1990 PLP (Trib (PTD)

SAIYID SAEED ASHHAD, (JUDICIAL MEMBER).‑‑The above 30 appeals have been filed by the Department and the assessees against the orders of the learned AAC of Income‑tax made with regard to the question for determining the total income of the partner including his share in the income, profits and gains of the firm for the purpose of determining the maximum tax liability as envisaged in Proviso (e) to Para. A, Part I of the First Schedule to the Income‑tax Ordinance (hereinafter referred to as "the proviso in dispute"). In the aforesaid orders wherein the C.I.T. (Appeals)/AAC determined total income of the partner without ordering the deduction of the share of super‑tax of the partner, it was the assessee who fell aggrieved and filed the appeal whereas in the orders where the directions were issued for determining the total income after deduction of the share of the partner in the super‑tax, it was the Department which felt aggrieved and preferred the above appeals. As all the appeals filed by the Department as well as by the assessee involved the of interpretation/explanation and/or determination of the principle according to which the total income of the partner is to be calculated for the purpose of determining his maximum tax liability in view of the Second Part of the proviso in dispute, all the aforesaid appeals will be disposed of by this order.

2. In view of the above introduction with regard to the question and the issue involved in the aforesaid appeals it is not necessary to reproduce the facts of each and every appeal. Suffice to say that the assessees in all the aforesaid cases while submitting their returns of income for the aforesaid assessment years had declared their share in the income, profits and gains of the firm in declaring their total income and in declaring their share in the income, profits and gains of the firm they had deducted their respective proportionate share in the super‑tax paid by the firm. In other words, the assessees had declared their income from the profits of the partnership by deducting and/or reducing their proportionate share of the super‑tax from their share according to the profit‑sharing ratio in the income, profits and gains of the firm. While framing assessments the Income‑tax Officers acted differently and some of them held the deduction of the proportionate share in the super‑tax as proper and valid while others considered it to be improper and invalid. The findings of the ITOs on this issue. were challenged by the above parties before the C.I.Ts. (Appeals) /AACs and in majority of the cases the CITs(Appeals)/AACs accepted the plea vehemently advanced by the assessees for calculating their share in the income, profits and gains of the firm while in some of the cases the same was discarded by the CITs(Appeals)/AACs with the result that both the assessees and the Department felt aggrieved and dissatisfied with the aforesaid orders of the CITs(Appeals)/AACs and preferred the aforesaid appeals before this Tribunal.

3. The precise and exact question which requires consideration and determination by this Tribunal is as under:‑‑ "Whether in calculating and determining the total income of a partner including his share in the income, profits and gains of the firm for the purpose of computing his maximum tax liability as per part 2 of the proviso in dispute, the term his share in the income, profits and gains of the firm is to be taken after deduction of his proportionate share in the super‑tax paid by the firm or without deduction thereof?"

4. On behalf of the Department Mr. Abdul Waheed Farooqi, the learned Advocate and their Legal Adviser advanced the leading arguments. He was ably supported by Mi. Nasrullah Awan, also a Legal Adviser of the Department and Messrs Rahat Nasim Malik, A.R. Memon and Aftab Iqbal Rathore, the learned Departmental Representatives. On behalf of the assessees in all 18 earned Advocates, learned FCAs and learned ITPs had appeared. The reading arguments were advanced by Mr. I.N. Pasha, the learned Advocate and all other had adopted the arguments submitted by Mr. I.N. Pasha. In addition to the arguments of Mr. I.N. Pasha, Mr. Siraj‑ul Haq, the learned Advocate, Mr. Faruq Ali the learned FCA, also made their respective submissions in support of the contentions advanced on behalf of the assessees. In addition to the arguments and contentions advanced by the learned representatives of both the parties, they also referred to the various provisions of the Income‑tax Ordinance and the case‑law laid down by the Supreme Court of Pakistan and the High Court of Sindh. Mr Waheed Farooqi, the learned Advocate and the legal adivser of the Department vehemently attacked the finding of the CITs (Appeals) /AACs to the effect that the term his share in the income, profits and gains of the firm as used in the latter part of the proviso in dispute was to be assigned the same meaning as has been assigned to it in section 69(4)(a) of the Income‑tax Ordinance (hereinafter referred to as "the Ordinance") and submitted that the above finding of the learned C.I.T. (Appeals) was not only inconsistent and contrary to the provisions of the Income‑tax Ordinance but also in disregard and contravention of the law laid down by the Supreme Court of Pakistan in the case of Seth Saifuddin Ghulam Hussain and by the High Court of Sindh in the cases of (1) Seth Saifuddin Ghulam Hussain, (2) Solimand Cowasji and (3) D.D. Shroff. He further submitted that the finding of the learned C.I.T. (Appeals) that the term his share of income, profits and gains of the firm as used in the latter part of the proviso in dispute was not to he equated with the definition of the above term appearing in section 69(4)(a) of the Ordinance, in view of the use of the words "for the purposes of this section" and contended that the legislature by inserting the aforesaid words had made its intention very clear that the definition of the share of a partner in the income of any firm provided in section 69(4)(a) was for the purposes embodied and enumerated in section 69 of the Ordinance and not for the purposes embodied and enumerated in the proviso in dispute which were absolutely distinct and different from the provisions contained in section 69 of the Ordinance. In this connection he also submitted that it was a well‑established principle of interpretation of statutes that each and every word used in a statute had to be given a meaning and effect and no word was to be treated as superfluous and the C.I.T. (Appeals) by assigning the definition of the term his share of income, profits and gains of the firm contained in section 69(4)(a) to the said term as used in the proviso in dispute contravened the principle of interpretation of statues and rendered the words "for the purposes of this section" as redundant and superfluous. Mr. Waheed Farooqi then referred to the several judgments of the High Court of Sindh and of the Supreme Court of Pakistan wherein, according to him, the meaning and definition of the term his share of income, profits and gains of firm was examined and considered elaborately and in great detail and a very clear and unambiguous finding was given, according to which the term his share of income, profits and gains in the term was defined to mean the share of the partner according to his profit‑sharing ratio in the income of the firm without deduction of his proportionate share of the super‑tax paid by the firm. He further submitted that in arriving at the aforesaid finding the Supreme Court of Pakistan as well as the High Court of Sindh had categorically and specifically laid down that the term his share of income, profits and gains in the firm for the purpose of determining/calculating the total income of a partner was not to be assigned the same meaning or definition as assigned to the above term in section 69(4)(a) by holding that in determining the partner's share of income, profits and gains of the firm as used in proviso 2 of para. A of Part I of the Schedule to the Finance Ordinance, 1961 (the provisions of which correspond to the proviso in dispute) was not to be assigned the meaning or definition with reference to the provisions of section 16(1)(6) of' the Income‑tax Act, 1922 (hereinafter referred to as "the repealed Act"). To substantiate the above contention and arguments raised by Mr. Waheed Farooqi he placed reliance on the following cases:‑‑ (1) ITR Nos. 90, 91 and 92 of 1969 C.I.T. v. Seth Saifuddin Ghulam Hussain, decided on 28‑3‑1978; (2) C.I.T. v. Soli M. Cowasji and others reported in 1985 PTD 401; (3) D.D. Shroff v. C.I.T. reported in 1988 PTD 147; and (4) Civil Appeals Nos. K‑246 of 1980, 248 to 250‑K of 1980, 251 to 253‑K of 1980, and 291 to 293‑K of 1980, decided by the Supreme Court of Pakistan on 2‑5‑1989. Mr. Waheed Farooqi, the learned Legal Adviser concluding his arguments submitted that from the ratio decidendi laid down in the afore‑cited cases by the Supreme Court of Pakistan and the High Court of Sindh, there was not the slightest doubt with regard to the claim and contention of the Department that in determining the total income of a partner of a registered firm, his share of income, profits and gains of the firm which is required to be added to a partner's income from other source, business, or vocation for determining his total income liable to charge to tax, the proportionate share of the super‑tax of the partner in the super‑tax paid by the firm was not to be excluded and that the maximum tax liability of a partner in view of the proviso in dispute was to be determined by taking the partner's share of income, profits and gains of the firm without deduction of the super‑tax paid by the partner. Mr. Nasrullah Awan, the learned Advocate and also a legal adviser, of the Department adopted the arguments advanced by Mr. Waheed Farooqi and did not make any further or new submissions. Mr. Rahat Nasim Malik, the learned D.R. besides adopting the arguments advanced by Mr. Waheed Farooqi further submitted that in determining the total income of a partner inclusive of his share of income in the profits of the firm his proportionate share in the super‑tax paid by the firm was not to be deducted or excluded in view of very clear and unambiguous directions of the Supreme Court in the judgment delivered in the case of Saifuddin Ghulam Hussain, wherein the High Court held that the Departmental view was entirely based on a restricted and referential meaning to the expression his share by linking it to section 16(1)(b) of the repealed Act. He further submitted that in view of the above, the term "total income" as used in the proviso in dispute for the purpose of providing rebate and/or limiting the income‑tax liability of the partner was not to be assigned the meaning assigned to it in section 16(1)(b) of the repealed Act, corresponding to section 69(e)(a)(I1) of the Ordinance, but was to be given the meaning assigned to it by the supreme Court of Pakistan.

5. Mr. I.N. Pasha, the learned Advocate appearing on behalf of the assessees submitted that the question of defining, interpreting or assigning a meaning to the, partners share of income, profits and gains used in section 16(1)(6) of the repealed Act, which were in pari materia with the provisions of section 69(4)(a) of the Ordinance, was thoroughly examined and considered by this Tribunal in I TAs. Nos. 1839, 2899 and 2900/KB of 1965‑66 Saifuddin Ghulam Hussain v. The Income‑tax Officer, decided on 24‑7‑1967 and by its order a Division Bench of this Tribunal had held that the share of the partner m the income, profits and gains of the firm was to be delermiqed after deducting the partner's proportionate share of the super‑tax paid by the firm from his profit s haring ratio in the profits of the firm and this tribunal had all along been following the above principle of law and for the purpose of determining the maximum income‑tax liability of a partner in view of proviso 2, para. A of Part I of the Schedule to the Finance Ordinance, 1961 the partner's share of income, profits and gains of the firm was always determined/calculated after deduction of his proportionate share of the super‑tax paid by the firm for arriving at his total income on which the maximum tax liability was to be levied. He further submitted that the Department had not accepted the view of the Tribunal and had challenged the same before the High Court of Sindh by way of Income‑tax References being ITRs Nos. 90, 91 and 92 of 1969, which were decided by the High Court on 28‑3‑1978 and after the pronouncement of the above judgment of the High Court of Sindh the Department started disallowing the deduction of the partner's share of the super‑tax from his income derived from the profits of the firm on the ground that the High Court had reversed the finding of the Tribunal and had held that in determining the partner's share of income, profits and gains of the firm the provisions of section 16(1)(b) were not to be resorted to or pressed into action, which defined the partner's share of income, profits and gains of the firm as his share according to his profit‑sharing ratio as reduced by his proportionate share of the super‑tax paid by the firm. Mr. I.N. Pasha submitted that the above view of the Department is absolutely misleading and based on a patently wrong and mischievous meaning and interpretation of the judgment of the High Court of Sindh in the above three Income‑tax References and the fact was that the High Court of Sind in the afore‑cited three reterences was never faced with the above question and that the High Court in deciding the issue of Dartner's proportionate share in the super‑tax had held that reference was not to be had to the provisions of sect‑ion 16(1)(b) which corresponded to section 69(4)(a) of the Ordinance, and according to which the partner's share of income, profits and gains in the profits of the firm was to be determined. He further submitted that the High Court in the above judgment nowhere held that for the purpose of determining the maximum tax liability of a partner in view of the provisions of proviso 2, para. A of Part I of the Schedule of the Finance Ordinance, 1961, which corresponded to the provisions of the proviso in dispute, reference was not to be had to the provisions of section 16(1)(b) of the repealed Act, corresponding to the provisions of section 69(4)(a) of the Ordinance. Mr. I.N. Pasha then took up the case of Soli M. Cowasji, reported in 1985 PTD 401, and submitted that in that case also the High Court was faced with the question of determination of partner's share in the super‑tax paid by the firm and the question of determining the total income of the partner or interpreting or explaining the term his share of income, profits and gains of the firm was not at all considered. He further submitted that the Departmental view that the meaning and interpretation of the words his share of income, profits and gains of the firm was explained and defined by the High Court in the aforecited two cases was based on an entirely wrong understanding and application of the judgment of the High Court of Sindh and the Departmental view was absolutely frivolous and as the question in dispute was neither considered nor decided by the High Court and in support of his above contention he placed reliance on another case of the High Court of Sindh, namely, C.I.T. v. Muhammad Sadiq reported in 1986 PTD 42, wherein also the question for consideration by the High Court was the mode of determination of proportionate share of the super‑tax attributable to each partner in the super‑tax paid by the firm and in deciding the issue before it, the High Court had relied on the judgments delivered in the cases of Saifuddin Ghulam Hussain and Soli M Cowasji. Mr. 1.N. Pasha, thereafter proceeded to examine the judgment of the High Court of Sindh in the case of D.D. Shroff v. Income‑tax Officer, reported in 1988 PTD 147, and submitted that in that case the High Court was faced with the question as to whether an Income‑tax Officer in exercise of the powers of rectification of an order conferred by section 156 of the Income‑tax Ordinance on the Tax Officers could issue a notice for re‑opening of an assessment which was finalized by him in pursuance and directions of the C.I.T. (Appeals) on the plea that the order of the C.I.T. (Appeals) was not lawful and in accordance with the provisions of the Ordinance and in deciding the above question the High Court made a passing reference to the manner and mode in which partner's share of income, profits and gains of the firm was to be determined. He further submitted that the High Court had not given a finding but had merely expressed an opinion with regard to the question in dispute and was not in the nature of ratio decidendi of the case and was merely an obiter dicta inasmuch as the High Court in deciding the above case was not required to decide the above issue. He further submitted that an obiter dicta of the High Court or an opinion expressed by the High Court which was not in issue before it in respect of issues or questions which were not directly involved in the case before it could not be deemed to be law laid down by the High Court. Mr. I.N. Pasha in support of his above contention that an obiter dicta of the High Court was not binding as it was not in the nature of laying down a law referred us to the discussion on page 190 of A.K. Brohi's Fundamental Law of Pakistan which deals with the definition of obiter dicta and the authority and sanctity which can be attached to the same. Mr. I.N. Pasha further submitted that in deciding a reference under the Income‑tax Ordinance, the High Court derives its powers from section 136 of the Income‑tax Ordinance, according to which the High Court had to confine itself to the question referred to it and the authority and power of the High Court in exercise of its powers and jurisdiction under section 136 of the Ordinance, did not extend to deciding questions or giving finding on issues and disputes not referred to it. In support of his above contention Mr. I.N. Pasha placed reliance on the cases reported:‑‑ (i) (1961) 4 Tax 103 (ii) 1984 PTD 364, and (iii) (1960) Tax Supplement

305. Mr. I.N. Pasha drew the attention of this Tribunal to the fact that in the case of Saifuddin Ghulam Hussain and Soli M. Cowasji the ITO in finalising the assessment and computing the maximum income‑tax liablility of the assessees had determined the total income of the assessees/paners inclusive of their share in the income, profits and gains of the firm after deducting the super‑tax attributable to the assessees/partners in the super‑tax paid by the firm and that in opinion of the above cases either the High Court of Sindh or the Supreme Court of Pakistan could disturb, modify, reverse car set aside the above finding of the ITO which was upheld and confirmed at the stage of the C.I.T. (Appeals) and the Tribunal. Mr. Pasha referring to the judgment of the Supreme Court in Civil Appeals Nos. 251 to 253‑K of 1980 decided on 2‑5‑1989 submitted that the Supreme Court nowhere in its judgment held that the method adopted by the ITO for determining the partner's share of income in the income, profits and gains of the firm which was confirmed by the C.I.T. (Appeals) and this Tribunal was not the correct and proper method of laying down any method or formula for determining the partner's share in the income, profits and gains of the firm and from the above it is absolutely clear that the Supreme Court had impliedly upheld, confirmed and approved the method of determining the partner's share in the income, profits and gains of the firm and the Department was unnecessarily raising and agitating this issue for the purpose of harassing the assessees and to generate greater revenue. He prayed that clear directions be issued to the Tax Officers in respect of the method for determining the partner's share in the income, profits and gains of the firm in view of the judgment of the Supreme Court of Pakistan in Civil Appeals Nos. 251 to 253‑K of 1980, decided on 2‑5‑1989, and the case of Messrs Younus Brothers reported in (1983) 48 Tax 192.

6. Mr. Waheed Farooqi, the learned Legal Adviser of the Department vehemently controverted the above arguments of Mr. I.N. Pasha and submitted that according to the provisions of the Constitution a judgment of the High Court was entitled to greatest respect and was to be followed by the subordinate Courts even if it merely expressed an opinion or made an observation on any particular issue and even an obiter dicta of the High Court would be binding on the subordinate Courts. He further submitted that the principle that an opinion expressed by the High Court or an obiter dicta of the High Court was not binding and was not to be followed was with regard to the Benches of the High Court inter se and that an obiter dicta of a Division Bench of a High Court would not be binding on another Division Bench of the High Court but a subordinate Court would not refuse to follow an observation made or an opinion expressed by the High Court. In support of his above arguments and contentions he placed reliance on Article 201 of the Constitution of the Islamic Republic of Pakistan, 1973.

7. Reverting to the arguments and contentions of Mr. I.N. Pasha he made further reference to the judgment of the Supreme Court in Civil Appeals Nos. 251 to 253‑K of 1980‑‑Commissioner of Income‑tax v. Seth Saiduddin Ghulam Hussain, decided on 2‑5‑1989 and submitted that the Department had filed the above appeals against the judgment of the High Court of Sindh, delivered in ITRs. Nos. 90, 91 and 92 of 1969. He further submitted that the issue decided by the High Court of Sindh in the aforesaid references was with regard to the determination of partners' share attributable to them in the super‑tax paid by the firm but in deciding the above question the Supreme Court also adverted to consider the question with regard to the meaning and definition of the term "total income" as used in section 16(1)(b) of the repealed Act, corresponding to section 69(1)(a) of the Ordinance. He further submitted that the Supreme Court in the aforecited appeals had made clear distinction with regard to the mode and the manner of determination of the share of the partners attributable to them in the super‑tax paid by the firm and the share of the partners in the income, profits and gains of the firm and had held that while in determining the partner's share in the super‑tax paid by the firm the provisions of section 16(1)(b) of the repealed Act corresponding to section 69(4)(a) of the Ordinance were not to be made applicable and the same was to be calculated in the same proportion as the share of a partner in the total income of the firm whereas the expression "total income" had a definition in the Act and was assigned a definite meaning. He further submitted that since the Supreme Court had held that "total income" in relation to the partners of a firm has been specifically defined and given a definite and specific meaning then according to the principles of interpretation of statutes it would follow that the term "total income" wherever appearing in any other provision or section of the Ordinance was to be assigned the same definition and meaning if the different provisions or sections of the Ordinance dealt with the same issues or the subject‑matter as were dealt with by section 69 of the Ordinance. In view of his above contentions and arguments he submitted that the term "total income" used in the proviso in dispute was to be assigned the same definition and meaning as was assigned to it in section 69(1)(a)(ii) read with section 69(4)(a) of the Ordinance, and for the purpose of providing rebate or limiting the income‑tax liability of a partner the "total income" of a partner would be inclusive of his share of income, profits and gains of the firm as reduced by his proportionate share in the super‑tax paid by the firm. In view of the above he submitted that no ambiguity or doubt with regard to the meaning and definition of the term partner's share in the income, profits and gains of the firm could be entertained or allowed to assessee after the wording of the Supreme Court of Pakistan in its judgment dated 2‑5‑1989 in the aforesaid appeals and that the Departmental view and its insistence on interpretation and definition of the term his share in the income, profits and gains to be partner's proportionate share without deduction of his proportionate share in the super‑tax paid by the firm was not at all warranted and was absolutely frivolous and baseless. Mr. Sirajul Haq, the learned Advocate appearing on behalf of one of the above assessees while adopting the arguments of Mr. I.N. Pasha advanced certain arguments of his own. He submitted that the question of deciding the partner's share in the income, profits and gains of the firm besides having been decided by the Supreme Court of Pakistan in Civil Appeals Nos. 251 to 253‑K of 1980 had already been decided by a Division Bench of the High Court of Sindh in the case of C.I.T. v. Younus Brothers reported in 1983 PTD

389. In this connection he submitted that in the reference made to the High Court under section 66 of the repealed Act the question referred to the High Court was with regard to the benefit and/or deduction of export rebate available to the assessee but in deciding the above question the High Court also took into consideration and examination the above issue. Mr. Sirajul‑Haq further submitted that the High Court had reproduced Circular Letter No. 3 (67) I.T‑1/72 dated 7‑5‑1973 issued by the C.B.R. which amongst other questions and issues had also laid down the method of determining the total income of the partner for the purpose of determining his maximum tax liability and according to the method laid down therein a partner's share in the income, profits and gains of the firm was to be arrived at or determined after deduction of the super‑tax and the High Court after reproducing the entire circular including the portion dealing with the mode of determination of partner's share in the income, profits and gains of the firm had observed that the method laid down by the C.B.R. was the correct method. He submitted that, thus the High Court in that case had decided and settled the above issue which has been approved and re‑affirmed by the Supreme Court and all other cases, nemely, those of Seth Saifuddin Ghulam Hussain, Soli M. Cowasji, Mohammad Sadiq and D.D. Shroff are of no advantage and use for the purpose of deciding the issue in dispute as none of them dealt with the issue or question in dispute and the observations of the High Court of Sindh in the case of D.D. Shroff v. C.I.T. was an expression of opinion on a question not involved and was in the nature of obiter dicta which was not binding. He prayed that clear directions be issued to the Tax Officers in respect of the method for determining the partner's share in the income, profits and gains of the firm in view of the judgment of the Supreme Court of Pakistan in Civil Appeals Nos. 251 to 253‑K of 1980 decided on 2‑5‑1989 and the case of M/s. Younus Brothers reported in 1983 PTD 389.

8. Mr. Faruq Ali, the learned FCA appearing on behalf of one of the assessees produced a copy of order of a Division Bench of Islamabad Bench of this Tribunal which was faced with the consideration and examination of the above question in dispute and vide its order dated 10‑7‑1989 had decided the issue in accordance with the law laid down by the Supreme Court of Pakistan in the aforecited appeals and directed that computation of tax should be made m the manner as ordered by the Supreme Court of Pakistan.

9. The lengthy and elaborate arguments of the learned representatives of the parties have been considered and examined in detail, record has been perused and the case‑law relied upon by the learned representatives for the parties in support of their respective contentions have been thoroughly examined and considered.

10. The question, which requires determination in the above case is as to the method or the manner of determination of the share of the partner m the income, profits and gains of the firm of which he is a partner for the purpose of determining his maximum tax liability in view of the proviso in dispute. As the question relates to the interpretation/consideration of the proviso in dispute, it will be useful to reproduce the same, which is as under: "(e) where the total income includes any income from a share of the income, profits and gains of a firm to which paragraph C of Part II applies, such portion of the super‑tax payable under the said paragraph as bears to the total amount of such super‑tax the same .proportion as his share of income, profits and gains of the firm bears to the total income of the firm shall be added to the income‑tax payable by such partner under this paragraph and, if the sum so arrived at exceeds forty‑five percent. of the total income of such partner (including his share of income, profits and gains of the firm), the amount of income‑tax payable by him under this paragraph shall be reduced by the amount of such excess."

11. From perusal of the proviso in dispute it is to be found that it deals with two eventualities. Firstly, that where the total income of a partner of the firm is inclusive of his share in the income, profits and gains of the firm then his proportionate share in the super‑tax paid by the firm shall be added to the income‑tax payable by such partner on the income accruing from other sources so as to determine his maximum income‑tax liability. Secondly, that if the total of the income‑tax and the proportionate share in the super‑tax exceeds 45% of the total income of such partner (including his share in the income, profits and gains of the firm) then the amount of total income‑tax payable by the partner is to be reduced by the amount of such excess. It is the second eventuality, which is under consideration in the above case and requires adjudication. The Departmental contention that the term his share in income, profits and gains of the firm appearing in the proviso in dispute is not to be assigned or given the same meaning as given to the above term in section 69(4)(a) of the Ordinance is supposedly based on the judgment of the High Court in the case of Saifuddin Ghulam Hussain. The Department's plea is that the High Court in the aforesaid judgment had held that in determining partner's share in income, profits and gains of the firm under the proviso in dispute no reference or reliance is to be placed on the provisions of section 69(4)(a) of the Income‑tax Ordinance, and, therefore, the meaning of the term partner's share in the income, profits and gains of the firm appearing in the proviso in dispute is not to be the same as defined in section 69(4)(a) of the Income‑tax Ordinance, which in other words means that in determining the partner's share under the proviso in dispute proportionate share of the super‑tax of the partner in the super‑tax payable by the firm is not to be deducted from his proportionate share in the total income of the firm. However, from a careful perusal and examination of the judgment of the High Court m Saifuddin Ghulam Hussain's case, it is to be observed that the arguments advanced by the learned A.R. to the effect that the question decided by the High Court was not with regard to the manner or mode of determining the partner's share in the income, profits and gains of the firm and what the High Court had actually decided in that case was the manner in which the partner's proportionate share in the super‑tax payable by the firm was to be determined and/or calculated carry weight. It will be useful to reproduce the relevant portion of the judgment of the High. Court delivered in the case of Saifuddin Ghulam Hussain, which is as under:‑‑ " I am, therefore, in agreement with the view expressed by the Appellate Tribunal that the partner's share of super‑tax payable by registered firm under the proviso is not to be apportioned with reference to the share of the partner as computed under section 16(1)(b):' From perusal of the above operative portion of the judgment it is absolutely clear that the High Court had laid down the principle or the manner in which the partner's share in the super‑tax payable by the firm was to be determined and the same was not to be determined in accordance with the provisions of section 16(1)(b) of the repealed Income‑tax Act, which correspond to the provisions section 69(4)(a) of the Income‑tax Ordinance. If any doubt is to be entertained with regard to the definite or specific question or issue decided by the High Court in the above case, the same stands removed by the judgments of the High Court in the cases of: (i) Commissioner of Income‑tax (Investigations) v. Soli M. Cowasji, reported in 1985 PTD 401; and (ii) Commissioner of Income‑tax East Zone v. Muhammad Sadiq, reported in (1986) PTD 42, wherein the question for consideration before the High Curt was the determination of the proportionate share of the super‑tax attributable to each partner in the super‑tax payable by the firm and the High Court in deciding the issue before them relied on the earlier judgment of the High Court, C.I.T. (Central) v. Seth Saifuddin Ghulam Hussain. It will be useful to reproduce the relevant portion from the judgment of Soli M. Cowasji, appearing in para. 9 on page 410, which is as under: "We are in respectful agreement with the view of the aforesaid Division Bench in the above unreported judgment dated 22‑3‑1978, Commissioner of Income‑tax (Central), Karachi v. Seth Saifuddin Ghulam Hussain that section 16(1)(b) of the Act has no relevancy for the purpose of computing a partner's share of super‑tax but the same is ascertained on the basis of a partner's share in the profit in the firm concerned which has paid super‑tax."

12. Similarly, the High Court in deciding the issue of share of partner in the super‑tax in the case of Muhammad Sadiq reported in 1986 PTD 42, placed reliance on the cases of Seth Saifuddin Ghulam Hussain and Soli M. Cowasji and made the following observations with regard to the judgments in the above two cases:‑‑ "We also find no reason to differ with the decision in the said case."

13. From perusal of the portions and passages reproduced from the judgments of the High Court of Sindh in the cases of Saifuddin Ghulam Hussain, Soli M. Cowasjee and Muhammad Sadiq there cannot be any doubt with regard to the fact that the High Court in deciding the above cases had not considered and examined the question with regard to the mode or the principle of determining the partner's share in the income, profits and gains of the firm and the sole issue or the dispute involved in all the afore‑cited cases was the question of determining or deciding the method or the mode of partner's share in the super‑tax payable by the firm. In the circumstances, the contention raised on behalf of the Department that the question in dispute stood decided by the High Court of Sindh vide its judgments in the cases of Saifuddin Ghulam Hussain, and Soli M. Cowasjee is not tenable and the contention of the learned A.Rs. of the assessees that this issue or the point was not at all considered in the aforesaid judgment is correct. As regards the case of M/s. Younus Brothers, it is to be observed that in that case also the primary question involved for consideration by the High Court was with regard to the relief to be provided to 'the assessee in respect of export rebate but in deciding the above question the High Court had reproduced in its judgment Circular No. 3(67)IT‑1/72 dated 7‑5‑1973. In this Circular the formula or the method for calculating the share of the partner in the income, profits and gains of the firm was embodied according to which the partner's share was to be determined after deduction of the proportionate share of the super‑tax paid by the partner out of the profits derived by him from the registered firm and ‑after reproducing the above Circular, the High Court observed that the method laid down by the Central Board of Revenue in the aforecited Circular for calculating the partner's share in the income, profits and gains of the firm after deduction of their respective proportionate shares in the super‑tax paid. by the firm was the correct method. Thus, in the above case the question in issue was not directly and specifically considered and decided but in deciding another issue the point in issue was considered and a finding was given with regard to the same which was in accordance with the contentions raised and the claims made on behalf of the assessees. It will be appropriate to reproduce the relevant portion from the judgment of Younus Brothers relating to the issue in dispute, which is as under:‑‑ "The above circular fully supports the view taken by the Tribunal which we also find in accord with the law. We may here also refer to another case I.T.R. No. 112 of 1973 decided by another Bench of this Court on 15‑11‑1982 (of which one of us Mr. Justice Saecdu77aman Siddiqui was a member). In that case a similar question was referred to the Court for decision but the learned counsel for the department did not press that reference in view of the instructions issued by the C.B.R. which are reproduced above." The greatest emphasis by Mr. I.N. Pasha and all other learned Advocates/Representatives appearing on behalf of the assessees for acceptance of their c6ntention that the term "total income" and his share in the income, profits and gains of the firm has to be assigned the same meaning and definition as assigned to the above two terms in section 69 of the Ordinance was laid on the judgment of the Supreme Court in Civil Appeals Nos. 251 to 253‑K of 1980 C.I.T., East Zone v. Seth Saifuddin Ghulam Hussain, decided on 2‑9‑1985. From perusal of the judgment of the Supreme Court it is to be found that the Supreme Court while considering and examining the question which was decided by the High Court of Sindh, that is, determination of the partner's share in the super‑tax paid by the firm, had also adverted to consider and examine the question of the mode or the method for determining the partner's share in the income, profits and gains of the firm and had laid down that the aforesaid two questions were absolutely distinct and apart from one another and the same could not be decided by adopting a single method or formula. The above conclusion can be had from perusal of the illustration and/or working example appearing on page 6 of the certified copy of the judgment of the Supreme Court, which illustration or working example is with regard to the share attributable to the partner in the super‑tax paid by the firm and not for determining the partner's share in the income, profits and gains of the firm and the Supreme Court rejected the mode of calculation of partner's share of super‑tax put forward by the Department which was to be done according to the percentage of partner's share bearing to the total income of the firm before deduction of the super‑tax and held that the share of super‑tax allowable to the partner was to be in the same proportion as was his share in the total income. Thus, the question of deduction or non-deduction of the super‑tax from the share of the partner in the income, profits and gains of the firm was considered by the Supreme Court for the purpose of determining the partner's share in the super‑tax paid by the firm and not for the purpose of determining his share in the income, profits and gains of the firm. The above observation or inference is based on the finding of the Supreme Court which is reproduced as under:‑‑ "The share of the super‑tax allowable to the partner is to be in the same proportion as his share in the total income. The share of the partner in this context has not the artificial restricted and purposive meaning as is in clause (b) of subsection (1) of section 16 of the. Act." It is thus to be seen that by using the words "in this context" the Supreme Court had held that the above provision was with regard to the determination or calculation of the share attributable to the partner in the super‑tax paid by the firm and that for this purpose no reference was to be had to section 16(1)(b) of the repealed Act, which provision corresponded to section 69(4)(a) of the Ordinance. By using the words, "in this context" and laying down that the expression total income had definition and had bean given a meaning in the Act, the Supreme Court neither held nor prevent d the interpretation of the term his share in the income, profits and gains of the firm in accordance with or with reference to the meaning or definition of the word his share in the profits of the firm. given in section 16(1)(b) of the repealed Act. Above two provisions correspond to the provisions of the proviso in dispute and section 61)(4)(a) of the Ordinance.

14. Another very important factor which can be relied upon for coming to the conclusion that the Supreme Court had upheld and confirmed the views of the assessees that the terms "total income" and "his share in the income, profits and gains" as used in the Second Part of the proviso in dispute were to be assigned and given the same meaning and definition as was assigned to them in section 69(1)(a)(ii) and section 69(4)(a) of the Ordinance respectively was the non‑interference and refusal of the High . Court of Sindh as well as of the Supreme Court to question or to set aside the assessments made by the Income tax Officer in the case of Saifuddin Ghulam Hussain. The ITO in calculating or determining his share in the income, profits and gains of the firm had deducted his proportionate share in the super‑lax paid by the firm and this method of calculating the share of income, profits and gains was upheld and confirmed by the C.I.T. (Appeals) as well as by this Tribunal. The High Court of Sindh and the Supreme Court by not taking into consideration and examining the above mode and in not discarding and/or rejecting the above method or the formula for calculation of his share in the income, profits and gains of the firm impliedly upheld and confirmed the, above method and formula and it is now not open to any criticism, consideration, examination and adjudication as it stands finally decided by the highest Courts of the country. In view of the above, the contention of Mr. Waheed Farooqi, the learned Legal Adviser of the Department that the High Court of Sindh in the case of DD. Shroff had decided the issue, according to which the partner's proportionate share of the super‑tax paid by the firm was not to be deducted in determining the partner's share of income in the profits and gains of the firm is devoid of force inasmuch as the above view or expression of the High Court of Sindh is contradictory and in conflict with the verdict of the Supreme Court of Pakistan and cannot be followed and relied upon.

15. In view of the law laid down by the Supreme Court in Civil Appeals Nos. 251 to 253‑K of 1980, decided on 2‑5‑1989, it is to be followed that the term or phrase "total income" used in proviso 2, paragraph A of Part I of the Third Schedule to the Finance Ordinance was to be assigned the meaning and definition as assigned to it in the interpretation clause in section 2(15) of the repealed Act. In the repealed Act, the‑word or term "total income" was defined only in the interpretation/definition clause and no other definition of the said term of phrase was provided therein. However, in the Ordinance, the word/term "total income" besides having been defined in the definition/interpretation clause in section 2(44) of the Ordinance, has also been defined with special reference to the income and assessment of a partner of a registered firm. The definition is contained in section 69(1)(a)(ii) of the Ordinance, which is as under:‑‑ "

69. Assessment of firms and partners: ‑

(1) (a) in the case of a registered firm; (i) .. . (ii) the total income of each partner of the firm, including therein his share of its income, profits and gains of the income year shall be assessed and the sum payable by him on the basis of such assessment shall be determined;" From a bare perusal of the above provision of the Ordinance it is absolutely clear that the total income of partner of a firm consists of his income from all other sources including his share of income/profit in the profits and gains of the firm. The Ordinance further goes on to define partner's share of income in the profits and gains of the firm in section 69(4) of the Ordinance, which is reproduced as under: (4) For the purpose of this section, the share of a partner in the income of any firm means the aggregate of‑‑ (a) the proportionate share in the total income of the firm as reduced by the tax, if any, payable by the firm and any sum referred to in clause (b); and (b) any salary, brokerage, interest or commission receivable by the partner from the firm:" Reading together the above two provisions of the Ordinance, there can be no doubt or ambiguity as to the question with regard to the total income of a partner of the firm and the, same is the aggregate of all the incomes earned by a partner' from other sources plus his income/profit in the profits and gains of the firm which is to be determined and calculated after deduction of his proportionate share in the super‑tax paid by the firm. The words "total income" and "his share in; the income, profits and gains of the firm" used in the proviso in dispute will have to be assigned the same meaning as are assigned to them in sections 69(1)(a)(ii) and 69(4)(a) of the Ordinance, inasmuch as both section 69 and the proviso in dispute relate to and deal with the same subject‑matter and questions, that is, assessment and computation of tax liability of partner of a registered firm.

16. An objection was advanced on behalf of the Department that the word/term "total income" was defined in the Ordinance in section 2(44) and the definition given therein neither mentioned the partner's share in the income, profits and gains of the firm nor mentioned about deduction of his proportionate share in the super‑tax paid by the firm from his share of income. It was further argued that if the meaning/definition of the word/phrase "total income" as used in the proviso in dispute was assigned the meaning as contained in section 69(1)(a)(ii) of the Ordinance then the definition ‑given in section 2(44) of the Ordinance will be rendered redundant and superfluous which cannot be attributed to the legislature. This contention is devoid of force. In section 2(44) of the Ordinance: a general definition of "total income" of an assessee has been provided whereas section 69(1)(a)(ii) of the Ordinance gives the definition and meaning of the word "total income" with special reference to the income of a partner of a registered firm. Section 69 of the Ordinance contains special provision relating to computation and determination of the total income and the income‑tax liability. According to the principles of interpretation of statutes where an enactment or a statute contains a special provision with reference to or in respect of any particular subject‑matter or issue then those provisions will over‑ride the general provisions of the statute or the enactment while dealing with that particular subject‑matter or issues. In support of the above, reliance is placed on the case of The State v: Zia‑ur‑Rahman and others, reported in PLD 1973 Supreme Court page

49. In view of the above, there will be no question of redundancy of any provision. If the ordnance and the definition of the word/phrase "total income" in section 2(44) of the Ordinance will not be rendered superfluous or unnecessary in placing reliance on the definition of the word "total income" contained in section 6k)(1)(a)(ii) for the: purpose of proviso in dispute.

17. Another ground which was very strongly agitated against assigning or application of the definition/meaning of the words and terms "total income" and "his share in the income, profits and gains of the firm" as contained in, section 69(1)(a)(ii) and section 69(4)(a) of the Ordinance respectively was that the above definitions and meanings were exclusively for the purpose of section 69 of the Ordinance, and could not be made applicable to any other section or provision wherein the above words or phrases were used or appeared. In support of the above objection reliance was placed by the Departmental Representatives on the opening words of subsection (4) of section 69 of the Ordinance, which read as under:‑‑ "For the purpose of this section,"‑‑ and it was argued that by using the above words the legislature had made it very, clear that the contents of section 69(4)(a) which defined or explained the term "his share iii the income, profits and gains of the firm" was for the purpose oft section 69 only and for no other section or provision of the Ordinance. In order to, appreciate the objection, it will be necessary to see as to what is the purpose and object of section 69 of the Ordinance, and the proviso in dispute. The object and purpose of section 69 of the Ordinance as is evident from its heading is the assessment of firms and partners. The word "assessment" has been defined with reference to income‑tax matters in Stroud's Judicial Dictionary, 4th Edition, Vol. I on page 201 to mean the fixing of the sum taken to represent the actual profit for the purpose of charging tax upon it as well as the actual sum in tax which the tax‑payer is liable to pay on his profits. Black's Law Dictionary, 5th Edition on page 107 defines assessment as determination of the share of a tax to be paid by each of many persons, or an apportioning of the entire tax to be levied among the different taxable persons and establishing the proportion due from each. It further explains it as fixation of the liability of the tax‑payer. A glance of the above meanings and definitions of the word "assessment" reveals that it means and includes fixation and determination of the income and profits for the purpose of charging tax; the actual sum of tax which a tax‑payer will be liable to pay on his income or profits: the mode‑or the method of charge of tax; determination of the share of a tax to be paid by each person; and fixing of the liability of the tax‑payer. A reading of the proviso in dispute with reference to the above meaning and definition of the word "assessment" leaves no room for doubt that the contents or the subject‑matter of the proviso are similar and analogous to the contents of section 69(4) of the Ordinance and that the proviso in dispute deals with the determination of the share of total income to be paid by a partner, fixation or determination of his share of profit/income out of the profits and gains of the firm and reducing or limiting his tax liability to a certain extent in cases where the total income‑tax payable by him exceeds his total income. Since the provisions of section 69 of the Ordinance and the proviso in dispute are analogous and similar and deal with or are related to the same, subject‑matter and issues then the words/phrases "total income" and "his share in, the income, profits and gains" as used .in the proviso in dispute will have to be assigned one and the same meaning or definition as assigned to them in section 69 in view of the well‑established principle of interpretation of statutes, according to which where a term or phrase has been defined or assigned a definite meaning or definition in a section of statute then the same meaning/definition is to be assigned to that word or phrase wherever it re‑occurs in any other section or provision of the statute where it is in consonance and fits in with the subject and context of the latter section or the provision. Had the two above provisions been in different context or not inter‑related with each other and the contents thereof would not have been analogous and similar then the objection raised on behalf of the Department would have carried weight and would be tenable, but in the present case when the two provisions are inter‑related and deal with the same subject‑matter and issue and the definitions of the terms "total income" and "his share in the income, profits and gains of the firm" enumerated in section 69 of the Ordinance, fit in with the subject or context of the proviso in dispute the above contention of the Department is devoid of force and is discarded. For the above, conclusion reliance is placed on the cases decided by the Supreme Court of Pakistan, namely: (1) Bank of Bahawalpur v. Chief Settlement and Rehabilitation Commission, reported in PLD 1977 Supreme Court 164; and (2) Iftikhar Ahmed and others v. President, National Bank of Pakistan and others reported in PLD 1988 Supreme Court

53. It will be appropriate to reproduce the relevant portion from the judgment of the Supreme Court in the case of Iftikhar Ahmed and others v. National Bank of Pakistan and others which is as under:‑‑ "Apart from that, as held by this Court in Bank of Bahawalpur v. Chief Settlement and Rehabilitation Commissioner PLD 1977 Supreme Court 164, that although normally an expression if defined in a statute has to be given the same meaning wherever it occurs therein, yet there is ample authority for the principle of interpretation that a definition of a term in a statute is merely declaratory in nature and should not be unnecessarily inflicted where it does not fit in with the subject or context." As already discussed above, the definitions of "total income and "his share in the income, profits and gains" enumerated in section 69 fit in with the context or subject of the proviso in dispute and, there is no reason as to why the words "total income" and "his share in the income, profits and gains" occurring in the proviso in dispute should not he assigned the same definition or meaning. In view of the above, this argument is also any‑ substance and is not tenable. 18, From the above discussion, there cannot be an iota of doubt as to the definition or meaning which is to he given or assigned to the words/phrases "total' income" and "his share in the income, profits and gains of the firm" occurring in! the proviso in dispute and that both the above words arc to he given 'the same meaning as assigned to them in section 69(1)(a)(ii) and section 69(4) of the Ordinance, respectively. In view of the above finding, the order of the learned; C.I.T. (Appeals) whereby directions were issued for calculating and determining the total income of a partner by including his share: in the profits and gains of the J firm after deduction of his proportionate share in the super‑tax paid by the firm were in accordance, with the provisions of law and they do not require any interference. Orders of the CITs (Appeals) whereby they directed that the? proportionate share of the partner in the super‑tax paid by the firm was not to bet deducted for arriving at his share of income/profit from the profits and gains of the firm for calculating his total income are contrary to the provisions of law anal cannot he sustained. In view of the above, all the Departmental appeals challenging the orders of the C.I.T. (Appeals) whereby deduction of proportionate share of super‑tax was allowed in determining partner's share/profit in the profits and gains of the firm being without any force stand rejected and the orders of the C.I.T. (Appeals) arc conformed. The appeals filed by the assessees against the orders of the C.I.Ts. (Appeals) whereby they disallowed the proportionate share of the partner in the K super‑tax paid by the firm in arriving at partner's share/income in the profits and. gains of the firm arc allowed. The orders of the learned C.I.Ts. (Appeals) in ITA. No. 1348/ KB of 1985‑86 and of the AAC in ITA No. 4502/KB of 1986‑87 are set aside and the cases arc remanded to the I.T:O. for deciding the same in accordance with the above finding. (SAIYID SAEED ASHHAD) JUDICIAL MEMBER, (MANZUR‑UL‑HAQUE) ACCOUNTANT MEMBER.

20. ALVI ABDUL RAHIM (ACCOUNTANT MEMBER).‑‑‑I have carefully studied the order proposed by my learned brother, the Judicial Member. With due respect I beg to differ with the findings. For various reasons, to be discussed in detail in later part of my order, I am of the view that the ceiling on tax liability as provided by clause (c) of the proviso to paragraph A of Part I of the First Schedule to the Income Tax Ordinance, 1979 (hereinafter referred to as the "said proviso") is to be calculated with reference to the total income of a partner including that amount of share received from a registered ‑firm which is arrived at before deducting the proportionate amount of super‑tax levied on the firm. In other words the provision‑ of section 69(4) of the income Tax Ordinance, to be ignored while determining the quantum of a partner's share for the purpose of calculating benefit of. ceiling on maximum tax liability as provided by the said proviso. But income‑tax liability of a partner is to be calculated by' following the provisions of section 69(4). There is no dispute among the tax payers and the department about determination of income‑tax liability of a partner. Both of them agree that it is to be determined on the basis‑ of a partner's share computed in the manner given in section 69(4) and the Income‑tax rates given by Paragraph A of Part I of the Schedule. After the amount of income‑tax payable is determined, in this manner, sometimes an adjustment has to be made for relief available under proviso (c) to paragraph A. As a matter of fact this relief cannot be calculated unless the amount ' of income‑tax liability is determined. After amount of income‑tax is determined by following the provisions of section 69(4) a part of super‑tax levied on the firm. is to be added to it. If sum total of the two amounts is more than 45%, relief is to be given. As will be explained in later part of this order this relief is for super‑tax because Income tax liability calculated by following provisions of section 69(4) is always less than 45%p of a partner's total income. The dispute among the parties to these appeals is about calculation of the relief available under the proviso. The reasons. in support of my opinion, in brief, areas under: (i) The issue before us has already been decided by the honourable Sindh High Court and the honourable Supreme Court in the case of Seth Saifuddin Ghulam Hussain. This was done at the time of adjudicating a closely linked issue of apportioning total amount of super‑tax among the partners for the purpose of implementing provision; of the said proviso. (ii) The issue has also been decided by the Hon'able Sindh High Court 'in the D.D. Shroff s case 1988 PTD 147 (Karachi High Court) ‑‑ in connection with an appeal pertaining to an issue which is identical with the issue in appeals before us; vii. determination of a partner hare in the profits of a firm for the purpose of calculating ceiling on the maximum tax liability as provided by the said proviso. (iii) The provisions of section 69(4) of the Income Tax Ordinance, 1979 are;' not attracted for the purposes of the said proviso. They are applicable for' the purposes of section 69, as is very clearly stated at the beginning of) subsection (4) of section

69. The purpose of the said proviso is differen6 from the purposes of section 69. (iv) The tax liability of a partner, which is the subject‑matter of the said proviso, comprises of two liabilities, vii. liability in respect of tax payable by the partner and; secondly, super‑tax liability imposed on the firm. It is fair and reasonable, to calculate the ceiling limit on the maximum tax liability on that amount of a partner's share on which super‑tax as well as 1 income‑tax is charged. (t will not be logical to calculate the ceiling with reference to that amount of Snare of income on which only income‑tax is levied.

21. Before commencing examination of the issue in various appeals before ,is it will be helpful for our understanding if I reproduce the provisions of the said proviso, as it is applicable to assessment years 1986‑87 and onwards. For assessment years 1979‑8t) and 1985‑86 the proviso was similar except for the change. in the ceiling limit. The ceiling limit for those years was 60% while it is 45% for assessment nears 1986‑87 and onwards: ...Provided that‑‑ . .. .. (e) where the total income includes any income from a share of the income, profits and gains of a firm to which paragraph C of Part II applies, such portion of the super‑tax payable under the said paragraph as bears to the total amount of such super‑tax the same proportion as his share of income profits and gains of the firm bears to the total income of the firm shall be added to the income‑tax payable by such partner under this paragraph and, if the sum so arrived at exceeds forty‑five percent. of the total income of such partner including his share of income profits and gains of the Firm, the amount of income‑tax payable by him under this paragraph shall be reduced by the amount of such excess." The phrase "as his share of the income, profits and gains of a firm" has been used at three different places in the said proviso. These words are used in the beginning of the said proviso to lay down its scope. The said proviso applies to cases where income earned by a person includes share of income from a firm, which is registered under section 68 of the Income Tax Ordinance, 1979. The; same set of words have been used in the middle of the proviso to lay down the manner in which super‑tax levied on a registered firm is to be apportioned among different partners for the purpose of giving then credit for super‑tax levied on the registered firm. This credit is to be given to calculate the ceiling on tax liability contained in the said proviso. And the same set of words have been used at the third and last place of the same sentence to describe, the manner in which a partner's share is to be computed for the purpose of calculating the amount of ceiling on tax liability. In appeals before us we are faced with interpretation of the set of words as used to describe manner of calculating maximum tax liability on the basis of a partner's share income.

22. Now I take up the first set of arguments in support of my opinion that the matter before us in these 29 appeals stands decided in the Seth Saifuddin Ghulam Hussain s case even though the issue in that case was apportionment of super‑tax, paid by the firm, among the partners for the purposes of giving them credit. This credit is to be given for calculating benefit of maximum tax liability contained in the said proviso. This benefit is given because a partner pays income‑tax on his income, including his share income, and also bears proportionate burden of super‑tax levied on the firm, in which he is a partner. The dispute between the two litigants in the Seth Saifuddin Ghulam Hussain's case was: how to calculate a partner's share in the income, profits and gains of a firm. This in turn had its effect on apportionment of super‑tax among the partners. When the matter reached this Tribunal it was held that super‑tax is to be apportioned for the purposes of the said proviso by adopting that figure of a partner's share which is calculated by ignoring the provisions of section 16(1)(b). The Commissioner of Income‑tax, who was not satisfied with this decision, wanted this Tribunal to refer the matter to the High Court. On our refusal, the Commissioner filed a direct reference. Though the honourable Court accepted the direct reference for hearing, it did not take up the question of law as proposed by the Commissioner: It is mentioned in para. 6 of the High Court decision that the question of law was re‑framed. Before giving the decision and the reasons in support of the decision the learned Judges summed up the issue and stand of the two sides as under: ...The formula for calculating the portion of the super‑tax of a partner under the said paragraph may conveniently be represented thus: Portion of the total amount of His share of the income, super‑tax payable by the firm. profits and gains of the firm.

Total income of the firm The controversy in question relates to the numerator in the aforesaid ‑fraction, viz. his share of the INCOME PROFITS and gains of the firm According to the respondent's contention, which found favour with the Appellate Tribunal, the partner's share of the profits of the firm is to be taken to be the amount of his share before deduction of super‑tax payable by the firm, whereas the contention of Mr. Mansoor Ahmed Khan for the Department is that it should be taken to be the amount after deduction of super‑tax payable by the firm. Learned counsel relied on section 16(1)(b) of the Act, which provides that in computing the total income of an assessee, who is a partner of a firm, his share of net profit is to be determined after deducting the super‑tax payable by the firm."

24. The question of law which was framed by the learned Judges is reproduced below: "...Whether on the facts and circumstances of the case, the computation of tax by the Tribunal for Pur of the proviso (ii) of para. A of Part I of the Schedule to the relevant Finance Act, without regard to the provisions of section 16(1)(b) of the Act, is according to law?" This question was answered in the affirmative. In other words it was held that computation of tax for the facility of maximum lax liability contained in the said proviso is to be made without regard to the provisions of section 16(1)(b). The reasons in support of this finding are contained in para. 9 of the decision. I quote relevant part as under: " ....In my opinion, section 16(1)(b) is not relevant, because that subsection lays down the mode of computing the quantum of a partner's share in the profit (or loss) of the firm, whether registered or unregistered for the purpose of determining the rate of income‑tax applicable to his taxable income; whereas, the subject‑matter of the proviso under consideration, is the computing of the maximum limit of the income‑tax payable by a person who is a partner of a registered firm, which is to be determined by adding a proportionate portion of the super‑tax to the income‑tax payable by such partner under the paragraph and the question of rebate of an amount of income‑tax, if the sum so added exceeds 75% of the total income of such partner..."

25. Before parting with the facts of the Seth Saifuddin Ghulam Hussain's case and the decision in that case we should note that the dispute in that case was about interpretation of the words‑‑ ‑‑a partner's share in the income, profits and gains of a firm. There was no dispute about quantification of the amount of super‑tax or the determination of firm's assessed income. The learned Judges have held that a partner's share in firm's income should be calculated by ignoring provisions of section 16(1)(b) at the time when benefits given by the said proviso are to be determined. In the appeals before us the corresponding provisions are contained in section 69(4) of the Income Tax Ordinance, 1979 as per the ratio decidendi in the Seth Saifuddin Ghulam Hussain's case the provisions of section 69(4) are to be ignored at the time when benefits contained in the said proviso are to be determined.

26. During the course of hearing Mr. Pasha, the learned counsel for the assessees, submitted that inadvertently the learned Judges have given a finding about operation of the entire proviso whereas the issue before them pertained to apportionment of super‑tax, which forms a part of that proviso. We have already seen that the facility contained in the said proviso can be quantified by making two calculations viz. apportionment of super‑tax among the partners, and calculation of ceiling on the maximum tax liability comprising of income‑tax and super‑tax. Continuing his arguments he stated that the issue of calculating maximum tax liability was not before them; therefore, they should not have given a finding respect of the entire proviso. This argument of Mr. Pasha is not convincing. It is my considered opinion that the learned Judges of the High Court have deliberately talked about the entire proviso. We have already noticed that it is a small proviso. Secondly, the same set of word have been used in the middle and at the end of the said proviso. In the middle they are used m connection with apportionment of super‑tax while at the end they are used in connection with calculation of ceiling on maximum tax liability. The same set of words used at two places in the same sentence cannot be assigned two different meanings unless the legislature makes its intention known in very clear words. And lastly, the purpose of the entire proviso is one and the same, viz. to put a ceiling on the maximum tax liability of a partner who pays income‑tax on his income including a share from firm's income and also bears burden of a part of super‑tax levied on the firm. Apportionment of super‑tax is only a step towards achieving of the actual benefit. Mere apportionment of super‑tax among the partners gives no facility to a partner. The facility is given after both the steps are completed viz. super‑tax is apportioned on the basis of amount of a partner's share in firm's income and the ceiling on maximum tax liability is worked out, again on the basis of amount of a partner's share in firm's income. As already examined by me the reason for the decision of the Honourable High Court is contained in para 9 of the order. The reason, in brief, is that the purposes of section i6(1)(b) and the purpose of the said proviso are different. The said proviso is one composite whole; therefore, interpretation of the phrase "a partner's share in firm's income" given by the Honourable High Court is valid ''or apportionment of super‑tax as well as calculation of ceiling on maximum tax liability". Therefore, I hold the view that the learned Judges have deliberately given a decision in respect of the entire proviso because apportionment of super‑tax is only a step to the attainment of actual purpose of the said proviso viz. putting a ceiling on the maximum tax liability.

27. When the issue was referred to the Honourable Supreme Court by the Commissioner of Income‑tax it was decided as under: " ....The share of the super‑tax allowable to the partner is to be in the same proportion as is his share in the total income. The share of the partner has in this context not the artificial, restricted and purposive meaning as is given in clause (b) of subsection (1) of section 16 of the Act ...." There is no doubt that the decision by the learned Judges of the Supreme Judicial body is in respect of apportionment of super‑tax. This is because it was this precise issue which was in dispute. While deciding this matter they have given the same finding as was given by the Honourable High Court. Though the learned Judges of the Supreme Court have noted that the question of law was framed by the High Court they have not questioned its validity. Similarly, they have not expressed any contrary views about the purposes of the said proviso and the purposes of section 16(1)(b). Even if it is argued that the Honourable Supreme Court has not expressly endorsed every part of the order passed by the Honourable High Court there is no doubt that the views expressed by the learned Judges of the High Court do deserve our respect in view of the fact that the Honourable Supreme Court has not changed the decision of the Honourable

28. While the Seth Saifuddin Ghulam Hussain's case involves issue of apportionment of super‑tax, levied on a firm among its partners for the purposes f the said proviso the D.D. Shroffs case 1988 PTD 147 (Karachi High Court) deals with calculation of ceiling of the maximum tax liability as provided in the said proviso. Thus tire issue in that case is similar to the issue in various appeals before us. The facts of D.D. Shroffs case arc as follows: The ITO calculated maximum tax liability of a partner by considering the amount of his income calculated before deducting super‑tax there from. In other words he did not compute a partner's share income in the manner described in section 69(4) of the Income Tax Ordinance, 1979. On appeal, made by the tax‑payer, the learned C.I.T. (A) directed the ITO to calculate partner's share in the manner given by section 69(4). The ITO implemented directions of the appellate authority. However, thereafter he issued a notice under section 156 of the Ordinance to rectify the order as, according to him, the order so amended in the light of appellate order, suffered from an apparent mistake. The apparent mistake, according to the ITO, is that a judgment of the High Court (viz. Seth Saifuddin Ghulam Hussain's case) was wrongly construed by the appellate Commissioner. When notice under section 156 was served on the assessee he filed a Constitutional petition before the Honourable Sindh High Court. The learned Chief Justice who wrote 'the judgment, held that the ITO could not invoke provisions of section

156. The following passage from the order sums up the finding: "...In our view, the ITO cannot nullify the order of the appellate authority in disguise of a notice under section 156 of the Ordinance. If we were to condone the above act, there would be a chaos as it would be open to an ITO to undo even an order of the Income‑tax Appellate Tribunal. Even if the view of the Commissioner was erroneous, the proper course for the department was to have filed an appeal before the Income‑tax Tribunal and then a reference before the High Court but it cannot be undone by invoking section 156 of the Ordinance..."' Though the Constitutional petition was decided in the above‑mentioned manner, the Honourable High Court gave its opinion about the mariner in which a partner's share is to be calculated for the purposes of the said proviso. According to the learned Judges which computing income of a partner, including his share income, for the purpose of determining ceiling on the maximum tax liability the provisions of section 69(4) of the Income Tax Ordinance, 1979 are to be ignored. But where the benefit of the said proviso is not claimed the share of partner is to be computed in terms of provisions of section 69(4). Para. 6 of the order is quoted below: "...In our view, the above proviso (ii) of Part I of the Third Schedule to the Income‑tax Act of which corresponding provision is contained in proviso (e) to para. A of Part I of the 1st Schedule to the Ordinance was intended to give relief to the assessees, who were partners in Registered Firms, which were liable to pay super‑tax. It was decidendi to reduce the liability of such partners to a maximum limit provided for in the above "provision which has been explained in the above‑quoted observations of the Division Bench in the case of Commissioner of Income‑tax v. Soli M. Cowasjee i.e. while computing the income of partner with reference to the above proviso (ii) of Part I of Third, Schedule to t‑he Income‑tax Act, the provisions of section 16(1)(h) of the Act which correspond to section 69(4) of the Ordinance were not to be taken into consideration, where the benefit of the above proviso is not to be claimed the income of a partner is to be computed in terms of section 16(1)(b) of the Act or in terms of section 69(4) of the Ordinance without including the proportionate share of the super‑tax debited in the account of the partner with reference to his profit sharing capacity ...."

29. At the time of hearing of appeals before us Mr. Iqbal Naeem Pasha, the learned counsel for some of the assessees, argued that the above‑quoted passage is only an obiter dicta and not the ratio decidendi. To explain distinction between these two terms he relied on page (0) of Mr. A.K. Brohi's Fundamental Law of Pakistan (1958 Edition published by Din Mohammad Press, Karachi). It is quoted as under: "Now to determine the ratio decided of a case we would, to begin with, notice some of the important definitions that have been offered by prominent English Jurists, of terms like ratio decided and obiter dicta with a view to discovering the rules by resort to which the binding authority of a judicial precedent anal its application to the facts of a given case could be determined: (1) The underlying principles of a judicial decision, says Stephen in his Commentaries on the Laws of England, Vo1.I, p.11, which forms its authoritative element for the future, is termed ratio decidendi. It is contrasted with an obiter dictum, or that part of judgment which consists of the expression of the Judge's opinion on a point of law which is not directly raised by the issue between the litigants. Obiter dicta are often valuable, though not binding, statements of the law. (2) Sir John Salmond in his Jurisprudence says (at p. 191): "A precedent therefore, is a judicial decision which contains in itself a principle. The, underlying principle, which thus forms its authoritative element is often termed the ratio decidendi. The concrete decision is binding between the parties to it but it is the abstract ratio decidendi, which alone has the force of‑law as regards the world at large. (3) So also Professor Chipman Gray says in his book 'Nature and the Sources of Law,' about a judicial precedent: "It must he observed that at common law not every opinion expressed by a Judge forms a judicial precedent. In order that an opinion may have the weight of a precedent, two things must concur: it must be, in the first place, an opinion given by a Judge, and in the second place, it must be an opinion the formation of which is necessary for the decision of a particular case; in other words, it must not be obiter dictum." (4) Similarly, Professor C.K. Allen, in his book `Law in the Making' says. "Any judgment of any Court is authoritative only as to that part of it, called the ratio decidendi, which is considered to have been necessary to the decision of the actual issue between the litigants. It is for the Court, of whatever degree, which is called upon to consider the precedent, to determine what the true ratio decidendi was." In the light of the above we have to see the extent to which the views expressed in para. 6 of the D.D. Shroff's case have binding force. Before we examine the views expressed in para. 6 we may sec the scope of section 156, which was invoked by the ITO to modify the assessment order. Section 156(1) is reproduced below: "

156. Rectification of mistakes‑‑

(1) Any income‑tax authority or the Appellate Tribunal may amend any order passed by it to rectify any mistake apparent from the record on its own motion or on such mistake being brought to its notice by any other income‑tax authority or by the assessee " The provisions of section 156 are attracted if two conditions are fulfilled. They are: (i) An order suffers from a mistake. (ii) The mistake from which it suffers is apparent from record. Until and unless we decide whether there is any mistake, and the nature of that mistake we cannot decide whether provisions of section 156 are attracted in a particular case. First of all we have to see from what mistake the order suffers. Then we have to see if the mistake is apparent or floating on surface or it is hidden beneath facts and complicated questions of law which need probing. In the D.D. Shroffs case this very exercise had to be undertaken by the learned Judges. They had to see the nature of mistake, and then to decide if it was a mistake, which was apparent from record. In other words the issue, before the learned Judges could not be decided until and unless the nature of mistake was looked into. For this reason we cannot say that the learned Judges did not give any serious thought to the manner of calculating maximum tax liability as laid down by the said proviso. Now we see how do the views expressed in para. 6 of the D.D. Shroff s case stand the test laid down in the quotation from Mr. Brohi's book. He has quoted different authorities on this subject including Stephen who says an obiter dictum is that part of a judgment which consists of the expression of a Judge's opinion on a point of law which is not directs raised by the issue between the litigants. We have noticed that the issue in D.D. Sharoff's case could not be decided unless the nature of mistake was .analysed to see if the mistake floats on the surface or not. For this reason the manner of calculating maximum tax liability was directly raised before the learned Judges. Now we examine the matter in the light of views of Prof. Gray quoted by Mr. Brohi. Prof. Gray says that an opinion will have weight of a precedent if two conditions are fulfilled: (i) It must be given by a Judge, and (ii) It must be an opinion the formation of which is necessary for the decision of a particular case. We have already noticed the nature of opinion contained in para. 6 of the D.D. Shroff's case. It is quite clear that if fulfils both the conditions laid down by Prof Gray. It is, therefore, my considered view that the opinion expressed in para. 6 of the D.D. Shroff's case has binding force. In any case it carries lot of weight because it is the result of close examination of the issue of calculation of maximum tax liability provided by the said proviso and perusal of case‑law on the subject.

30. So far I have stated that the issue before us in these 29 appeals stands decided by the Seth Saifuddin Ghulam Hussain's case and the D.D. Shroff's case. Now I take up the provisions of section 69(4) and those of the said proviso and see to what extent and in what manner they arc attracted in these appeals. The said proviso has used the words "a partner's share of income, profits and gains of firm" without specifically defining them for its purposes. The two possible definitions are those which are submitted for our consideration, by the two parties before us. The assessees want to calculate a partner's share in firm's income in the manner given in section 69(4) because this section gives definition of a "partner's share". On the other hand, the Income‑tax Department pleads for calculation of a partner's share on the basis of assessed income of the firm and partner's profit‑sharing ratio because according to the counsel for the department, the provisions of section 69(4) are to be ignored while calculating ceiling on maximum tax liability mentioned in the said proviso. In other words the assessees want to adopt after‑tax share income while the Department is in favour of before‑tax share. The reasons are quite obvious. The before‑tax share will push up the ceiling to the disadvantage of a tax‑payer while the after‑tax share will bring down the ceiling to his benefit. We have to look at the provisions of section 69(4) to see if the definition contained therein is to be adopted at the time of implementing the provisions of the said proviso. Section 69(4) is reproduced as under: "

69. Assessment of firms and partners.‑

.. ... (4) For the purposes of this section, the share of partner in the income of any firm means the aggregate of‑‑ (a) The proportionate share in the total income of the firm as reduced by the tax, if any, payable by the firm and any sum referred to in clause (b); and (b) Any salary, brokerage, interest or commission receivable by the partner from the firm. A striking feature of subsection (4) is that the definition contained therein into be adopted for the purposes of section 69 only. The proviso to paragraph A of Part 1 of the First Schedule which is under. our consideration, is not a part of section

69. As a matter of fact the First Schedule has been enacted to calculate tax imposed by sections 9, 10 and 50 of the. Income‑tax Ordinance. This fact is not only apparent from these sections but also from the title of the First Schedule. Sections 9 and 10 as well as the title of the. First Schedule are reproduced below: "

9. Charge of income‑tax.‑‑‑

(1) Subject to the provisions of, this Ordinance, there shall be charged, levied and paid for each assessment year commencing on or after the first day of .July, 1979, income‑tax in respect of the total income of the income year or years, as the case may be, of every person at the; rate: or rates specified in the Fire Schedule ...... . . . "

10. Charge of super‑tax and surcharge

‑‑(I) In addition to the Income tax charged for any year, there shall be charged, levied and paid for that year in respect of the total income or any part thereof, of the income year or income years, as the case may be, of very per on, an additional duty of income tax (in this Ordinance referred to as super‑tax) and surcharge at the rate or rates specified in the Firs. Schedule: "THE FIRST SCHEDULE (Sec sections 9, 10 and 50)" Section 50 is not reproduced, as it is not relevant for our purposes. It deals with deduction of tax at source.

31. It is abundantly clear that the said proviso dealing with the benefit of ceiling on maximum tax liability, does not form a part of section fig nor has it been framed in pursuance of provisions of section

69. Thus the definition given by section 69(4) is not to be adopted for the purposes of the said proviso. Now let us see what are the purposes of section 69 for which we have to adopt the definition contained in subsection (4) of this section. Later on we will examine the purpose of the said proviso. This will enable us to see if the purpose of the said proviso is the same as the purpose of section 69 or not. If the purposes are similar we have to adopt the definition given by section 69(4). In case the purposes are different we have td accept the stand of the Income‑tax Department. The words "a, partner's share in firm's income" have been used at six different places in section

69. They are in sub-clauses (ii), (iii) and (iv) of clause (a) of subsection (1) and m clauses (a), (b) and (c) of subsection (3). All of them ate reproduced below: "

69. Assessment of firms and partners.‑‑

(1) Notwithstanding anything contained in this Ordinance; where the assessee is a firm and the total income of the firm has been determined or assessed under sections 59, 59‑A, 60, 62, 63 and 65, as the case may be, ‑‑‑

(i) .............................................................................. : (ii) the total income of each partner of the firm, including therein his share of its income, profits and gains of the income year shall be assessed and the sum payable by him on the basis of such assessment shall be determined; (iii) if such share of any partner is a loss, it shall be set off against his other income or carried forward and set‑off in accordance with the provisions of sections 31, 35, 36, 37 and 38; (iv) where any of such partners is a non‑resident, his share of the income, profits and gains of the firm shall be assessed on the firm at the rates which would be applicable if it were assessed on him personally, and the sum so determined as payable shall be paid by the firm;

(3) Notwithstanding anything contained in subsection (1) of this section or subsection (4) of section 83, there shall be included in the total income of an assessee, being a partner in a firm,‑‑ (a) share income of the spouse or a minor child of the assessee from the firm in which the assessee is a partner: and (b) share income of the spouse of the assessee from a firm in which the assessee is not a partner unless the capital contribution, in any form, of the spouse in such firm is not provided, directly or indirectly, by the assessee or unless such capital contribution is derived from a gift to the spouse from the assessee in respect of which gift‑tax, if any, payable under the rift Tax Act, 1963 (XIV of 1963), has been paid; and (c) share income of a minor child of the assessee from a firm in which the assessee is not a partner unless the capital contribution in any form, of the minor child in such firm is derived from a gift from the assessee in respect of which gift tax, if any, payable under the Gift Tax Act, 1963 (XIV of 1963), has been paid;" A close look at all these provisions gives us the gist of each provision, which is as follows: each partner's total income, including his share from firm's income, is to be Assessed by the ITO and the partner is to be asked to pay tax on the income so assessed. On the income so assessed a partner has to pay income‑tax; super‑tax is not payable on the assessed income of any individual. As a matter of fact super- tax is payable only by a firm, a limited company, and by a local authority. Of course, another firm or a company can also be a partner in a firm. But a firm and a company do not attract the provisions of the said proviso. The said proviso applies only in the case of an individual partner; and an individual partner is not liable to pay any super‑tax on his income. A plain reading of various parts of section 69 makes it very clear that the definition given by section 69(4) is to be adopted when a partner's share is to be computed for charging income‑tax thereon. On the other hand the purpose of the said proviso is different. This fine distinction in the nature of purposes of section 16(1)(h) and of the said proviso was noticed by the learned Judges in the Seth Saifuddin (Ghulam Hussain's case discussed in earlier part of my order.

32. What is the purpose of the said proviso? This proviso forms a part of Paragraph A of Part I of the First Schedule. Paragraph deals with calculation of income‑tax liability of an individual. It may, therefore, appear that it deals with income‑tax liability of a partner. This may be the distant purpose of the said proviso as every provision of the Income‑tax Ordinance has its bearing on tax liability. But we are concerned with the immediate purpose of the said proviso. The immediate purp9se of the said proviso is one, which will not be achieved if the said proviso is omitted from the statute book. In this sense the purpose is to: give some credit to some partners of a firm for super‑tax imposed on that firm. This is apparent if we look at the Income‑tax Rates Table, which is given in para. . A of Part I of the First Schedule i.e. the same para. whose proviso (e) is under our consideration. The Rate Table is reproduced below:‑‑ PART I RATES OF INCOME‑TAX A. In the case of every individual, unregistered firm, an association of persons, Hindu undivided family and every artificial juridical person referred to in clause (32) of section 2, not being a case to which paragraph B of this Part applies:‑‑ Rate

1. Where the taxable income does not exceed Rs. 25,000 5 per cent of the taxable income. 2.Where the taxable income Exceeds Rs. 25,000 but does not exceed Rs. 50,000 Rs.1,250 plus 15 per cent of the amount exceeding Rs. 25,000, 3.Where the taxable income exceeds Rs. 100,000 but does not exceed Rs. 200,000 Rs. 5.000 plus 25 per cent of the amount exceeding Rs:50,000. 4.Where the taxable income exceeds Rs. 100,000 but does not exceed Rs.200,000: ‑ Rs. 17,500 plus 35 percent. Of the amount exceeding Rs. 100,000 5.Where the taxable income exceeds Rs. 200,000 Rs. 52,500 plus 45 per cent of the amount exceeding Rs,. 200,000 The Table lays down that no individual, whether a partner, in any firm or otherwise, will pay on his income exceeding Rs. 2 lakhs any income‑tax at a rate higher than 45%. On income up to Rs. 2 lakhs he pays income‑tax amounting to Rs. 52,

500. This is 26.25% of Rs. 2 lakhs. But on any income exceeding Rs. lakhs the additional income‑tax will be at a flat rate of 45%. The basic principle of mathematics tells us that the income‑tax liability on any amount of income, as high as possible, will always he less than 45%. It will never be equal to or more than 45%. For example income‑tax on income of Rs. 5 lakhs will be calculated as under: On the first Rs. 2 lakhs: Rs. 52,500 On the next Rs.3 lakhs: Rs.1,35,000 Rs. 1,87,500 This income‑tax liability is equal to 37,5%, of income amounting to Rs. 5 lakhs. Two conclusions are drawn from this dicussion: (i) The ceiling on maximum income‑lax is laid down by the Income‑tax Rate Table given in para. A of Part 1 of the First Schedule. (ii) The income‑tax liability of an individual partner will always be less than the ceiling given in the said proviso, under our consideration. Thus, the said proviso gives relief to an individual partner‑ for something other than the. Income‑tax levied on the individual partner. It cannot give any relief for the income‑tax liability because under no circumstances the income‑tax liability will be equal to of exceed the ceiling of maximum tax liability mentioned in the said, proviso i.e. 45%. Thus the said proviso gives relief for a tax ‑other than income‑tax bi apart of super‑tux proportionate to a partner's share. Of course, credit is not given for the full amount of super‑.tax imposed on the firm. A restricted credit is giver, in the manner described by the said proviso. A restricted credit is given by calculating the ceiling on total liability, which. Comprises of income-tax liability and the super‑tax liability. Because, of the peculiar manner of giving restricted credit for super‑tax, this facility is not available to every partner of a firm, but to those partners who either earn substantial amount of share income from firms or whose income from sources other than share income is large enough to place them in the high income brackets. The partners who do not fulfil any one of these conditions in any year do not get any credit whatsoever for the super‑tai imposed on the firm. The point worth noting here is that the purpose of the said proviso is to give some credit to some of the partners for the super‑tax imposed on the firm. It may be noted here that the credit for super‑tax is not given by refunding a part of the super‑tax but by adjusting the credit against the income‑tax liability. This manner of giving credit is adopted because a part of a super‑tax levied on the firm cannot be refunded to give the relief envisaged by the said proviso. A refund can be issued in the name of the firm because as per provisions of section 96 of the Ordinance a refund can be‑issued to that person only who has paid the tax. If it is issued in the name of the firm every partner will get a share in it, though every partner may not be entitled to the relief available under the same proviso. For similar reasons credit cannot be given to a firm for relief available under the said proviso to one or a few partners. Thus the method of adjusting the relief. available under the said proviso, against income‑tax liability of the concerned partner has been adopted.

33. Paragraph A of Part I of the First Schedule has given individual partner two different facilities in respect of his maximum tax liability. The first applies to income‑tax liability; while the second is in respect of super‑tax imposed on the firm. The first facility is in the form of highest marginal tax rate. As per the Income Rate Table reproduced in para. 32 of this order the income‑tax liability of an individual, whether partner in any firth or otherwise, on. income exceeding Rs. 2 lakhs will not be more than 45 % of any amount of income in excess of Rs. 2 lakhs. The Second maximum tax facility is provided by clause (e) of the proviso to paragraph A. But this later facility is available to an individual who is a partner in any firm and earns substantial income in a year. This facility is in respect of super‑tax imposed on the firm. And it is for this reason that the learned Judges have stated in the Seth Saifuddin Ghulam Hussain's case that the purpose of section .16(1)(b) and the purpose of the proviso are different. This has been said in, spite; of the fact that the said proviso finds its, place in that part of the First Schedule, which deals with income‑tax liability. The relevant part of para 9 has been reproduced in para. 24 of this Order.

34. There is another way of locking at ‑the purpose of the said proviso. The said proviso. contains one‑composite facility which can be availed‑ after making calculations. in two. steps: The first step involves apportionment of super‑tax among the partners. The second step is about the manner in which some credit is W to be given in cases where the total burden of income‑tax and super‑tax liabilities exceeds the ceiling limit mentioned in the said proviso. The proviso will not serve any purpose if we stop at the first step only. It is the second step which ‑provides the actual relief. As the proviso contains one facility only its purpose is also one and the same. In view of this we can say that the purpose of the said proviso, as explained in the Seth Saifuddin's case (viz. para. 9 of the order), is the purpose of the entire proviso and not the purpose of apportionment of super‑tax among the partners. If the purpose of the said proviso is what is explained in para 9 of the order of the Honourable High Court it is definitely different from the purposes for which the term "a partner's share in firm's income" is defined by section 69(4). The definition in section 69(4) is for the purpose of section 69 only; therefore, we cannot adopt this definition for purposes other than those of section 69.

35. After examining the issue in appeals before us in the light of Seth Saifuddin's case, the D.D. Shroffs case and in the light of purposes of provisions of section 69(4) and of the provisions of said proviso I may also add that it is fair and reasonable to calculate maximum tax liability ceiling with reference to that amount of a partner's share on which super‑tax as well as income‑tax is calculated because the facility of ceiling on maximum tax liability is in respect of income‑tax as well as the proportionate amount of super‑tax burden on a partner. This point may be clarified through a simple illustration: Assessed income of the Firm Rs. 100,000 Less: Super‑tax paid by the Firm Rs. 14,000 After‑tax income Rs. 86,000 ALLOCATION OF AFTER‑TAX INCOME AMONG THE PARTNERS Mr. A. Rs. 43,000 Mr. B. Rs. 43,000 Rs.86.000 Income‑tax on Rs. 43,000 amounts to Rs. 1,

000. Therefore, total tax liability of each partner is as under: Income‑tax on 43,000 Super‑tax paid by Rs. 1,000 Rs. 1,000 the Firm Rs. 7.000 Rs. 7.000 Rs.8,000 Rs.8,000 Now the question is: On what income Mr. A has paid tax of Rs. 8,000 ? Did he pay it on Rs. 43,000 or on Rs. 50,000? This illustration clearly shows that tax amounting to Rs. 1,000 was paid on Rs. 43,

000. The total tax liability of Rs. 8,000 arose on the sum of Rs. 50, 000 and not on amount of Rs. 43;

000. The answer to our question is that total tax liability, comprising of income‑tax and proportionate super‑tax was attracted on Rs. 50,1100. If the total tax liability was attracted on Rs. 50,000 any ceiling on such tax liability of Mr. A has to be calculated with reference to Rs. 50,000. 36, Now It take up the two other cases, on the subject, which were cited at Bar. One of them is the Younus Brothers' case 1983 PTD

389. The issue in this case was: calculation of super‑tax payable by a firm which enjoys export rebate. The assessing officer calculated share income of a partner, for the purposes of section 16(1)(.b) as under: Firm's income Less: Super‑tax on 34,204 Rs. 1,78,863 Less: Export rebate 2(3,878), Rs. 10,339 Divisible income Rs. 1,64,528 the tax‑payer's point of view was as under: Firm's income Rs. 1,78,863 Less: Super‑tax. Rs. 34,204 Divisible income Rs.1,44,659 the Honourable Court has held that the I.T.O. had erred. However, there is no discussion in the order, as to what is the share income of a partner for the purpose of calculating maximum tax liability of a partner. One illustration given in CBR Circular has been held to be correct. This illustration contains calculation of divisible income. It also contains calculation of maximum tax liability. The learned Judges have held the illustration to be correct. This finding is in respect of the issue before the learned Judges viz the effect of export rebate on the divisible income. We cannot presume that the pronouncement of correctness will apply to those elements of the illustration, which were neither argued before the learned Judges nor were commented upon by them. Now a word or two about the C.B.R. Circular in which the illustration appeared, The illustration was given in. Circular C. No. 3 (67) IT‑172, dated 7th May, 1973. The illustration contained in this and other related circulars could not properly convey the intended instructions and thus gave rise to confusion. Later on Circular 13 of 1982, dated 23rd August, 1982 was issued by C.B.R. to set at rest the controversy. Paras. 3 and 4 of Circular 13 of 1982 are quoted below: "

3. It appears that Circular Letter No. 3(67)ITI /72, dated 20th March, 1979 and of even number dated 27th April, 1982 have not been interpreted in their correct perspective as is evident from the following:

4. The Circular letter dated 20th March, 1979, dealt with two issues: (a) Determination of divisible income of partners in case of a registered firm enjoying export rebate, and (b) Treatment of super‑tax payable by a registered firm in case where the proviso prescribing maximum limit of tax in case of partners is applicable." The Circular went on to explain the position of CBR on both these issues. The CBR explained in para. 5 of the Circular that the partner will get credit for notional super‑tax paid by the firm because the firm was not required to pay super‑tax as its exports rebate is more than its super‑tax liability. Regarding the calculation of maximum tax liability the circular said that the same is to be calculated by disregarding the provisions of section 69(4) as was held in the Seth Saifuddin's case.

37. In the Soli M. Cowasjee's case 1985 PTD 401 the issue pertained to allocation of super‑tax among partners. Another related issue was: Can a part of super‑tax levied on the firm be refunded to a partner whose income‑tax liability on his total income, including share from firm's profit, is less than the super‑tax proportionate to his share. The learned Judges have held that credit for super‑tax levied on the firm should be given to the partner on the basis of assessed income of the firm and profit‑sharing ratio and by ignoring the provisions of section 16(1)(b). As a matter of fact on the issue of meaning of "a partner's share in firm's income" the learned, fudges followed the decision in the Seth Saifuddin's case.

38. After examination of the cases cited al Bar I may add that in these cases except D.D. Shroff's case the dispute arose about apportionment of super‑tax but there was no dispute about calculation of ceiling on liability. This is because the ITO adopted the before‑tax amount of share income for the purposes of‑‑ ‑‑apportioning super‑tax among partners, and also for ‑‑ calculating the ceiling limit. The adoption of this figure was to the: disadvantage of the assessees in so far as apportionment of super‑tax was concerned. But this very figure of share income was to the advantage of assesses in so far as calculation of ceiling limit was concerned. This pushes down his total tax liability as compared with before‑tax share income. Obviously no assessee will rile any appeal on this point. It was only after Circular No. 13 of 1982 of the C.B.R. that the I.T.O. started adopting the before‑ tax share income for both purposes. It was thereafter that the tax‑payers started agitating calculation of ceiling on maximum tax liability. As far as apportionment of super‑tax on this very amount of share income was concerned, the tax‑payers had no grievance because it was to their advantage. Moreover, this is also in conformity with the High Court decision in the Seth Saifuddin's case which was later on confirmed by the honourable Supreme Court.

39. It is in view of discussion in the foregoing paragraphs of this note that I propose to reject the appeals filed by the assessees while I propose that the appeals filed by the department should succeed and the ceiling on tax liability mentioned in clause (c) to the pro to paragraph A of Part I of the First Schedule to the Income Tax Ordinance, 1979 should be calculated with reference to the total income of a partner including that amount of share from a firm which is determined on the basis of firm's assessed income and profit‑sharing ratios. In other words the provisions of section 69(4) arc to be ignored for calculating a partner's share income for determined the ceiling on tax liability provided by the proviso. MUHAMMAD MUJIBULLAH SIDDIQUI (JUDICIAL MEMBER).‑‑‑I agree with the conclusions arrived at, by my learned brother, Mr. Saiyid Saeed Ashhad, Judicial Member. However, I would like to add a few words of my own in support of the findings of my learned brother, Mr. Saiyid Saeed Ashhad. The question for consideration in these appeals has been very ably formulated in para. 3 of the judgment, which need not be repeated. The provisions of law relevant for deciding the question under consideration are contained in section 69 of the Income Tax Ordinance and in clause (e) of the proviso to para. A of Part 1 of the First Schedule to the Income Tax Ordinance, 1979. I would not like to encumber my order with the reproduction of these provisions of law as they have already been cited by my learned brothers Mr. Saiyid Saeed Ashhad, Judicial Member and Mr. AM Abdul Rahim, Accountant Member, in their respective orders. According to my humble opinion a perusal of section 69 and clause (e) of the proviso to para. A of Part I of the First Schedule to the Income Tax Ordinance, 1979 shows that these provisions are so obvious and clear that there is hardly any scope for any dispute or for interpretation so far the question under consideration, in the present appeals is concerned. When the point for determination, to wit, determination of the maximum tax liability of a partner in a firm, is examined in the totality of the tax scheme contained in the Income Tax Ordinance, 1979, the points which clinch the issue arc the determination of the total income of a partner and the tax payable thereon. Tax is charged under Chapter III of the Income Tax Ordinance, 1979. A perusal of sections 9 and 10 contained in Chapter III of the Income Tax Ordinance, 1979 shows that the income‑tax, super‑tax and surcharge arc levied on the total income of an assessee at the rate or rates specified in First Schedule to the Income Tax Ordinance, 1979. The term "total income" is defined in section 2(44) as follows: "`total income' means the total amount of income referred to in section 11 computed in the manner laid down in this Ordinance; and includes any income which, under any provision of this Ordinance, is to be included in the total income of an assessee."

41. The scope of total income is given in section 11 of the Income Tax Ordinance, 1979 as under:‑‑ "

11. Scope of total income.‑‑‑(1) Subject to the provisions of this Ordinance, the total income in relation to any assessment year, of a person,‑‑ (a) who is a resident, includes all income from whatever source derived, which‑‑ (i) is received, or is deemed to be received, in Pakistan in the income year by, or on behalf of, such person, or (ii) accrues or arises, or is deemed to accrue or arise, to him in Pakistan during such year, or (iii) accrues or arises to him outside Pakistan during such year'; (b) who is a non‑resident, includes all income from whatever sources derived, which‑‑ (i) is received, or is deemed to be received, in Pakistan in the income year by, or on behalf of, such person; or (ii) accrues or arises, or is deemed to accrue or arise, to him in Pakistan during such year. (2) Notwithstanding anything contained in subsection (1), where any amount consisting of either the whole or a part of any income has been included in the total income of a person on the basis that it has accrued or arisen, or is deemed to have accrued or arisen, to him in any year, it shall not be included again in his total income on the basis that it is received, or is deemed to be received, by him in Pakistan in any other year."

42. According to the definition of term "total income" contained in section 2(44), it means the total amount of income referred to in section 11 computed in the manner laid down in this Ordinance. The scope of total income given in section 11 of the Ordinance is also subject to the provisions contained in the Ordinance. The income of every person who is an assessee is assessed under Chapter VII of the Income‑tax Ordinance and the total income is computed under Chapter IV of the Ordinance. So far as a firm is concerned, the total income thereof is determined and assessed under sections 59, 59‑A, 60, 62, 63 and 65 as the case may be, which is evident from perusal of section 69(1) of the Ordinance. However, the total income of a partner is assessed and the sum payable by him on such assessment is determined under section 69 subsection (1), clause (a), para. (ii) of the Income Tax Ordinance, 1979. Thus, it will be seen that the provision contained in section 69 is in the nature of special provision while the provisions contained in Chapter IV and Chapter VII of the Income Tax Ordinance‑under which the income of every person other than a partner of a firm is assessed and computed is in the nature of general provision. It is established principle of the interpretation of statutes that the special provision in a statute overrides the general provisions. The legislature after providing, in section 69(1)(a)(ii) that the total income of each partner of the firm including therein hiss share of income, profits and gains of income year shall be assessed and sum payable by him on the basis of such assessment shall be determined has further defined the expression, "the share of a partner in the income of any firm" in section 69(4) as follows: "69(4). For the purposes of this section, the share of a partner in the income of any firm means the aggregate of ‑‑ (a) the proportionate share in the total income of the firm as reduced by the tax, if any, payable by the firm and any sum referred to in clause (b); and (b) any salary, brokerage, interest or commission receivable by the partner from the firm.

43. It means that whenever the question arises about the connotation of the expression "share of partner in the income of any firm" it has to be adopted as given by the legislature itself because after definition of a particular term or expression by the legislature the Courts are not left with any discretion or authority for defining the said term or expression in any other manner.

44. After keeping the above principle in view we find that there is no scope for any dispute on the point of scope of the total income of a partner in the firm. My learned brother Mr. Alvi Abdul Rahim, Accountant Member, has, therefore, rightly observed in para. 20 of this judgment that: "There is no dispute between the tax‑payers and the department about determination of income‑tax liability of a partner. Both of them agree that it is to be determined on the basis of a partner's share computed in the manner given in section 69(4) and the Income tax rates given by paragraph A of Part I of the First Schedule."

45. After reaching the conclusion that the total income of a partner in the firm is to be assessed, computed and determined for the purpose of income‑tax liability in manner given in section 69(4) when we revert to First Schedule to the Income Tax Ordinance, 1979 for calculating the income‑tax payable by a partner we do not find any difficulty in calculating either the rate of tax or the maximum tax liability of a partner in a firm, because the provisions contained in this behalf in clause (e) of proviso to paragraph A of Part I of First Schedule is very clear. The ceiling of maximum tax liability of a partner is to be calculated with reference to the total income of such partner and the department had been calculating the maximum tax liability of a partner of the firm on the basis of total income of the partner as determined under section 16(1)(b) of the repealed Income‑tax Act, 1922 (now Section 69(4) of the Income Tax Ordinance, 1979). The C.B.R. issued; circular letters in this behalf numbered 3(67)IT‑1/72 dated May 7, 1973 and March 20 1979. The method for calculating maximum tax liability of a partner in the firm was illustrated with following example: Rs. Total income of the firm (two partners with equal share) 3,00,000 Super‑tax payable 71,750 Divisible income among partners 2,28,250 Share of each partner 1,14,125 Income‑tax payable on above 47,134 Share of partner in super‑tax Payable by the firm 35,875 Total tax payable by partner (This should not exceed 50% of Rs.1, 14,125) 83,012 57,062 Rebate allowed (83,012‑57,062) 25,950 Income‑tax payable (47,137‑‑25,950) 21,187

46. A perusal of the above illustration shows that the C.B.R. while calculating maximum tax liability of a partner computed the same by taking the total income of a partner after deducting is proportionate share in the super‑tax paid by the firm or in other words at the total income of the partner arrived at in accordance with the provisions contained in section 69(4) of the Income Tax' Ordinance, 1979.

47. A similar illustration was given by the department even before the Honourable Supreme Court in the memo of appeal of Civil Appeals Nos. 251‑K to 253‑K of 1980 in the case C.I.T. East Zone, Karachi v. Seth Saifuddin Ghulam Hussain which has been reproduced by the Honourable Supreme Court in the judgment dated 2nd of May, 1989. The illustration on behalf of the department before the Honourable Supreme Court is as follows: "Firm's net income (4 partners‑‑equal shares) Rs. 10 lacs Super‑tax paid by the Firm Rs. 2 lacs Net income of the Firm Rs. 8 lacs Partners share in total income (20%) Rs. 2 lacs Maximum liability being 75% income‑tax/super‑tax cannot exceed Rs. 1,50,000 By reference of the above illustration the respondent asserted:

25% of super‑tax paid by firm i.e. Rs. Rs. 50,000 50,0(X1 (in proportion to share of the partner in the firm): But the I.T.O. maintained the following:

Not 25% but the percentage as the Rs.40,000." partner's share bears to total income of the firm before deduction of super‑tax i.e. in this case (2 lacs: 10 lacs = 1/5th or 20% =

48. A perusal of the above illustration also shows that the department pleaded before the Honourable Supreme Court that the maximum tax liability of partner is to be worked out with reference to the total income of the partner arrived at in accordance with the provisions contained in section 16(1)(b) of repealed Act, 1922 (now section 69(4) of the Income Tax Ordinance, 1979).

49. Till the assessment year 1982‑83 the department continued consistently with this view and the only point which was being agitated by them was in respect of partner's share of super‑tax payable by a registered Firm for the purposes of working out share of the partner in the super‑tax as bears to the total amount of super‑tax payable by the firm. The formula for calculating the portion of super- tax of a partner was illustrated by the Honourable Sindh High Court in the judgment in I.T.C. 90 of 1969 (C.I.T. Central Karachi v. Seth Saifuddin Ghulam Hussain) dated 22‑3‑1978 as follows: Portion of the total amount of His share of the income, profit super‑tax payable by the firm, and gains of the firm

Total income of the firm

50. The Honourable High Court held that the controversy related to the numerator in the aforesaid fraction. The Honourable High Court in the above case held that for the purposes of this numerator the portion of the total amount of super‑tax payable by the firm is to be taken before the deduction of super‑tax. Supreme Court and has for the purpose of numerator the share of partner in illustration given by the department should be taken at Rs. 40,000 and not at 50,

000. To put it in other words the contention of department was that the numerator should be taken after deduction of super‑tax from the total income of the firm and not before deduction of‑ super‑tax from the total income of the firm. This contention of the department did not find favour with the Honourable Supreme Court and it was held as follows: "The share of the super‑tax allowable to the partner is to be in the same proportion as is his share in the total income. The share of the partner has in this context not the artificial, restricted and purposive meaning as is given in clause (b) of subsection (1) of section 16 of the Act. The third step in exercise is again taken care of by the statute in the following words:‑‑ If the sum so arrived at exceeds seventy‑five percent. of the total income of such partner (including his share of income, profits and gains of the firm) the amount of income‑tax payable by him under this paragraph shall be reduced by the amount of such excess.' It is, therefore, clear that the departmental view is entirely based on and gives a restricted, referential meaning to the expression "his share" by linking it to section 16(1)(b). There being no statutory mandate for that, such curtailment cannot he permitted as it is to the prejudice of the assessee."

51. Thus the controversy, so far the numerator in the formula for the purposes of adding the share of super‑tax to the income‑tax payable by the partner for the purpose of working out the maximum tax liability is concerned, was laid to rest.

52. However, in the meanwhile, C.B.R. changed its view and issued Circular No. 13 of 1982 whereby a new controversy was started. The relevant portion from the Circular of C.B.R. bearing No. 13 of 1982 dated August 23, 1982 is reproduced below: "Sindh High Court, in a case I T Cs Nos. 90, 91 and 92 of 1969 decided that the share to be apportioned among the partners should be taken before deducting super‑tax. It also held that provisions of section 16(1)(b) (now section 69(4)) were not relevant to the proviso under reference laying down maximum limit of tax for a partner of registered firm. In view of High Court's decision it was decided to withdraw earlier instructions on the subject and a revised circular was issued on 27th April, 1982. Effect of calculation of tax in this manner is illustrated below:‑‑ Total income of firm (Two partners with equal shares) Rs.3,00,000 Super‑tax payable 71,750 2,28,250 Share of partner for tax calculation 1,14,125 Share to be adopted for the purpose of applying maximum limit of tax (proviso (e) to para. A of Part I, First Schedule). Rs.1,50,000 Income‑tax payable on Rs. 1,14,125 Rs. 47,137 83,012 Share of super‑tax of firm Rs. 35.875 This should not exceed 50% of Rs. 1.50.1100 i.e. 75,000 Rebate allowed (83,012‑75,000) 8,012 Income‑tax payable (47,137‑8,012) 39,125 Difference between the income‑tax payable in first and second methods 17,98."

53. A perusal of the above circular shows that the C.B.R. changed its view ostensibly in pursuance of the judgment of Hon'ble High Court in the case I T Cs. Nos. 90, 91 and 92 of 1969 (C.I.T. v. Seth Saifuddin Ghulam Hussain) but in fact it was result of non‑acceptance of its view by the Hon'ble High Court relating to the numerator in the formula as discussed above.

54. In the above Circular the C.B.R. observed that, "Sindh High Court, in a case I T Cs. Nos. 90, 91 and 92 of 1969 decided that the share to be apportioned among the partners should be taken before deducting super‑tax. It also held that provisions of section 16(1)(b) (now section 69(4)) were not relevant to the proviso under reference laying down maximum limit of tax for a partner of a registered firm." A perusal of the judgment of the Hon'ble High Court in the case C.I.T. v. Seth Saifuddin Ghulam Hussain shows that the Hon'ble High Court has not given any finding as purported by the C.B.R. The Hon'ble High Court had held that since for the purpose of numerator such portion of the super‑tax payable by the firm as bears to the total amount of such super‑tax, the same proportion as his share of income, profits and gains of the firm bears to the total income of the firm shall be added to the income‑tax payable by such partner and the total income of the firm is assessed under section 23 (repealed Act) like that of an individual person and thereafter the super‑tax payable by this firm is determined on the total income so assessed, therefore, the partner'; share of super‑tax payable by registered firm under the proviso is not to be al, Portioned with reference to the share of the partner as computed under section 16(1)(b) (repealed Act, 1922). All these observations were with reference to the share of partner in the super‑tax payable by the firm. The C.B.R. fell in error in interpreting the judgment of the Hon'ble High Court and there by mis-direct holding that the observations of the Hon'ble High Court were applicable for the purposes of taking the total income of such partner also while working out the maximum ceiling of the tax liability of the partner. The Circular of The C.B.R. dated August 23, 1982 numbering la of 1982 appears to be result of intermingling of the issues. The Hon'ble Sindh High Court and thereafter the Hon'ble Supreme Court have decided in the case of Seth Saifuddin Ghulam Hussain, the issue relating to the portion of super‑tax payable by a partner in the proportion of his share of income, profits and gains of the firm with reference to the total income of the firm and not the issue relating to the total income of the partner. The Hon'ble Supreme Court has clearly held that, "the share of the partner has in this context not the artificial, restricted and purposive meaning as given in clause (b) of subsection (1) of section 16 of the Act:" It means that the total income of the, partner for all intents and purposes is to be taken with reference to section 16(1)(b) of the repealed Act (now section 69(4) of the Income Tax Ordinance 1979) and in the context of the share of super‑tax apportioned to a partner out of the super‑tax payable by a firm, the share of a partner is to be taken with reference to the total income of the firm which was determined under the repealed Act, under section 23 like any other individual and the same position of law prevails under the Income Tax Ordinance, 1979. The raison d'etre is that super‑tax is payable by the firm only and not the individual partners and, therefore, whenever any question arises in context of the super‑tax payable by the firm or share of the partners therein, it has to be determined without reference to section 16(1)(b) of the repealed Act (now section 69(4) of the Income Tax Ordinance, 1979) and with reference to the provisions contained in Chapters IV and VII of the Ordinance under which total income of a firm is assessed, computed and determined. However, the share of the partner in the income of a firm with reference to his total income for the purpose of income‑tax liability is to he determined with reference, to section 69(4) of the Income Tax Ordinance, 1979 (section 16(1)(b) of the repealed Income‑tax Act, 1922) as his total income is assessed under section 69(4) of the Income Tax Ordinance, 1979 for the purpose of tax liability which is contained in Chapter VIII of the Ordinance which deals with tax liability of special cases. Thus in order to clinch the issue a fine but very obvious and clear distinction in the assessment and determination of the total income of a firm under the general provisions of the Ordinance and the super‑tax payable thereon by a firm, and the assessment and determination of total income of a partner under the special provisions of the Ordinance and the income‑tax liability thereon payable by a partner is always to be kept in view.

55. As a result of above discussion I respectfully agree with the conclusions and the findings of my learned brother Mr. Saiyid Saeed Ashhad, Judicial Member. FARHAT ALI KHAN (CHAIRMAN).‑‑--I have the advantage of going through the proposed orders of Saiyid Saeed Ashhad, the learned Judicial Member with whom Messrs Manzurul Haque and Mujibullah Siddiqui, the learned Accountant Member and Judicial Member respectively have concurred. Mr. Muhammad Muj ibullah Siddiqui has added his own note also though Mr. Manzurul Haque has affixed his signature on the order proposed by Saiyid Saeed Ashhad. Mr. Alvi Abdul Rahim, the learned Accountant Member, however, has written his dissenting order. . Before concluding let me point out that the necessity of constituting this larger Bench arose because of a decision of Full Bench of this Tribunal recorded in ITA No. 814/KB of 198.1‑85 on 4‑12‑1988. It was written by Mr. Alvi Abdul Rahim, the learned Accountant Member and Messrs Manzurul Haque and Mujibullah Siddiqui agreed with him. Thus a chain of authorities starting from, an order of this Tribunal recorded in ITA No. 1534/KB of 1962‑63, dated 3‑8‑1964 were rendered bad law. However, subsequently Mr. Muhammad Mujibullah Siddiqui, the learned Judicial Member, after going through the recent decision of Supreme Court came to the conclusion that the aforesaid Full Bench decision required reconsideration and it is at his instance that this larger Bench has been constituted. Now as far as my view is concerned I have been following the earlier decisions of this Tribunal and still feel that those decisions interpreted relevant law correctly. Now the same view has been reiterated by Saiyid Saeed Ashhad, the learned Judicial Member at sonic length, Mr. Muhammad Mujibullah Siddiqui, the learned Judicial Member who had earlier signed the Full Bench decision mentioned above has also changed his view together with Mr. Mansurul Haque, the learned Accountant Member who was also one of the signatories of aforesaid Full Bench decision however, Mr. Alvi Abdul Rahim, the: learned Accountant Member has still stuck to his earlier view. Since both the learned Judicial Members have elaborately dealt with all the points involved in these appeals I do not think that I would be adding something useful to aforesaid proposed orders. I therefore concur with the finding of both the learned Judicial Members. ORDER OF THE COURT In view of majority decision, all the appeals stand disposed of to the extent and in the manner as indicated by both the learned Judicial Members in their proposed orders. M.BA./856/T Appeals dismissed.