Law: Income Tax Ordinance, 1979

Section: 80D,113,63,2(16)(b),SecondSched.,

(a) Income Tax Ordinance (XXXI of 1979)----Ss. 80-D, 113, 63 & 2(16)(b) & Second Sched., Part-I, Cl.. (90)---Minimum tax on income of certain persons---Pakistan Hockey Federation---First Appellate Authority annulled the assessments by holding that charging tax on a non-taxable entity being an institution recognized by the Government for the purposes of promoting, controlling and regulating any sport or game was illegal---Department contended that Federation was a body corporate and well under the definition of a company and its receipts were liable to minimum taxation even if it was otherwise exempt from taxation under the Second Schedule to the Income Tax Ordinance, 1979---Validity---Pakistan Hockey Federation qualified as a body corporate and fell within the four corners of the definition assigned to a company under S.2(16) of the Income Tax Ordinance, 1979-Being a sports organization established for the promotion and controlling the game of hockey, its income was exempt from taxation under Cls. (90) & (91)(i) of Part I of the Second Schedule to the Income Tax Ordinance, 1979 but S.80D of the Income Tax Ordinance, 1979 did not exclude from its ambit, a company enjoying exemption under any other provisions of law except those entities to whom the decision of the Supreme Court in PLD 1997 SC 582 related---Hockey Federation could not be crabbed with those taxpayers enjoying the benefit of Protection of Economic Reforms Act, 1992---Federation being a non-business/non-profit organization was also not substantiated through submission of annual accounts---Pakistan Hockey Federation fell within the definition of a company and was hit by mischief of S.80-D of the Income Tax Ordinance, 1979 unless it was proved that the sources of receipts were from non-commercial activities. Black's Law Dictionary ref. 2003 PTD 1264 and Messrs Ellahi Cotton Mills v. Federation of Pakistan PLD 1997 SC 582 rel. (b) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 80-D & 63---Minimum tax on income of certain persons---Estimation of turnover/receipts for levy of minimum tax---Validity---Provision of S.80-D of the Income Tax Ordinance, 1979 expressly mentioned that it should…

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