JALLUNDUR CO-OPRATIVE TRNPT.SOCIETY LTD. Versus INCOME TAX OFFICER
This appeal by Jullundur Co-operative Transport Society Ltd. raises the question of whether the appellant is liable to be assessed to income tax for the assessment years 1956-57 to 1959-60 as an individual or as an association of persons. The core legal question concerns the interpretation of the term 'individual' under section 3 of the Income-tax Act. The Supreme Court held that the term 'individual' under section 3 means a natural person and not a legal entity such as a co-operative society, thereby rendering the appellant liable to be assessed as an association of persons rather than an individual. The appeal was accordingly dismissed as withdrawn with costs, affirming the settled principle regarding the construction of 'individual' in tax law.
- Whether the term 'individual' under section 3 of the Income-tax Act means a natural person or a legal entity?
- Is a co-operative society liable to be assessed to tax as an individual or an association of persons?
- Section 3, Income-tax Act
ORDER
1. MUHAMMAD YAQUB ALI, C. J .-The question raised in this appeal by Jullundur Co-operative Transport Society Ltd., Lyallpur, assesses, is whether it is liable to be assessed to tax for the years 1956-51, 1957-58, 1958-59 and 1959-60 as an individual or an association of persons. The liability to assessment is otherwise not disputed.
2. If the appellant's status is that of an individual within the purview of section 3 of the Income-tax Act, its members cannot be made personally liable for payment of tax. But in case the appellant is assessed as an association of persons then the liability falls on each and every member of the society. The purpose of this appeal, therefore, is to avoid the liability of the members of the appellant society to pay tax for the assessment years 1956-57, 1957-58 195E-59 and 1959-60.
3. I1 is pointed out by Sh. Abdul Haq, learned counsel for the respondent that in The Punjab Province v. The Federation of Pakistan PLD19556FC72 this Court has, on good authority and for cogent reasons held that after the amendment of section 3 in 1939 the term 'individual' means a natural person and not a legal entity as is claimed by the appellant before us.
4. After the citation of the aforementioned case, Mr. Hashmi, learned counsel for the appellant expressed the desire to withdraw the appeal. He is allowed to do so but before dismissing the appeal we would like to observe that we are in complete accord with the view expressed in The Punjab Province v. The Federation of Pakistan that the term 'individual' in section 3 or the Income-tax Act means a natural person and not a legal entity such as co-operative society. The society is, accordingly, to be assessed as an association of persons and not as an individual.
5. The appeal in dismissed with costs.
6. S. Q. Appeal dismissed.