2003 PLP (Trib (PTD)

Zaki Ahmed for Appellant. Naeemullah Siddiqui for Respondent. Date of hearing: 16th November, 2002. MUHAMMAD AKHTAR NAZAR MIAN (ACCOUNTANT MEMBER).

The Department is aggrieved against separate orders of the learned CIT(A) whereunder he vacated the orders passed under section 80D in the case of the Society. The learned CIT(A) has referred to a decision of this Tribunal in a case reported as 1998 PTD (Trib.) 2017 where under it was held that the Societies registered under Society Registration Act, 1980 were not companies and the true status in their case was that of an Artificial Juridical Persons. Since the provisions of section 80D were not applicable to an Artificial Juridical Person, the learned CIT(A) had deleted the demand raised under section 80D in the case of the Society.

2. The learned D.R. while arguing against the decision of the learned CIT(A) has brought in a new concept to the effect that in fact the Societies are A.O.P.'s and not Artificial Juridical Persons as has been held in the case reported as 2000 PTD 3388 and in the case referred therein known as Jalandhar Cooperative Society decided by the Supreme Court of Pakistan. Since A.O.P.'s were liable to tax under section 80D in the assessment year 2000-2001, therefore, the learned D.R. requests that even if it is presumed that this Society is not a body corporate and thus a company, tax under section 80D will still be liable in assessment year 2000-2001 as the said levy was to be charged in the case of A.O.P.'s. The learned A.R. on his turn supports the order of the learned CIT(A).

3. We have given due consideration to the submissions made by the learned D.R. The fact of the matter is that in the case of Jalandhar Cooperative Society the issue before the Hon'ble Supreme Court was with reference to the liability of the Members of the Society for payment of tax in accordance with the amendment made in the definition of "person" in the Income Tax Act, 1922 through the Finance Act, 1939. The definition of "person" had subsequently been amended in the Income Tax Act, 1922 and therefore, the said case is not applicable to the facts of the present case. In the case cited as 2000 PTD 3388 although a passing reference has been made to the case of Jalandhar Cooperative Society yet the issue which the Hon'ble Lahore High Court decided is that a Society is not a body corporate so as to be included in the definition of company. In this very case in the preceding years, the status of Artificial Juridical Person has been assigned to this society. We may explain that no doubt Artificial Juridical Persons like Societies, Companies, Firms are basically A.O.P.'s but once they qualify the condition of their respective registrations, they are to be assigned their specific status i.e. when a firm is registered by Registrar of Firms, this A.O.P. becomes a firm and is not to be assigned the status of A.O.P; a company when so registered under the Companies Ordinance although still an A.O.P. is to be assigned the status of company and not that of an A.O.P. Similarly a society when so registered under the Societies Act, although an A.O.P. is to be assigned the status of an Artificial Juridical Person. We have no doubt in our mind that provisions of section 80D were not extended to an Artificial Juridical Person even through Finance Act, 1999. We therefore, hold that a society being" an Artificial Juridical Person is not liable to the charge of minimum tax under section 80D in any of the assessment years 1999-2000 and 2000-2001.

4. For the reasons discussed above, we conclude that no interference is called for in the order of the learned CIT(A) which is maintained and the departmental appeals being devoid of merits are dismissed. C.M.A./793/Tax (Trib.) Appeal dismissed.