' CH. ANWAAR UL HAQ (JUDICIAL MEMBER).---The title appeals pertaining to tax years 2010 and 2011, have bee preferred at the instance of Revenue, against consolidated order Nos.20-21 dated 16.07.2013, passed by the learned CIR(A) Gujranwala. The appellant/ department contested the order of the CIR(A) on the following sole ground of appeal:-- 'That the CIR(A) was not justified to annul the order under section 122(5A) of the Income Tax Ordinance, 2001, without appreciating minimum tax under section 113 of the Income Tax Ordinance, 2001 was rightly charged on gross receipts constituting turnover, as provided in section 113(3) of the Income Tax Ordinance, 2001."
2. The relevant facts in both appeals are that the taxpayer in this case is a private limited company derives income from providing the Hajj services. Returns for the years were e-filed by declaring net incomes at Rs,308,630/- and Rs, 149,637/- for tax years 2010 and.2011 respectively which were deemed to be treated as assessm ent in terms of section 120 of the Income Tax Ordinance, 2001, Subsequently, it was found by the concerned Additional Commissioner that the deemed assessm ents were erroneous insofar as prejudicial to the interests of revenue for the reason that the taxpayer/company worked out tax liability by applying normal rate of tax whereas the company was required to pay minimum tax under section 113 on total turnover (gross receipts) declared for the years. On the basis of this discrepancy, proceedings were initiated by issuing show cause notice for amendment of assessment under section 122(5A) of the Ordinance. The taxpayer duly responded to the show cause notice and filed explanation which was rejected by the assessing authority. Accordingly, the deemed assessments were amended under section 122(5A) whereby gross receipts from Hajj services declared by the taxpayer at Rs,63,720,000/- and Rs,33,615,00- were subjected to minimum tax under section 113 @0.5% for tax year 2010 and @ 1% for tax year 2011.
3. The taxpayer assailed the order of the assessing authority before the learned CIR(A) and it was the contention of the AR before the CIR(A) that the imposition of section 113 based on turnover in the instant case does not apply because the amounts were part of our receipts .As the same were received on behalf of Hujjaj and forwarded them to Kingdom of Saudi Arabia, Pakistan International Air Lines/Saudi Air Lines etc. The learned CIR(A) being convinced with the submissions of the AR observed that receipts of the taxpayer cannot be terms as turnover. Accordingly, he deleted the additions in both years.
4. None appeared on behalf of taxpayer despite proper services of hearing notice while Ms. Bushra Fatima, represented the Department.
5. It is the contended by the learned DR that there was no justification for the learned CIR(A) to delete the additions which were made in accordance with law. It is asserted by her that the assessing authority has rightly treated the gross receipts as turnover and subjected the same to minimum tax under section 113(3) of the Income Tax Ordinance, 2001.
6. I have looked into the matter and after due consideration, I find that the taxpayer has wrongly calculated tax on normal rates on net incomes declared which were arrived at by excluding the operating expenses from gross receipts from Hajj services. As per provisions of section 113(3) of the Income Tax Ordinance, 2001, the taxpayer is liable to pay minimum tax on its gross receipts declared during the years under consideration. Hajj Group Operators were excluded from the purview of section 113 of Ordinance through insertion of a new clause (72A) of Part-IV of the Second Schedule to the Income Tax Ordinance, 2001, vide Finance Act, 2013 which reads as under:-- "(72A). The provisions of clause (I) and section 21, sections 113 and 152 shall not apply in case of a Hajj Group Operator in respect of Hajj operations provided that the tax has been paid at the rate of Rs,3,500 per Hajj for the tax year 2013 and Rs,5,000 per Hajj for the tax year 2014 in respect of income from Hajj operations . "
' From the perusal of above, it is clear that the Hajj Group Operators were excluded from the levy of minimum tax under section 113 w.e.f, July 2013 whereas no such exclusion is available to the taxpayer in the tax years 2010 and 2011. Under the circumstances, I am satisfied that the assessing authority has rightly charged minimum tax under section 113 on gross receipts declared by the company in the tax years 2010 and 2011. Accordingly, the impugned order passed by the learned CIR(A) is vacated and that of the Assessing Officer's passed under section 122(5A) are restored being passed in accordance with law.
7. Both the departmental appeals succeed in the above manner.