2003 PLP 812 (PTD)

10. So far as the other argument of the learned counsel for the petitioner that clause (8) has retrospective application preventing the Assessing Officer to probe into source of income under section 13 (1)(aa) of the Ordinance is concerned, the same also has a force in it for the following reasons:‑ Firstly, in clause (8) the word "invested" has been used which is of key importance as it has been used in past participle form. It had covered all those investments which had been made in the industrial undertaking whose income was assessed under clauses (118C), (118D) and (118E) of Part I of the Second Schedule of the Ordinance at the time of insertion of clause (8). It is worth‑mentioning here that Messrs Kaghan Ghee Mills (Pvt.) Ltd. had been set up prior to the issuance of Notification S.R.O. 1283 (I)/90 dated 13‑12‑1990 and pursuant to the said notification the said company was treated as set up and assessed under clause (118C). Secondly in the Notification S.R.O. 1283(I)/90, dated 13‑12‑1990 no date has been given for application of clause (8), therefore, there is no bar imposed by the authorities which issued the said notification to interpret retrospectively. Thirdly, clause (8) is beneficial in nature. It is also by now established principle of law that if any notification/circular is of benevolent nature, the same would go to the. assistance of assessee. In his regard reliance can safely be placed on the following judgments:‑ (i) The Commissioner of Income Tax, East Pakistan, Dacca. V. Noor Hussain (PLD 1964 SC 657) (ii) Laxmichand Hirjibhai v. CIT, Gujrat‑III (128 ITR), (iii) Gurjargravures (Pvt.) Ltd. v. Income‑Tax Officer, Company Circle‑VIII, Ahmedabad, and another (154 ITR 786). (iv) Rajan Ramkrishna v. Commissioner of Wealth Tax, Gujrat‑I (127 ITR 1). (v) Navnil Lal C. Zaveri v. K. K. Sen (56 ITR 198). (vi) Ellerman Lines Ltd. v. CIT (82 ITR 913). (vii) Bechardas Spinning and Weaving Mills Co. Ltd. v. CIT (ITR 153 of 1976). (viii) Tata Iron & Steel Co. Ltd. v. N. C. Upadhyaya (96 ITR 1). (ix) Navnit Lal Ambalal v. CIT (1976) (105 ITR 735). (x) M. M. Annaiah v. CIT (76 ITR 582 (Mys). (xi) Dr. T. P. Kapadia v. CIT (87 ITR 511 (Myss). (xii) Dattatraya Gopal Shette v. CIT, Poona Range, Poona Kania. (xiii) CIT Kerala‑I v. B. M. Edward, India Sea Foods, Cochin (119 ITR 334). (xiv) Raja Rajeswari Weaving Mills v. Income Tax Officer "A" Ward, Cannanore, and another (113 ITR 405). (xv) CIT Assam, Nagaland, Meghalaya, Manipur and Tripura (102 ITR 408),. (xvi) (150 ITR 460). (xvii) UCO Bank v. CIT (237 ITR 889) = (1999 PTD 3752). (xviii) T. R. No.33/97 (Usman Ghee Industries v. CIT; and (xix) CIT v. Muhammad Kassim (2000 PTD 280). Fourthly, the purpose of insertion of clause (8) was to encourage industrialists to promote the investment in the industrial undertaking without fear of probing their source of income, therefore, employing clause (8) retrospectively would he in line of promotion of the purpose of the legislation. It is not always necessary that retrospective application is hl found in express words. In the absence of express words whenever there is intendment to the effect that some provisions will be retrospective in its application, effect can be given to that intendment. In this regard reliance can be safely placed on Alif Din v. Noor (PLD 1969 Pesh. 62).

11. The net result of the above discussion is that the Income Tax Officer and learned Income Tax Appellate Tribunal have failed to properly appreciate that the petitioner was entitled to benefit of clause (8) of Part I of Second Schedule of the Ordinance. We, therefore, while answering this tax reference hold that the petitioner was entitled to benefit of clause (8) of Part I of the Second Schedule of Income Tax Ordinance, 1979. We also set aside the assessment order dated 26‑6‑1993 passed by the Income Tax/Assessment Officer and the order of learned Income Tax Appellate Tribunal dated 16‑5‑1996 and restore the order of the Commissioner Income Tax (Appeals) dated 12‑4‑1994. The reference is sent to the Income Tax Appellate Tribunal in terms of section 136 (5) of the Ordinance with the direction to pass necessary orders as required under the above mentioned section of law. The Registrar of this Court is directed to send certified copy of this judgment under the seal of the Court and under his signatures to the appellate Tribunal enabling it to do the needful. There shall be no orders as to costs. M.B.A./646/P Order accordingly.