' These departmental appeals are directed against the consolidated order of learned CIT(A) dated 28-1-2010. The Department has taken the following common grounds of appeal for tax years 2004 and 2005:-- "(2) That learned CIR (Appeals) Hyderabad was not justified to hold that the taxpayer being an educational society, did not fall within the definition of company.
(3) That learned CIR(Appeals) Hyderabad was not justified to hold that definition of company made exclusion of Societies registered under Societies Registration Act.
(4) That learned CIR (Appeals) Hyderabad was not justified to hold that Society School was not established under specific act.
(5) That taxpayer society was established and registered under specific act i,e, Societies Registration Act."
2. The Department has come up in appeal before this Tribunal having been dissatisfied by the order of the learned CIR(Appeals) dated 28-1-2010, who had annulled the order of the Taxation Officer passed under section 122(5A) of the Income Tax Ordinance, 2001, declaring the same to be not sustainable in the eyes of law.
3. The learned DR while defending his appeals has contended that the learned CIR(A) was not justified in holding that the taxpayer being an educational society, did not fall within the definition of "company". The learned DR further contended that the learned CIR(A) Hyderabad has erred in holding that the definition of "company" made exclusion of societies registered under Societies Registration Act and that society school was not established under specific act. He further alleged that instead the taxpayer society was established and registered under specific act i,e, Societies Registration Act. He has, therefore, prayed that the order of the Taxation Officer being in accordance with law may be restored and that of the learned CIR(A) may be vacated being illegal and ultra vires of the provisions of law.
4. In rebuttal, the learned counsel for the taxpayer has stated that the taxpayer is a society registered under Societies Registration Act, 1860 and is a non-profit organization imparting education on no-profit no -gain basis. He has further contended that the Taxation Officer, without considering and examining the legality in respect of section 80(2)(b)(v) of the Income Tax Ordinance, 2001, arbitrarily arrived at the conclusion that the taxpayer falls within the definition of a company and the Taxation Officer tried to justify his action on the ground that the taxpayer has filed its return of income on return form claiming exemption under clause 92 of the 2nd Schedule to the Income Tax Ordinance, 2001 and without even adverting to the merits of the case, passed an ex parte order and charged minimum tax under section 113 of the Ordinance.
5. In furtherance, the learned counsel for the taxpayer/assessee has contended that notwithstanding that the order of the Taxation Officer is illegal, but the same is also violative of the principles of natural justice by not affording the taxpayer/assessee an opportunity of being heard and place before him the explanation/rebuttal in support of his case. He has further contended that the Taxation Officer did not bother to assign any reason whatsoever for treating the taxpayer/society as a company except for reproducing the relevant provisions of law which in fact support the contention of the taxpayer as interpreted by the learned Tribunal as well as by the Honourable High Court in numerous cases. In support of his averments, the learned counsel for the taxpayer/assessee has relied upon judgment of the Tribunal reported as 1998 PTD 2017, judgment of the Honourable Lahore High Court reported as 2000 PTD 388 in the case of CIT y. Messrs Engineering Cooperative Housing Society Lahore, and judgment of the Honourable Sindh High Court reported as 2003 PTD 1264 in the case of CIT v. Messrs Spring Field Secondary School Karachi.
It would be pertinent to reproduce the relevant extract from the judgment of the Honourable Sindh High Court reported as 2003 PTD 1264:-- '.......... The societies, registered under the Societies Registration Act cannot be equated with the companies registered under the Companies Ordinance or incorporated under a statute, therefore cannot be treated as company as defined in section 2(16)(b) of the Income Tax Ordinance, 1979.
Resultantly, these appeals have no merits and the same are dismissed in limine."
6. The learned counsel for the taxpayer/assessee has, therefore, stated that in view of the clear and unambiguous pronouncements by the Superior Courts, it is evident that the action taken by the Taxation Officer is patently illegal and may be declared to be illegal and based on misinterpretation of statutory provisions. He has prayed that the order of the Taxation Officer may be vacated and that of the learned CIR(A) may be restored in view of the facts of the case and the case-law cited above.
7. We have heard Mrs. Shah Bano G.M. Khan, learned D.R., and Mr. A. S. Jafri, learned counsel for the taxpayer/assessee. We have also perused the order of the Taxation Officer, the impugned order of the learned CIR(A) and the case-law cited during the course of hearing.
8. Having heard the rival arguments advanced by both the parties, we are of the considered opinion that the order of the learned CIR(A), annulling that of the Taxation Officer, is based on correct interpretation of provisions of law and has been passed by applying judicious mind after going through the facts of the case and keeping in view the various case-law cited by the learned counsel for the taxpayer/assessee. We find ourselves in full agreement with the finding of the learned CIR(A) that the taxpayer/society does not fall within the ambit of a company. His finding is also fortified by a number of reported judgments of superior courts relied upon by the learned counsel for the taxpayer/assessee. We have also gone through these judgments and are of the opinion that the same are in all fours with the contentions made by the learned counsel. In this view of the matter, we see no reason to interfere with the order of the learned CIR(A), and the same is upheld.
9. The appeals filed by the Department for the tax years 2004 and 2005 stand dismissed.