Pakistan Case LawTHE COMMISSIONER OF INCOME TAX/WEALTH TAX, COMPANIES ZONE-III,
This matter comes before the Supreme Court of Pakistan through civil petitions arising from a consolidated judgment of the Lahore High Court regarding income tax assessments. The core legal question concerns whether a co-operative society, having attained the status of a body corporate under the Co-operative Societies Act, 1925, falls within the statutory definition of a 'Company' under section 2(16)(b) of the Income Tax Ordinance, 1979, thereby affecting advance tax deduction obligations under section 50(4)(a) of the said Ordinance. The Court held that the petitioner raised substantial questions regarding the interpretation of corporate status and tax liability, finding the High Court's contrary view unsustainable in law. Consequently, the Court granted leave to appeal to examine the matter further. The key principle laid down is that a co-operative society possessing body corporate status under relevant provincial legislation may qualify as a company for the purposes of income tax assessment.
- Does a co-operative society registered under the Co-operative Societies Act, 1925 qualify as a 'Company' under section 2(16)(b) of the Income Tax Ordinance, 1979?
- Whether advance tax is liable to be deducted on goods supplied or contracts executed by a co-operative society under section 50(4)(a) of the Income Tax Ordinance, 1979?
ORDER
IRSHAD HASAN KHAN, C.J.- Through this common order, we intend to dispose of Civil Petitions Nos. 2257-L of 2000, arising out of a consolidated judgment dated 23.5.2000 passed by the Lahore High Court in Income Tax Appeals Nos. 297/99, 303/99, 311/99, 439/98, 472/99, 501/2000, 508/2000 and 511/2000.
2.Mr. Muhammad Ilyas Khan, learned Senior ASC contends that section 50(4)(a) of the Income Tax Ordinance, 1979 (hereinafter referred to as the Ordinance), provides that where the total amount of goods supplied or of contracts executed in any financial year exceed fifty thousand rupees, or services rendered exceed ten thousand pees, an advance tax is to be deducted at the time of asking such payment at the rate specified in the First Schedule to the Ordinance and credit for the tax so deducted in any financial year, is subject to the provisions of Section 53 of the Ordinance, In the instant case, it is contended that in terms of Section 23 of the Co-operative Societies Act, 1925 a Co-operative Society attains the status of a body corporate, which falls within the ambit of the definition of a 'Company' in terms of section 2(16)(b) of the Ordinance, therefore, the finding of the High Court to the contrary is not sustainable in law.
3.Leave is granted to consider the above point. Since a short question of law is involved, these appeals be listed for hearing during the month of April, 2001 at the principal seat, Islamabad. Meanwhile, no case is made out for interim relief.
Judges on this bench
- Irshad Hasan Khan1,063 judgments
- Muhammad Arif291 judgments
- Qazi Muhammad Farooq544 judgments