or alter the grounds of appeal at the time of hearing.

Since the issue involved in all these appeals is common, a combined order is framed.

2. Brief facts of the case are that the appellant had originally filed appeal against the order passed by the Taxation Officer against the levy of W.W.F. in the above case. The original appeal order of CIT(A) mentions the assessment year under appeal as the assessment year, 2006 and revenue involved to the tune of Rs.2,17,017. At the time of hearing of original appeal it was agitated by the appellant that the action of Taxation Officer in levying the W.W.F. under the Income Tax Ordinance, 2001 was not justified. The plea taken by the appellant's AR was that after the repealed Income Tax Ordinance, 1979 with effect from 2002; and enforcement of Income Tax Ordinance, 2001 the corresponding amendments in W.W.F. Ordinance, 1971 were not made.

The plea taken by the appellant's AR was that whereas in the Income Tax Ordinance, 1979 the mention of authorities (Deputy Commissioner) was made by the Income Tax Ordinance, 1979 no such mention has been made in the Income Tax Ordinance, 2001. As such the levy of W.W.F. under the Income Tax Ordinance, 2001 was illegal. The AR of the appellant took advantage of the decision of ITAT reported as 2007 PTD (Trib.) 1860 in which it was held by the learned Tribunal that since the authorities under the Income Tax Ordinance, 2001 being not mentioned in the Workers' Welfare Fund Ordinance, W.W.F. cannot be charged. The CIT(A) accepted this plea and allowed the appeals.

3. Subsequently on rectification application moved by the AR of the appellant Mr. H.R. Usmani, Advocate appeared before the CIT(A) and pointed out to the CIT(A) that the original appeal order has inadvertently mentioned the year of assessment as 2006 which in fact was to be corrected and assessment years from the assessment years, 1989-90 to 2002-2003 and tax year, 2003 to 2004 were to be mentioned with different amount of revenue pertaining to each year. The rectification application of the appellant was accepted by the CIT(A) and accordingly rectification order was passed mentioning different assessment years commencing from assessment year, 1988-89 onward and mentioning different amounts of W.W.F. levied in each year. It is against this order that the appeal has been filed. As is apparent from the above facts. The original order passed by the CIT(A) was based on the finding that the entire levy pertained to the assessment year, 2006 and that such levy under the Income Tax Ordinance, 2001 specially in view of the ratio of ITAT's case mentioned above was not liable. The rectification order passed by CIT(A) has totally changed the situation. The rectification order mentioned assessment years wherein W.W.F. was liable under the Income Tax Ordinance, 1979 also pertaining to assessment years 1998-99 to 2001-2002.

4. At the time of hearing of appeal this point was agitated by the D.R. of the department who vehemently argued against the rectification order passed by the CIT(A) and its consequential effect. Mr. Tahir Advocate appeared on behalf of the Taxpayer and argued that the order of CIT(A) suffers from no infirmity despite the facts of its having been rectified. This Court has heard the arguments; perused the record and is of the opinion that whereas the finding of CIT(A) with regard to the assessment year 2002-2003, tax year, 2003 tax year, 2004 tax year, 2005 is based on correct findings the levy of W.W.F. in the assessment years 1998-99, 1999-2000, 2000-2001 and 2001-2002 under the Income Tax Ordinance, 1979 was also justified by the Taxation Officer concerned. The levy of W.W.F. for the assessment years 1998-1999, 1999-2000, 2000-2001 and 2001-2002 is therefore upheld. In this view of the matter the rectification order of the CIT(A) may be amended and W.W.F. leviable under Income Tax Ordinance, 1979 may be confirmed. The appeal succeeds to the extent discussed above.

C.M.A./48/Tax (Trib.)Order accordingly.