1999 PLP (Trib (PTD)

Rs.41,101 Salary Rs. 309,000 Rs. 350,101 Less: Zakat Rs. 58,788 Total Income Rs. 291, 313 75 % of total income Rs 218,485 Less: Wealth tax paid Rs. 268,145 Tax payable Nil

6. It was submitted that since wealth tax paid is higher than 75 % of the total income of assessee he was not liable to pay any income-tax. It was urged that the Assessing Officer has misdirected by including income under section 80B and exempt income for the purpose of working out tax relief under Part III of the Second Schedule. It was submitted that the intention of the Legislature is to give tax relief on income subject to flexible/progressive tax rate slab and the income subject to final discharge of tax liability based on fixed tax rate is not entitled for any relief under any provision of the Income Tax Ordinance, 1979, hence it is not required to be included in total income for tax relief. It was further submitted that in parallel cases Department was excluding dividend income and interest income from total income in order to work out tax relief as per provision of Part III of Second Schedule of Income Tax Ordinance, 1979.

7. The learned C.I.T.(A) agreed with the above contentions and directed the Assessing Officer to compute tax relief as per provision of Part III of Second Schedule to the Income Tax Ordinance, 1979 after excluding income covered under section 80B. The learned D.R. has supported the treatment, given by the Assessing Officer. However, when the learned D.R. was pointed out that the income covered under section 80B falls within the presumptive tax regime, and like all other sections dealing with the presumptive tax regime section 80B also starts with the non obstante clause, to the effect that, "notwithstanding anything contained in this Ordinance or in any other law for the time being in force", meaning thereby that when section 80B is applicable the normal provisions contained in the Ordinance are excluded, he was not able to advance any argument to the contrary. He was further pointed out that the total income is assessed under sections 59, 59A, 59B, 62 and 63 of the Income Tax Ordinance and such total income is subject to the charge of tax under section 9 which is the charging section, while in the case of presumptive tax regime neither any total income is assessed under any provision of the Income Tax Ordinance nor it is subject to the charge of tax under section 9 of the Income Tax Ordinance, 1979. He was further pointed out that there is a basic difference in the income covered with the presumptive tax regime and the total income assessed under the general provisions of the Income Tax Ordinance. The difference is that under the general provisions, total income is assessed meaning thereby that after determining the income as defined in section 2(24) of the Income Tax Ordinance from any source derived under any head' specified in section 15, the expenses admissible are allowed and the resulted income is worked out which is termed as "total income" and it includes any other income which is to be included in the total income of an assessee and thereafter tax is levied on this total income under section 9 of the Income Tax Ordinance while in the case of presumptive tax regime the total income is never worked out and the entire amount which is received, accrues or arises or is deemed to accrue or arise to any person is deemed to be "income" of the said person and the tax thereon is charged at the rate specified in the First Schedule. There is no provision in the Income Tax Ordinance by virtue of which this deemed income under the presumptive tax regime is to be included in the total income and, therefore, in addition to the fact that the presumptive tax regime overrides and excludes general provisions contained in the Ordinance, a marked, distinct and obvious departure has been made by the Legislature whereby tax under the presumptive tax regime is levied on the income and not the total income as envisaged under the general', provisions of the Income Tax Ordinance, 1979. As already observed in several other cases by us, every section in the Income Tax Ordinance, 1979 dealing with the presumptive tax regime is a complete code in itself, as for .the purpose of charging tax under any section of the Income Tax Ordinance covering presumptive tax regime no aid is required from any other provision in the Ordinance except those which are referred to in the particular section itself.

8. The learned D. R. is not able to address any arguments to the contrary.

9. For the foregoing reasons we are of the considered opinion that the learned C.I.T.(A) has rightly directed that for working out tax relief under the provisions of Part III of Second Schedule to the Income Tax Ordinance, 1979 the total income should be worked out after excluding income covered under section 80B.

10. The appeal stands dismissed C.M.A./25/Trib. Appeal dismissed