Law: Income Tax Ordinance, 1979

Section: 2(16)(b),80B

Law: Cooperative Societies Act, 1925

Section: 23

Income Tax Ordinance (XXXI of 1979)----Ss. 2(16)(b) & 80-B---Cooperative Societies Act (VII of 1925), S.23---Corporate body formed by or under any law---Scope---Cooperative society---Status---Interest/profit from bank deposits---Plea raised by Cooperative Societies was that they were not companies in terms of S.2 (16)(b) of Income Tax Ordinance, 1979, therefore, interest/profit from bank deposits was covered by S.80-B of Income Tax Ordinance, 1979---Validity---Only those bodies corporate were covered under S.2 (16)(b) of Income Tax Ordinance, 1979, which were created by some law for the time being in force---Such were only those Societies which were directly established, constituted and created by relevant statue itself---Body formed by private individuals and subsequently registered under some law was not a body formed under that law, rather it was a body formed otherwise but registered under law---Formation, creation and constitution of a body under law was therefore, altogether different from a body required merely to be registered under some law---Respondent-Societies were not creation of any law but whatever be their mode of creation, they were required to he registered with Registrar of Cooperative Societies under Cooperative Societies Act, 1925--Respondent-Societies were not covered by the definition of company as provided in S.2(16)(b) of Income Tax Ordinance, 1979 and could not be taxed as claimed by income tax authorities, therefore, Supreme Court upheld the passed by High Court---Appeal was dismissed. Black's Law Dictionary, 6th Edition, New Lexicon Webster's Dictionary, Words and Phrases Permanent Edition, Stroud's Judicial Dictionary, 5th Edition ref JUDGMENT SARDAR MUHAMMAD RAZA KHAN, J.---Commissioner of Income Tax/Wealth Tax Companies Zone-III, now Companies Zone-II, Lahore has been granted leave to appeal from the consolidated judgment dated 23-5-2000 of a learned Division Bench of Lahore High Court, whereby, the Income Tax appeals of the appellants were dismissed. The legal as well as factual aspects being common, all the appeals are taken up together. 2. The respondents are Societies registered under the Cooperative Societies Act, 1925…

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