2005 PLP (Trib (PTD)

2. Brief facts leading to this appeal are that the assessee filed return declaring income of Rs.2,52,320 which was also accompanied by statement under section 143B in addition to other allied documents. The case was put to total audit as a result of computer balloting held by the C.B.R. on 27‑2‑2000. On initiation of assessment proceedings, the washing contract of the assessee with Messrs Shifa International Hospital was proposed to be assessed under section 80C and tax deducted therein was proposed as final discharge. The assessee claimed that he is covered within the definition of `services rendered' which was not accepted by the Assessing Officer under the garb of the definition given by the C. B. R. vide Circular No. 11 of 1991, dated 30‑6‑1991 wherein para. (ii) speaks as follows:‑‑ "Services Rendered.‑This includes the services rendered, whether through a contract or otherwise, by professionals such as medical practitioners, legal, practitioners, accountants and consultants, etc." Appeal against the above treatment was filed which remained unfruitful and the CIT(A) dismissed the contention of the assessee by holding as follows:‑‑ "However, I tend to agree with the Assessing Officer as he has rightly observed that appellant does not fall within the category of professionals mentioned in Clause (ii) of Para. 6 of the C.B.R. Circular No. 11 of 1991. Therefore, income was to be assessed under the presumptive tax regime. Accordingly, his action is confirmed."

3. Before me, the AR started reading the relevant provisions from section 80C read with section 50(4) and remarked that the Assessing Officer has taken a very limited view of term `services rendered'. He said that even the definition referred by the Assessing Officer goes to favour his claim in the matter that it is an inclusive definition. The provision has very clearly taken in the services of lawyers, doctors and engineers within the definition of the above connotation but has never said that it shall apply on only such professionals or similar professionals. It has enhanced the scope by using the words 'it includes'. 'Including' within the statute is interpreted as a word of enlargement or of illustrative application as well as a word of limitation. Premier Products Co. v. Cameron, Black's Law Dictionary. Fifth Edition (1979) .

4. This way, all services, be that of any nature, if otherwise are covered by the definition enjoy exemption from charge of the presumptive tax provisions of section 80C.

5. Before proceeding further it will be of help to reproduce section 80C: "80C. Tax on income of certain contractors and importers. ‑‑‑(1) Notwithstanding anything contained ‑in this Ordinance or any other law for the time being in force, where any amount referred to in subsection (2) is received by or accrues or arises or is deemed to accrue or arise to any person the whole of such amount shall be deemed to be income of the said person and tax thereon shall be charged at the rate specified in the First Schedule. (2) The amount referred to in subsection (1) shall be the. Following namely:‑‑ (a) Where the person is a resident,‑‑ (i) the amount representing payments on which tax is deductible under subsection (4) of section 50, other than payments on account of services rendered;" Above provision of law is clear in its application. It says that notwithstanding anything contained in this Ordinance, where the tax has been charged for 'the purpose of this case under section 50(4), the same shall be full and final discharge of the assessee liability. Further, an exception with respect to deduction under section 50(4) has been given to `services rendered'. The C.B.R. has defined the term `services rendered" reproduced by me in the earlier part of this order, by holding that it includes the services of professionals like doctors and engineers. I am in agreement with the learned AR that the definition is not restrictive and it has given a wider meaning to the connotations. There cannot be any cavil about the definition of the words `services rendered' regarding' inclusion of a 'Dhobi' services. For the purpose of giving the wider meaning to the same as is intended by the C.B.R. itself through the above circular. I have no hesitation in mentioning that barber services etc. are also covered within the definition thereof. The words `services rendered' having not been defined in the Income Tax Ordinance, the safe course is to adopt the normal dictionary meaning. Here, I would partly disagree with the learned AR that we can take support from any‑other law. He was referring the definition under the Sales Tax Act which I would like to ignore for the reason that taking help from some other enactment is never safe. Laws are promulgated in respect of each national requirement separately with independent purposes. Although the sales tax is also dealt with by the same machinery, however, I will still refrain getting support for the purpose of definition from the same in respect of income‑tax proceedings. In any case, as already discussed, the C.B.R. by using the words `it includes' does not mean that it is restricting the definition only to the extent of doctors, engineers, lawyers etc. It now applies not only on similar services but also on other services. Services as defined in Black's Law Dictionary, Sixth Edition, are as follows:‑‑ ` "Services. Things purchased by consumers that do not have physical characteristics (e.g., services of doctors, lawyers, dentists, repair personnel)." The above definition describes the services as purchase of such items which are not visible sometimes but then in some cases they can be observed and felt also. In the example again, the services of doctors, lawyers, dentists and repair personnel has been added. This would mean that services include carpenter services, motor mechanic services, engineering services, hiring services, plumber, electrician etc. I do not want to enlarge the scope by mentioning these items and I restrict myself to the issue in hand. But however, going into the discussion above I do not find any reason to agree with the learned DR that only the qualified professionals like doctors, engineers have been provided exception from the charge of section 80D. Neither the law itself nor its further interpretation by the C.B‑.R. has created any such embargo. In this regard. I further find support from the judgment referred by the AR of the assessee reported as 2001 PTD (Trib.) 2969 which says that the intention of Legislature was expressed by unrestricted use of expression `services rendered'. It means that all recipients of payments on which tax is deductible under section 50(4) of the Income Tax Ordinance, 1979 on account of services rendered would fall outside the purview of presumptive tax regime under section 80C of the Income Tax Ordinance, 1979 and tax deducted in their case would not be final discharge of their tax liability. The principle therefore, is the same as discussed by me in the main part of the order earlier.

6. It is also equally relevant to mention here that the word `contract' is a wider connotation and services is only a part of it. All services are a contract but every contract cannot be with regard to providing of service. The, obvious conclusion of the above discussion therefore is that the assessee is very well covered within the definition of the words `services rendered and therefore the assessment of the same under section 80C is not justified. As a result, I hold the assessment to be as illegal and cancel the same and instruct the Assessing Officer to assess the return filed by the assessee under normal law after issuance of a notice under section 61.

7. The assessee's appeal is accordingly allowed in the manner and to the extent as mentioned hereinbefore. C.M.A./322/Tax(Trib.) Appeal accepted.