10-01-2011, 09:59 PM
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by LapTop</i>
<br />Registered or unregistered AOP may farak hay,
Registered AOP k liye turnover ki shart nahi hay, usy har hal may tax withheld karna hota hay chahy turnover kitna hi kyon na ho us ka, Registered AOP âassociation of persons constituted by, or under, lawâ k zamry may aati hay.
Unregistered AOP k liye turnover ki shart hay k us ka turn over tax year 2007 ya us k bad jis sal bhi Fifty million ko cross kary ga to wo withholding agent ho jaye gi.â an association of persons, having turnover of fifty million rupees or above in tax year 2007 or in any subsequent tax yearâ
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Dear Laptop,
Thanks a lot. I mistakenly ignored clause (c ) of Section 153(7). So there are two types of Association of Persons. One constituted by or under law. While the other not so constituted. Former is absolute withholding agent u/s 153 but latter is subject to turnover of Rs.50 million.
<b><u>First to solve the problem of the author, from your post also it is clear that author was not liable to deduct tax, as his firm was not registered and its turnover was below fifty million rupees.</u></b>
Moving ahead, on one point I have reservation. According to you, Registered AOP is similar to AOP "constituted under or by law". I disagree with that.
FBR is a body formed by law as it was constituted by FBR Act, 2007. Its s.3 says "hereby established a Board to be called the FBR" Similarly, s.3 SECP Act, 1997 says "hereby established a Commission to be called SECP". <b><u>These are the examples of bodies constituted by law.</b></u>
Some bodies are not directly constituted by Act but act says that Government will form that . For example HBFC Act, 1952 says that Federal Government will establish HBFC. s.3 of State Bank Act, 1956, says steps shall be taken to establish SBP. Similar is the case of NBP. <u><b>These are the bodies constituted under law</b></u>
Now take the example of Allied Bank Limited, or Engro Corporation Ltd. These are also registered with SECP and formed in accordance with the procedure prescribed by Companies Ordinance, 1984. They are governed by the Companies Ordinance, But not constituted by the Companies Ordinance.
Same is the case with AOP.
If law establishes particular AOP or directs government to establish certain AOP, then only that AOP will be called AOP constituted by or under law.
Otherwise partnerships merely registered under Partnership Act, are not at all bodies formed or constituted by or under law.
In this regard I rely on the judgment of Supreme Court. Where the question was whether a society registered under Co-operative Societies Act, 1925 is a body constituted by or under law. Supreme Cour said that "<i>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--</i>" [2009 PTD 799 = 2009 SCMR 715 ]
Above opinion is based on my understanding. It is a little complicated issue and the right legal situation may be different. Valuable input is welcome. But I humbly request, please give reference of section, SRO, case law, on which you base your opinions.
<br />Registered or unregistered AOP may farak hay,
Registered AOP k liye turnover ki shart nahi hay, usy har hal may tax withheld karna hota hay chahy turnover kitna hi kyon na ho us ka, Registered AOP âassociation of persons constituted by, or under, lawâ k zamry may aati hay.
Unregistered AOP k liye turnover ki shart hay k us ka turn over tax year 2007 ya us k bad jis sal bhi Fifty million ko cross kary ga to wo withholding agent ho jaye gi.â an association of persons, having turnover of fifty million rupees or above in tax year 2007 or in any subsequent tax yearâ
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Dear Laptop,
Thanks a lot. I mistakenly ignored clause (c ) of Section 153(7). So there are two types of Association of Persons. One constituted by or under law. While the other not so constituted. Former is absolute withholding agent u/s 153 but latter is subject to turnover of Rs.50 million.
<b><u>First to solve the problem of the author, from your post also it is clear that author was not liable to deduct tax, as his firm was not registered and its turnover was below fifty million rupees.</u></b>
Moving ahead, on one point I have reservation. According to you, Registered AOP is similar to AOP "constituted under or by law". I disagree with that.
FBR is a body formed by law as it was constituted by FBR Act, 2007. Its s.3 says "hereby established a Board to be called the FBR" Similarly, s.3 SECP Act, 1997 says "hereby established a Commission to be called SECP". <b><u>These are the examples of bodies constituted by law.</b></u>
Some bodies are not directly constituted by Act but act says that Government will form that . For example HBFC Act, 1952 says that Federal Government will establish HBFC. s.3 of State Bank Act, 1956, says steps shall be taken to establish SBP. Similar is the case of NBP. <u><b>These are the bodies constituted under law</b></u>
Now take the example of Allied Bank Limited, or Engro Corporation Ltd. These are also registered with SECP and formed in accordance with the procedure prescribed by Companies Ordinance, 1984. They are governed by the Companies Ordinance, But not constituted by the Companies Ordinance.
Same is the case with AOP.
If law establishes particular AOP or directs government to establish certain AOP, then only that AOP will be called AOP constituted by or under law.
Otherwise partnerships merely registered under Partnership Act, are not at all bodies formed or constituted by or under law.
In this regard I rely on the judgment of Supreme Court. Where the question was whether a society registered under Co-operative Societies Act, 1925 is a body constituted by or under law. Supreme Cour said that "<i>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--</i>" [2009 PTD 799 = 2009 SCMR 715 ]
Above opinion is based on my understanding. It is a little complicated issue and the right legal situation may be different. Valuable input is welcome. But I humbly request, please give reference of section, SRO, case law, on which you base your opinions.
