1. KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER).---In these appeals filed by the assessee the assessm ent order passed under section 52 for non-deduction of tax at source under section 50(7- B) is being challenged.
2. The perusal of record shows that the assessee made payment of assessment of Rs.1,47,500 as rent for the assessm ent year 1992-93 and Rs.1,00,000 for the assessment years 1993-94 and 1994-95 and has not deducted any tax at source under section 50(7-B). The I.T.O., therefore, considered the assessee to be a defaulter and imposed penalty.
3. The A.R. has argued that the law requires deduction tax, in the case of an assessee who pays rent to a person on excess of Rs.1,00,000. In the impugned case, he informed, the assessee is tenant of two persons. In his opinion the rent payable to two of them each being less than Rs.1,00,000, the provision was not attracted. Before proceeding in the matter we consider it more appropriate to go through the relevant provisions of law which is reproduced as under:--- S.50(7- B)"Any person responsible for making any payment in full or in part (including a payment by way of an advance) to any person, on account of the rent of house property (including rent) of furniture, fixtures and services, if any) on behalf of Government, a local authority, a company or the diplomatic, mission of a foreign State shall, where the annual rent of such property exceeds one hundred thousand rupees, deduct advance tax, at the time of making such payment, at the rate specified in the First Schedule and credit for the tax so deducted in any financial year shall, subject to the provisions of section 53, be given in computing the tax payable by the recipient for the assessm ent year commencing on the first day of July next following the said financial year, or in the case of an assessee to when section 72 or section 81 applies, the assessm ent year, if any, in which the said date', as referred to therein falls, which ever is the later."
4. The operating part in section is, "Any person responsible for making any payment in full or in part to any person". (underlined for emphasis). In the first part the words "any person" refer to one who is paying rent and in second part, which has been underlined by us, refers to the recipient and it also charge only "person" not "persons". Apparently it means that if deducting authority pays a sum exceeding the limit prescribed by law to any "person" he is legally bound to deduct tax therefrom on behalf of the recipient. The credit of this tax is the right of the recipient of rent. It is he whose tax is to be deducted. In the impugned case recipient are two and each one of them is receiving a sum less than the prescribed limit of Rs.1,00,000 (in such cases deduction of tax on rents paid on less than the limit to the recipient does not seem to be the spirit of law. (Underlining is ours).
5. Considering this provision at par with section 50(4) where the tax in the case of a supply/contractor (prior to the amendment) was deducted if his supply during a year exceeded the prescribed limit. The limit was not in respect of the deducting authority, but on account of supply effected by the contractor.
6. The case can also be seen from on other angle. The words "any person" being not defined by the Income Tax Ordinance, let us go through its dictionary meaning for arriving at some conclusion.
7. The same is as follows:--- Simple dictionary meaning of word any is "one" according to Webster's Dictionary it means indicating a person, thing event etc. as not a particular or determined individual of the given category but whichever one chance may select this, that or the other.
8. The interpretation of the word "any" has more exhaustively dealt with by the Stroud's Judicial Dictionary. The words "any person" used has given the meaning as not restricted to a particular person but one out of many.
9. In some of the reported judgments the meanings of the words "any person" were held as under:--- In the case of I.T.O. Sitapur v. Murlidhar Bahagwan Das, reported as AIR 1955 SC 342 about the words "any person" it was held that the expression is necessarily circumscribed by the scope of the subject matter of the appeal or revision as the case may be. That is to say, that person must be one who would be liable to be assessed for the whole or a part of the income that went into assessm ent of the year under appeal or revision the expression "any person" in the setting in which it appears must be the aforesaid sense with the assessment of the year under appeal.
10. In another case S. Naganatha v. CIT reported as AIR 1965 Madras regarding "any" person" it was held....it would bring within its scope only the concerned assessee and those lawfully represented by him.
11. The summary of above discussion is that section at both occasions the usage of word "person" is necessarily for a particular individual. The c word "person" cannot as such be equated to "persons".
12. The law of interpretation of fiscal statutes has already been discussed several times in reported judgments which says that the legislature does not legislate any provision unintendedly and while interpreting them intentments and purposes should not be ignored. Similarly Courts are not permitted to go beyond their jurisdiction by extending scope of a provision. These observations does not need any support but for ready reference we cite here a latest judgment of ITAT reported as follows:--- 1996 PTD (Trib.) 1144.
13. In keeping view these principles we cannot support application of the word 'person' to more than one individual. Thus, if one person is responsible for making payment to more than one person and in the case of each one of them the amount payable on account of rent is less than the prescribed limit, which in the impugned case is Rs.1,00,000 the provision is not applicable. If, however, one of the two or both of them is/are receiving an amount which is more than the limit the provision shall come into force.
14. The upshot of the above discussion is that each recipient in the impugned case having received rent during this year less than the prescribed limit, the provisions of section 50(7-B) is not applicable. Treatment given to the assessee by considering him as assessee in default as such is not justified. The assessm ent under section 52 for all the 3 years is therefore, cancelled.
15. The A.R. has argued few other points also which in view of the above finding does not need adjudication. The assessee's appeal succeeds and is accordingly disposed off.