I.-T.AS. NOS. 55, 56, 57(IB), 130 , 131 AND 132 OF 1984-85, DECIDED ON 20TH MAY, 1985. Versus I.-T.AS. NOS. 55, 56, 57(IB), 130 , 131 AND 132 OF 1984-85, DECIDED ON 20TH MAY, 1985.

ORDER

AMJAD ALI (MEMBER). ‑‑These are six cross‑appeals, three preferred by the Department and three filed by the assessee, against the order, dated the 19th June,1984, passed by the Commissioner of Income‑tax (Appeals), Zone‑1, Rawalpindi, whereby he set aside the assessment orders of the Income‑tax Officer, Circle‑26, Islamabad making the Overseas Pakistan Foundation, Islamabad, liable to income tax for the assessment years 1980‑81, 1981‑82 and 1982‑83. Since these appeals involve common questions of law and facts, all the appeals shall be disposed of by this single order.

2. Briefly, the facts giving rise to these appeals are that the overseas Pakistan Foundation, Islamabad, which is registered with the registrar, Joint Stock Companies, under section 26 of the Companies Act, 1913 (VI of 1913), did not file income‑tax returns within the statutory period after its incorporation with the Register of Joint Stock Companies. Consequently, a notice under section 56 of the Income‑tax Ordinance, 1979 (XXXI of 1979), was issued and in pursuance of the said notice. The Overseas Pakistanis Foundation, Islamabad (hereinafter referred to as 'the assessee') filed a return on the 31st January,1983, declaring nil income on the plea that the income of the Foundation was exempt under the income‑tax law.

3. The assessee's main contention before the Income‑tax Officer that it being charitable institution wars exempt under the law from payment of income‑tax. The Income‑tax Officer eras, however, of the view that since the objectives enumerated in the Memorandum of Association of the Overseas Pakistanis Foundation were neither religious nor charitable, the case of the assessee was not covered under clauses (93) and (94) and consequently the assessee was not exempt from payment of tax on the income derived by it from contribution of fee of Rs.555 received from every emigrant and from its other business activities. He, accordingly, by three separate orders, dated the 11th March, 1984, made the assessments of income of the assessee for the charge years 1980‑81, 1981‑‑82 and 1982‑83.

4. The assessee, feeling aggrieved of these assessments, preferred appeals before the Commissioner of Income‑tax (Appeals), Zone‑1, Rawalpindi, who came to the conclusion that all legal and technical issues involved need to be probed and analysed in detail and a policy decision taken in the case under the guidance of higher authorities, on principle and in the light of the genuinely parallel cases. He, therefore, set aside all the three assessments for reconsideration by the Income‑tax Officer.

5. The Income‑tax Department being dissatisfied with the order of the Commissioner of Income‑tax (Appeals) has brought the appeals on the ground that clauses (93) and (94) of the Second Schedule to the Income‑tax Ordinance, 1979, were not applicable in the instant case. It was also claimed that since the payments, made by the emigrants and credits to the welfare fund, vested with the assessee, the decision to set aside the same was without any legal justification. On the other hand, the assessee filed appeals against the same order of the Commissioner of Income‑tax (Appeals) claiming that, instead of setting aside the order of assessments, the Commissioner of Income‑tax (Appeals) should have decided the case on merit on the following issues:‑

"(a) exemption claimed under clauses (93) and (94) of the Second Schedule to the Income‑tax Ordinance, 1979; and

(b) taxability of welfare found and income generated therefrom."

6. Subsequently, the assessee raised the following additional grounds:‑

"(i) That the Overseas Pakistanis Foundation is not a taxable entity under the Income‑tax Ordinance,1979.

(ii) That the Welfare Fund created under the Emigration Ordinance, 1979, is income of the Federal Government and, therefore, exempt from Income‑tax under Article 165 of the Constitution of Islamic Republic of Pakistan,1973, read with Provisional Constitution Order, 1981."

Ordinarily, the additional grounds of appeal taken up try the assessee, could not be considered at this stage as these were not brought up within the period of limitation. But since these grounds of appeal raise some important questions of law which could even otherwise be considered while determining the vires of the orders of Income‑tax Officer and Commissioner of Income‑tax (Appeals), we have condoned the delay and have admitted the additional grounds of appeal for hearing.

7. It would appear from the aforesaid objections raised by the parties that the crucial issue in the case is whether the Overseas Pakistanis Foundation, Islamabad, was liable to tax under the Income‑tax Ordinance, 1979. Under section 16 of the Emigration Ordinance,1979 (XVIII of 1979), the Federal Government is empowered to make rules for carrying out the purposes of the said Ordinance. Clause (n) of subsection (2) of the said Ordinance provides that the Federal Government may also prescribed rules for creation of welfare fund and measures for welfare of emigrants and their dependents and establishment of machinery at home and abroad for the implementation of such rules. In exercise of the powers conferred upon it under section 16 ibid, the Federal Government has made rules known as 'The Emigration Rules, 1979'. which came into force on the 29th May, 1979. Under rule 26 of the said Rules, a Welfare Fund was established. How under sub‑rule (4) of Rule 23 of the Emigration Rules,1979, every emigrant is required to pay Rs.550 for crediting to the Welfare Fund. For facility of reference the said sub‑rule (4) is reproduced below:‑

"(4) A sum of five hundred and fifty rupees shall be levied in respect of every person permitted by Protector of Emigrants for employment abroad in private sector, public sector or direct employment towards the welfare Fund and be deposited‑

(i) In ease the application for employment abroad has been processed through the Overseas Employment Promoter, in the manner prescribed in rule 15; and

(ii) in case the emigrant has secured employment abroad directly from the employer, in a branch of the bank through the Protector of Emigrants.

8. Rule 15, referred to in the above quoted rule 23(4)(i), specifies the procedure for deposit of service charges of Rs.2.200 recovered from each emigrant. The said sum includes the amount of Rs.550 for crediting to the Welfare Fund for depositing in schedule banks. The amount of Rs.550 is, however, refundable of a person is no; successful in getting employment abroad. By virtue of an amendment notified by S.R.O. 1102 (1)/79, dated the 28th April, 1979, the following definition of 'Overseas Workers Foundation' was added to the Emigration Rules, 1979, namely:‑

"(gg) 'Overseas Workers Foundation' means the Foundation set up by the Federal Government to be managed by a Board of Governors with the Minister in charge of the affairs of the emigrants and such other members as the Government may from time to time nominate."

9. Similarly, by the same Notification the following sub‑rule (2) was also added to rule 26 referred to above:‑

"(2) The Welfare Fund shall vest in the Overseas Workers Foundation which shall control the said Fund and may invest money and incur expenditure therefrom on‑

(a) the social welfare of the emigrants and their families in Pakistan and abroad by identifying their problems and contributing to their solutions;

(b) the establishment and maintenance of, or giving of assistance to, vocational training institutions providing training in such trades as are in demand overseas;

(c) the establishment of housing societies, colonies and townships for the emigrants and their families in Pakistan;

(d) the giving of scholarships, stipends or grants to the children of the emigrants for studies in the fields of science, technology, art and management in Pakistan and abroad;

(e) the establishment, management and giving grants to educational or religious institutions in Pakistan and abroad in which the children of the emigrants study;

(f) the giving of grants to emigrant's societies and associations for the establishment of community centres, Libraries and mosques and for organising seminars and conferences in connection with events of national importance;

(g) the opening of offices and branches of the Overseas Workers Foundation in any part of Pakistan and abroad for the convenience or emigrants;

(h) the establishment and management of, or investment in, commercial, industrial or service enterprises;

(i) the purchasing or taking on hire of any such land, building or other property as may be necessary for the purposes of the Welfare Fund;

(j) the management, improvement and development of the property of the Overseas Workers Foundation;

(k) the collection and editing of material for, and under taking the work of, printing and publishing of pamphlets, reports journals, periodicals, dailies or other such works which may be necessary in the interest of the emigrants; and

(l) such other investments, including investment in any commercial, industrial or other enterprise as may from time to time be determined by the Overseas Workers Foundation."

10. It was, therefore, contended on behalf of the assessee that for all intents and purposes, the Overseas Pakistanis Foundation was a Government department. It was established under a statute with the concurrence and approval of the Federal Government. In support of these contentions, a reference was made to a Summary, submitted by the Minister for Labour, Manpower and Overseas Pakistan, on the 21st June,1979, seeking approval of the President for the establishment of the Foundation. The President accordingly granted the sanction for setting up of the Overseas Pakistanis Foundation. The Secretary, Finance Division, Government of Pakistan also issued the necessary certificate for registration of the Foundation as a limited company under subsection (1) of section 26 of the Companies Act, 1913 (VII of 1913). The Board of the Governors of the Foundation consisted of either the Government officials or the nominees of the Government.

11. In this connection, Mr. Hanif Bhatti, Advocate, learned counsel for the assessee also relied upon all the decisions of Sind High Court pronounced in the case of Sind Industrial Trading Estate Ltd., Karachi v. Central Board of Revenue P L D 1957 Kar.

128. In that case, the main question was whether the profits of Sind Industrial Trading Estate Limited were the income of the Provincial Government and was thus exempted from the income‑tax. The learned counsel specifically referred to the following portion of the judgment:‑

"It will thus be noted that the Sind Government's resolution referred to above, was passed under the Constitutional powers conferred on the Province by the Government of India Act, 1935, with regard to the development of industries and trade, which powers the Provinces continued or continue to have under the Constitutions of 1956, 1962 and 1973. The Sind Government, instead of discharging its Constitutional functions for the development of Industries in the Province, resorted to the device of formation of a Corporation or a Company under the Companies Act, 1913, instead of discharging these functions directly through a department of the Government. Thus, the Government of Sind clothed the activities entrusted to it under the Constitution for the development of trade and industries in the Province with a corporated personality, or to use the expression which has found favour with their Lordship of the Supreme Court, threw a veil of corporate personality over its functions as the Government of the Province of Sind. Nevertheless, it is the substance of these Governmental activities which should be looked at, and not the veil of juristic personality thrown over it."

12. Relying upon the decision made by the Lahore High Court in the West Pakistan Road Transport Board v. The Commissioner of Income‑tax P L D 1974 Note 9, the Sind High Court further held:‑

"Thus, the Sind Industrial Trading Estate Ltd., being nothing more than a department of the Provincial Government, though clothed with juristic personality, performs the essential functions entrusted to the Province with regard to the development of trade and industries. Of necessity, therefore, the income of this body corporate is the income of the Provincial Government, and, under the various constitutional provisions referred to above, this income is not assessable to tax under the Income‑tax Act,1922."

13. The decision of High Court in the case of S.I. T. E, Karachi, has also been affirmed by the Supreme Court in Central Board of Revenue v. S.I.T.E. P L D 1985 97 laying down as under:‑

"The respondent‑Company was carrying on the function of Industrial Development and the trade and business connected therewith for and on behalf of the Government. The truth is that the lifting of veil has revealed that for the relevant purposes in this case it was doing so just like a department of the Government, notwithstanding the incorporation; which as explained earlier will not make any difference regarding the relevant Constitutional Provision on exemption from Federal Taxation."

14. The learned counsel for the assessee, therefore, argued that, since the assessee‑Foundation was a Government department it was not liable to tax under the Income‑tax Ordinance, 1979. In this respect, he also drew support from the provisions of Article 165 of the Constitution of the Islamic Republic of Pakistan, 1973, which is reproduced below:‑

"165.‑‑(1) The Federal Government shall not, in respect of its property of income, be liable to taxation under any Act of Provincial Assembly, and, subject to clause (2), a Provincial Government shall not, in respect of its property or income, be liable to taxation under Act of Majlis‑‑e‑Shoora (Parliament) or under Act of the Provincial Assembly of any other Province.

(2) If a trade or business of any kind is carried on by or on behalf of the Government of a Province outside that Province, that Government may, in respect of any property used in connection with that trade or business or any income arising from that trade or business, be taxed under Act of Majlis‑e‑Shoora (Parliament) or under Act of the Provincial Assembly of the Province in which that trade or business is carried on."

15. The provisions of Article 165 of the Constitution of 1973 are identical to Article 112 of the Constitution of 1956 and Article 137 of the Constitution of 1962. These provisions specify inter se taxation policy between the Federation and the federating units. It is provided therein that in the matter of taxation the Federal Government will not be liable to taxation on its property or income within a Province under any Act of the Provincial Assembly. Similar protection is provided to the Provincial Government against Federal taxation. This Article however, does not provide exemption to the Federal Government, its departments or any institution or organisation established or controlled by it from any tax under any Act of Parliament. Learned counsel for the assessee argued that it is a presumptive legislation as and it will be presumed that when a Provincial Government is being exempted from Federal taxation, the departments of the Federal Government shall automatically be exempt from such taxation. We do not agree with the contentions of the learned counsel. The Constitution is a fundamental document which provides framework, and outlines of the various organs of the State and it. their functioning. Any omission in the Constitution cannot be taken to be in existence merely on presumption. It was held in Government of Pakistan v. Akhlaque Hussain P L D 1965 SC 527 that the first ands primary rule of construction of statute is that the intention of the Legislature must be found in the words used by Legislature itself. When the words used are clear and unambiguous, it would not be open to adopt any hypothetical construction.

16. It is also a settled principle that in financial matters no one be made liable, or exempted from taxation by presumption. The provisions t of Article 165 are very explicit and do not contain any ambiguity. This Article is a part of Chapter dealing with the 'Distribution of Revenue Between the Federation and the Provinces' and does not provide for rights of the Federal Government tinder the Constitution. In our humble view, the authorities referred to, by the learned counsel of the Foundation, are distinguishable and not applicable to the instant case. The companies in both the authorities (West Pakistan Road Transport Board and Sind Industrial Trading Estate Ltd.) were established by the Provincial Governments. Obviously, when both the companies were declared by their Lordship of the West Pakistan High Court and the Sind High Court, too be departments of the Provincial Government, these could not be made liable to taxation under any Act of the Parliament as the Provincial department stood exempted from taxation under the federal laws by virtue 4 the provisions of Article 165 of the Constitution of 1973 and similar provisions contained in the earlier Constitutions . On the other hand, the Overseas Pakistanis Foundation was set up as a limited company in pursuance of a federal statute and, therefore could not claim exemption from tax under the provisions of Article 165 of the Constitution.

17. In the alternative it was claimed on behalf of the assessee that under section 9 of the Income‑tax Ordinance 1979, charge of income tax can only be created against a 'person' as defined in clause (32) of section 2 of the said Ordinance. It was, therefore, claimed that, since the Federal Government is not included in the definition of 'person', the assessee‑Foundation which was a department of the Federal Government, is not liable to tax. In this connection, the learned counsel for the assessee referred to the following observations of their Lordships of the Lahore High Court in West Pakistan Road 'transport Hoard v. Commissioner of Income‑tax P L D 1974 Note 9 which has also been reported in detail in 1973 P T D 499:‑

"It need not be reiterated, that the income of the Federal Government is in any case not taxable because the definition of a person given in the Income‑tax specially including the Government of a Province and not mentioning the Central Government excludes the latter from its purview thus making it not taxable."

We respectfully state that there could not be any dispute with the aforesaid principle but as held by the Supreme Court in the above referred case of the Sind Industrial Trading Estate Limited P L D 1985 SC 97 that in controversy like the present one, the final decision would rest on the facts and circumstances of each case. In this connection, it has to be examined whether the assessee Foundation was a department of the Federal Government.

18. It is true that the expression 'person' as defined in section 2(32) of the Income‑tax Ordinance, 1979, does not include the Government but the said definition provides that 'every artificial judicial person' shall be deemed to a 'person' for the purposes of tax. It is not denied that the assessee‑Foundation was registered as a company under the Companies Act, 1913, in pursuance of Emigration Ordinance, 1979, and the rules framed thereunder. It has, however, been claimed that the registration of the Foundation as a company does not affect its real status of a Government Department. But, obviously, unlike the West Pakistan Road Transport Board and Sind Industrial Trading Estate Limited, the Overseas Pakistanis Foundation does not perform the function of the Government departments. It was not created to provide cheaper transport service to public at large or to extend help in establishment of industries or similar public utility services as had been done in the above referred to undertakings. In this connection, attention is also drawn to the copy of. Summary, produced by the assessee, which wv5 submitted to the Cabinet fur its consideration in its meeting, dated the 27th Fabruary,1979. For facility of reference, the proposal for establishment Of Foundation is reproduced below:‑

"An Overseas Pakistanis Foundation should be (2rcated on tire lines of the Fauji Foundation, except that its shareholders should get a reasonable amount of profit. A portion of the profit can be ear‑marked fur welfare arid charitable purposes."

19. It is clear from the underlined extract of the Summary reproduced above that the assessee‑Foundation was crated to earn profits for its share‑holders and only a portion of the profit earned by it, was to be ear‑marked for welfare and charitable purposes'. The income of the Foundation is also not restricted to the amount of Rs.550 charged from each emigrant under sub‑rule (4) of rule 23 of the Emigration Rules, 1979. As specified under sub‑rule (2) of rule 26 of the said Rules, such income also includes the interest accrued on the amounts of security deposited by the Overseas Employment Promoters, contributions and donations that may be made by the public corporate bodies, companies, welfare associations, societies, banks or such funds as are derived from any other source including from investment made in any commercial, industrial or other service enterprises. In the impugned order, the learned Commissioner of Income‑tax (Appeals) has cited the examples of Fauji Foundation and Shaheen Foundation. Although the Federal Government may have provided the funds and necessary support for establishment of these Foundations but these cannot be regarded as the Government departments. The said Foundations are liable to tax under the Income‑tax Ordinance, 1979, unless otherwise exempted by the Federal Government in exercise of the power vested in it under the provisions of the Ordinance. At this stage it was pointed out by learned Departmental Representative that the assessee had also moved an application to the Central Board of Revenues for exemption of payment of income‑tax under section 14 ibid as a company and not as a Government department. But because of certain shortcomings the said application was not accepted and the assessee was directed for supply of necessary information which till date had not been supplied.

20. A Corporation controlled or established by the Government cannot claim exemption from tax simply on the grounds that it was a statutory corporation created by the Government. A similar question had arisen in P.I.D.C. v. Pakistan P L D 1984 Kar. 1 wherein the objection raised by the assessee‑Corporation regarding its taxability was withdrawn on the ground that the definition of the 'company' as in repealed Act was amended on the lines of the definition of expression 'company' as contained in the Income‑tax Ordinance, 1979. It may also be seen that the Pakistan Industrial Development Corporation is also a corporation established and controlled by the Government but its income is taxable under the income‑tax law.

21. The rational for taxation of Government controlled corporation is that the functions of the Federation is not to act as a commercial enterprise and to earn profits from its own citizens. In this connection, the commercial organizations whether established by the Federal Government or taken over under the Economic Reforms Order, 1972 (P.O.1 of 1972) or under similar legislation, are subject to tax unless specifically exempted from levy of tax either under the statute or under the provisions of the Income‑tax Ordinance, 1979. In other words, all these undertakings are not considered as Federal Government Departments. In this respect, it will be pertinent to refer to I.‑T.A No.597 (KB) of 1977‑78 (1979) 39 Tax 13 (Tribunal) where a similar question had been raised, claiming that the share capital of the assessee‑company was exclusively held t)y the Government of Pakistan and its work has restricted to Director‑General Civil Aviation, P.I.A. Department of Tourism, Pakistan Army and other Government agencies and was directly under the control of the President of Pakistan. It was further claimed in the said case that although it had the status of a company, it was functioning as a limb of the Department of the Federal Government which has constitutional obligation for development of the airports, under items 21 and 22 of the Fourth Schedule to Article 70(6) of the Constitution of 1973. However, it was held by the Tribunal in the said case that, since the appellant had been registered as a Private Limited Company under the Companies Act, 1913, it has a taxable personality. The Appellate Tribunal further held as under:‑

"It is, therefore, clear that after the incorporation, the main concern of the appellant is to earn profits and these too in any part of the world. This cannot be the function of the Government of Pakistan. In our opinion, therefore, the appellant Company is clearly a 'Commercial Organisation' which has the patronage of financial support of the Government of Pakistan but in no way it can represent the Government of Pakistan nor can call itself a department or a limb of the Federal Government."

On the same analogy, the Overseas Pakistan Foundation also cannot claim status of a department of the Government, as it does not perform any Governmental functions. Its main function as specified in the preceding paragraph, is to ‑earn profits for distribution amongst its shareholders. Therefore, it can safely be said that the assessee‑Foundation was not given a "veil of incorporation" for a purpose, but, in fact, it was accorded the status of a company with lull intention and knowledge to create a corporate body earn profits for the emigrants. .

22. Lately, there has new development in the law. By virtue of the Constitutional (Amendment) Order, 1985 (P.O,11 of 1985) a new Article 165‑A has been added in the Constitution of Pakistan. For facility of reference, the said Article is reproduced below:‑

"165‑A(1).

For the removal of doubt, it is hereby, declared that Majilis‑e -Shoora (Parliament) has, and shall be deemed always to have had, the power to make a law to provide for the levy and recovery of a tax on the income of a corporation, company or other body or institution established by or a under a Federal law or a Provincial law or an existing law or a corporation, company or other body of institution owned or controlled, either directly or indirectly by the Federal Government or a Provincial Government regardless of the ultimate destination of such income.

(2) All orders made, proceedings taken and acts done by any authority or person, which were made, taken or done, or purported to have been made, taken or done, before the commencement of the Constitution (Amendment) Order, 1985, in exercise of the powers derived from tiny law referred to in clause(1), or in execution of any orders made by any authority in the exercise or purported exercise of powers as aforesaid, shall, notwithstanding any judgment of any Court or tribunal, including the Supreme Court and a High Court, be deemed to be and always to have been validly made, taken or done and shall not be called in question in any Court, including the Supreme Court and a High Court, on any ground whatsoever.

(3) Every judgment or order of any Court or tribunal including the Supreme Court and a High Court, which is repugnant to the provisions of clause (1) or clause (2) shall be, and shall be deemed always to have been‑, void and of no effect whatsoever.

23. The learned counsel for the assessee conceded that the effect of the amendment was quite drastic. But he claimed that, as enunciated by clause (3) of Article 165‑A ibid, the purpose of the new constitutional provision was to specifically render the judgments of the Supreme Court and the High Court of Sind given in Sind Industrial Trading Estate reported in P L D 1985 SC 97 and P L D 1975 Kar. 128 and also in the judgment given in West Pakistan Road Transport Board v. Commissioner of Income‑tax 1973 P T D 499 as ineffective. According to him the said purpose has been achieved thereby, but even then the principle laid down in the said judgments could not be ignored. He also claimed that provision‑ of Article 165‑A were not applicable in the instant case‑‑ The reason being that clause (1) of Article 165‑A ibid speak of law which was or had to be made by the 'Parliament' alone. In this connection, he referred to Article 50 of the Constitution which provides that 'there shall be a Majlis‑e‑Shoora (Parliament) of Pakistan consisting of the President and two Houses to be known respectively as the National Assembly and Senate. Further, the definition of 'Act of Parliament' provided in Article 260 of the Constitution lays down that 'Act of Majlis‑e‑Shoora (Parliament)' means an Act passed by Majlis‑e‑Shoora (Parliament) or the National Assembly and have been assented by the President.'

24. It was, therefore, urged that although the Income‑tax Ordinance, 1979, was enforced by a competent legislative authority, it was not an Act of Parliament and, therefore, unless a law is made by the Parliament as enunciated in the aforesaid constitutional provisions, the provisions of Article 165‑A were not attracted in the case of the assessee Foundation. In this connection, learned counsel, also referred to dictionary meaning of the expression 'Parliament' and also the definition of the Parliament as given in the 1956 Constitution which we need not reproduce here as the same would not be relevant.

25. The learned counsel has, however, not contested the vires of the Income‑tax Ordinance, 1979 (XXXI of 1979), and has admitted that it was a valid piece of legislation. The Income‑tax Ordinance, 1979, was promulgated by the President of Pakistan in pursuance of the Proclamation of the 5th day of July 1977, read with the Laws (Continuance of Force) Order, 1977 (C.M.L.A. Order No.1 of 1977), which empowered the President of Pakistan to make and promulgate Ordinance. Irrespective of the life span of an Ordinance which is not under discussion here, by virtue of Article 89 of the Constitution of 1973, except when the National Assembly is not in' sessions, the President 'if satisfied that the circumstances exist which tender it necessary to take immediate action,' is empowered to make and promulgate Ordinance as the circumstances may require. Such Ordinance possess 'the same force and effect as an Act of Parliament.' Clause (2) of Article 260 of the Constitution also provides that an Act of Parliament or Federal law shall include an Ordinance promulgated the President: an Act of Parliament or Federal law shall include an Ordinance promulgated by the President. In saying so, we also find support from a decision of the Sind High Court given in Kazi Abdul Majeed v. Province of Sind P L D 1976 Kar. 600. Therefore, the contention of the assessee‑Foundation that, unless a statute passed by the National Assembly and Senate and: assented by the President is enforced, the provisions of Article 165‑A will not be attracted to the case, is devoid of any force. The provisions of Article 165‑A of the Constitution have bee‑n brought into force with retractive operation. It clearly provides that the income of a corporation, company or other body or institution established by or under a Federal law or a Provincial law or an existing law or corporation or company and other institution established or controlled directly or indirectly by the Federal Government or Provincial Government regardless of the ultimate destination of such income shall be subject to tax.. Therefore, in view of this new constitution all amendments, irrespective of the fact that the Overseas Pakistanis Foundation was established and controlled by the Federal Government or that its income is deposited in the Government treasury or in a Scheduled Bank or that its income is, in fact, the income of the Federal Government, it shall be liable to tax.

26. It was also urged on behalf of the assessee‑Foundation that since it was a welfare institution, therefore, it was exempt from tax under clauses (93) and (94) of the Second Schedule of the Income‑tax Ordinance, 1979. Although the learned Commissioner of Income‑tax (Appeals) has not given specific findings on the said issue, but the Department has objected to the impugned order on the ground that, since the Welfare Fund vested with the assessee, the provisions of clauses (93) and (94) referred to above were not applicable in the instant case. In this regards we do not agree with the contention of the assessee. The reasons being that all the contributions to the Foundation are not voluntarily. In parctice, the amount of Rs.550 which is paid by every emigrant who gets a job abroad, is recovered from his earnings abroad, in advance. It is, clear from sub‑rule (1) of rule 26 of the Emigration Rules, 1979, that the Welfare Fund consists of several sources including the amount of interest received from Overseas Employment Promoters and investment made in commercial or industrial undertaking or order service enterprises. It is admitted that the Foundation had made investment in the transport business by plying mini‑buses. Explanation to clause (93) of Second Schedule of Income‑tax Ordinance, 1979 provides that the amount "set apart". expended or disbursed or the maintenance and support wholly or partially of the family, children or descendents of the author of the trust or for his own maintenance and support during his life time or payment to himself or his family, children, relations or descendents for the payment of his or their debts out of the income profits and gains of the property dedicated or any expenditure made other than for charitable purpose such expenditure, provision, setting apart, payment, or disbursement shall not be deemed for the purposes to be for religious or charitable purposes". This explanation makes it abundantly clear that any portion y of the donation spent upon the donor or any member of his family shall not be treated for religious or charitable purposes.

27 In Hamdard Dawakhana v. C .I. T . P L D 1980 SC 84, it was held by the Supreme Court that only that part of income which is set apart and is applied for religious and charitable purposes will be exempt from tax. Precisely, the Explanation to clause (93) of Second Schedule of the Ordinance clarifies this very legal position. In the instant case, as mentioned earlier, in the Summary submitted to the President requesting for according approval to the establishment of the Overseas Pakistani Foundation clearly provided that the Foundation was intended to be created so that its "share‑holders get a reasonable amount of profit (and only) a portion of the profit will be earmarked for the welfare and charitable purposes". The Central Board of Revenue had also informed the assessee accordingly when it made an application for exemption from tax under section 14 of the Ordinance. The Income‑tax Officer has rightly referred to the provisions of memorandum of association which clearly provide that all the objects enumerated therein do not relate to charitable or religious purposes. It was contended on behalf of the assessee that certain business enterprises undertaken by it for providing facility to emigrant had not proved profitable and were, therefore, abandoned forthwith. Whether the commercial enterprises undertaken by the assessee‑Foundation proved to be beneficial and profitable or not the fact remains that the assessee had undertaken business proposition by investing its capital in transport and providing travel services. Similarly, it arranged training courses and charged fee thereof. The assessee has also not established on the record that amount vested with it was ever spent on any religious or charitable purpose. Under clause (14) of section 2 of the Income‑tax Ordinance, 1979, the 'charitable purpose' includes relief for the' poor, education, medical relief and the advancement of any other object of general public utility. There is nothing on the record to show that any amount of Welfare Fund was utilized for any such object of general utility. Consequently, the claim of the assessee‑Foundation that it was solely a charitable and religious institution is devoid of any force.

28. In view of the above discussion, we are of opinion that the learned Commissioner of Income‑tax (Appeals) had erred in setting aside the assessments made by the Income‑tax Officer as the assessee Foundation is not exempt from payment of tax under the Income‑tax Ordinance, 1979. The assessee has not contested the quantum of the assessed income for the purpose of tax, therefore, no findings therein are called for. Hence, all the three appeals filed by assessee‑Foundation are dismissed and that of the Department are accepted. Resultantly, orders of the learned Commissioner of Income‑tax (Appeals) Zone‑I, Rawalpindi, passed in three appeals of the assessee for the assessment years 1980‑81, 1981‑82 and 1982‑83 are vacated and that of the Income‑tax Officer are resorted.

M. Y. H. Appeal accepted.