-Amendment of assessment-

Citation Name : 2016 PTD 2695 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN
Side Appellant : SECURITY GENERAL INSURANCE COMPANY LTD., LAHORE
Side Opponent : The CIR, ZONE-III, LTU, LAHORE
Ss. 5, 67, 99, 120 & 122(5-A), First Sched., Part-I, Division III & Fourth Sched., R. 5--- Insurance company---Amendment of assessment---Benefit of reduced rate of taxation on 'dividend income', claim for---Taxpayer, for relevant tax years filed return of total income claiming benefit of reduced rate of taxation of 10% on 'dividend income' under S.5 of Income Tax Ordinance, 2001, read with Division III of Part I of First Schedule to the Income Tax Ordinance, 2001---Such returns were deemed to be assessment orders issued under S.120 of the Income Tax Ordinance, 2001---Department, later on, invoked the provisions of S.122(5-A) of the Ordinance, asserting the position that since taxpayer company was an 'Insurance Company', taxation of its income was to be carried out under S.99, read with Fourth Schedule to Income Tax Ordinance, 2001; and provisions of S.5 of the Ordinance, 2001, providing for reduced rate of taxation for dividend income did not apply in the case, as entire income, including 'dividend income', was required to be treated as 'income from business' chargeable to tax at full rate of corporate law in that regard---Validity---Up till 30-6-2007, in Division III of Part I of First schedule to Income Tax Ordinance, 2001, a separate and specific rate of tax for 'dividend income' of 'Insurance Companies' was clearly prescribed---Providing for a reduced rate of taxation, explicitly in Division III of Part I of First Schedule for Insurance Companies at the time of promulgation of the Income Tax Ordinance, 2001, aimed at aligning the Legislation in line with principles settled by the Supreme Court in the case reported as PLD 1997 SC 700 = 1997 PTD 1693---Controversy, was limited to determine the effect of amendment introduced in said Division III of Part I of the First Schedule of Income Tax Ordinance, 2001, vide Finance Act, 2007, whereby the reduced rate, inter alia for insurance companies was done away with; and a uniform rate of 10% was prescribed for dividend income of all recipients---No amendment in S.5 or S.99 of the Income Tax Ordinance, 2001, was made by the Legislature while introducing a uniform rate of tax for various recipients of dividend income---Such position manifestly controverted the departmental stance that with effect from 1-7-2007, S. 5 of Income Tax Ordinance, 2001 became inapplicable as for as 'Insurance Companies' were concerned---Had the intention of the Legislature been to tax dividend income of insurance companies at corporate rate of tax, a corresponding amendment, must have been made in either S.5 or S.99 of the Income Tax Ordinance, 2001; and Fourth Schedule providing for application of uniform rate of taxation for all streams of income---Such was not the case---Dividend income in case of 'insurance companies' would remain chargeable to tax at reduced rate specified in Division III of Part I of the First Schedule to the Income Tax Ordinance, 2001.

Citation Name : 2016 PTD 2545 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN
Side Appellant : CIR, ZONE-III, LTU, LAHORE
Side Opponent : PAKISTAN FRUIT JUICE, LAHORE
Ss. 221 & 132 & 131---Appeal before Appellate Tribunal---Rectification of mistake---Scope---Department moved application for rectification of an error in the order of the Appellate Tribunal on the ground that the Appellate Tribunal had relied on a judgment of a High Court (reported as 2004 PTD 2267) and ignored a judgment of the Supreme Court (reported as 2001 PTD 2094) which supported contention of the Department---Validity---Contention of the Department regarding judgment of the Supreme Court was not tenable as the said judgment did not address the issue in question and the judgment of High Court relied on in the impugned order had not been suspended by the Supreme Court therefore, the Appellate Tribunal had rightly placed reliance on said judgment---No mistake apparent on the record in the impugned order was present--- Application was rejected, in circumstances.

Citation Name : 2016 PTD 1484 ISLAMABAD
Side Appellant : PAKISTAN TELECOMMUNICATION COMPANY LTD.
Side Opponent : FEDERATION OF PAKISTAN
Ss. 120, 177 & 214-C---Constitution of Pakistan, Arts. 10A, 18 & 25---Self-assessment scheme---Audit---Commissioner, powers of---Due process of law, right of free trade and discrimination---Assessees assailed show cause notices issued to them for conducting of their audit against the returns filed under Self-Assessment Scheme---Single Judge of High Court dismissed the petition filed by assessees---Validity---Powers of Commissioner under S. 177 of Income Tax Ordinance, 2001, were not subservient to the powers of Federal Board of Revenue, under S. 214-C of Income Tax Ordinance, 2001---Powers under both the provisions were exclusive and independent of each other---Scope of power of Commissioner under S. 177 of Income Tax Ordinance, 2001, were circumscribed by the checks and limitations which had been imposed by legislature---Power to select a person under S. 177 of Income Tax Ordinance, 2001, exclusively vested in Commissioner and the same had to be exercised within the scope determined therein---Power of Commissioner to call for record and conduct audit under S.177 of Income Tax Ordinance, 2001, did not require any pre-selection process by the Board---Division Bench of High Court, in intra court appeal, declined to declare provisions of S. 177 of Income Tax Ordinance, 2001, to be in violation of Art. 10-A, 25 or 18 of the Constitution---Notices in questions either did not disclose reasons based on criterion determined by Commissioner or no reason had been mentioned---High Court directed the Commissioner to afford an opportunity of hearing to each assessee and thereafter pass speaking order and judgment passed by Single Judge of High Court was set aside---Intra Court Appeal were allowed accordingly. Chenone Stores Limited through Executive Director (Finance Accounts) v. Federal Board of Revenue through Chairman and 2 others 2012 PTD 1815 and Northern Bottling Company Limited v. Federation of Pakistan 2013 PTD 1552 dissented from.

Citation Name : 2015 GBLR 30 SUPREME-APPELLATE-COURT
Side Appellant : CLEAN DRINKING WATER AT SKARDU
Side Opponent :
Art. 61---Suo motu jurisdiction of Supreme Appellate Court---Matter relating to clean drinking water for people of Skardu city---Constitution of a Committee on the order of the Supreme Appellate Court to resolve the issue of provision of clean drinking water for the inhabitants of Skardu City---Said Committee submitted its report along with recommendations on issue of quality of water at Pakistan Tourism Development Corporation (PTD C) Motel at Satpara Dam---Supreme Appellate Court after perusing the said report directed that as Pakistan Tourism Development Corporation (PTD C) had already constructed wastewater treatment system according to the approved design and arrangements had been made to uplift and re-use the partially treated water for landscaping as suggested by Environmental Protection Agency (EPA), therefore, the Motel should be made operational at the earliest with the following conditions that the Pakistan Tourism Development Corporation (PTD C), management at Satpara would be responsible to operate the system in accordance with the best environmental practices such that no sewerage shall spillover or ingress in the reservoir; that the treatment system should be operated at the levels of irrigation water standards and be used for landscaping, and that the Environmental Protection Agency (EPA) should regularly monitor the operation of the treatment system, and issue and renew the certification of Pakistan Tourism Development Corporation (PTD C) annually---Suo motu case was disposed off accordingly.