1989 PLP 721 (PTD)

SALEEM AKHTAR, J.--The applicant was granted tax holiday under section 15-BB of the Income Tax Act for two years for its new unit No.2 with effect from September, 1968. This exemption was availed by the applicant for four months in the assessment year 1969-70 i.e. from September, 1968 to 31-12-1968 on which date the assessee's accounting year ended. In the assessment year 1970 71 the Applicant's accounting year was changed from ending on 31st December to 30th September. Later on by Finance Ordinance 1971 Section 15-BB was amended and tax holiday was withdrawn in respect of income, profits and gains of any previous year ending at any time after 30th day of June, 1970, and it was laid down in subsection (4-C) of section 15-BB that such income, profit shall be computed and shall be subjected to tax in accordance with other provisions of the Act. Subsection M of newly-added subsection (4-C) of section 15-BB further;

"Nothing contained in this section or any other law for the time being in force shall be deemed to revive, maintain or continue an), notification or order made or any approval or exemption granted by or under the provisions of this section." Taking this provision into consideration the Income Tax Officer, refused to allow the tax holiday exemption to the applicant in respect of assessment year 1971-72. The applicant filed appeal before Appellate Assistant Commissioner, which was dismissed and the same order was maintained in appeal filed before the Tribunal. The applicant filed application under section 66 (1) of the Act raising the following questions:- (1) Whether on the facts and circumstances of the case, the learned Income tax Appellate Tribunal was justified to hold that the assessee was not entitled to the exemption for its Unit No.2 for the period falling within the assessment year 1971-72? (2). Whether the amended section 15-BB of the Income Tax Act violates Article 25 of the Constitution of Islamic Republic of Pakistan 1973 and is therefore, ultra vires the Constitution?" The Tribunal rejected the application holding that the provision of subsection (4C) was effective retrospectively. The Tribunal relied on the judgment in the case of Saeeda Begum and others v. Government of Pakistan 1976 P T D

338. The applicant has now filed this application under section 66 (2) raising the aforestated questions. We have heard the arguments of the learned counsel for the parties. Mr. Khali4 Anwar has referred to Commissioner of Income Tax (East) Karachi v. Ebrahim D. Ahmed and others 1982 P T D 211 in which Saeeda Begum's case was also considered and after discussing the validity of Finance Ordinance XXI of 1972 and taking into consideration the provisions of the Constitution it was observed as follows: "In our view, it is not necessary for us to hold that the Finance Ordinance XXI of 1972 as a whole in ultra vires the power of the President contained in Article 279 of the Interim Constitution 1972. As for the purpose of disposal of the above references cases it will sufficient to hold that by virtue of President's Order V of 1972, purporting to keep alive or to re-enact the above Ordinance, subsection (4-AA) inserted in section 15-BB of the Income Tax Act could not have been given retrospective effect from a date prior to 20-12-1971" We are therefore, of the view that a question of law does arise from the order of the Tribunal. In view of the aforestated observation, which we respectfully follow we, answer question No. 1 in the negative. Mr. Khalid Anwar has not pressed question No.2. M.BA./J-68/K Ouestion answered in the negative.