2020 PLP 2187 (PTD)

This order shall also dispose of I.T.R. No.28 of 2017 as common question of law is involved in both applications. Following question is pressed for opinion of this Court, which is claimed to have arisen out of the impugned order dated 25.10.2018 passed by the Appellate Tribunal Inland Revenue ("Appellate Tribunal"). "(i). Whether the learned Appellate Tribunal in view of the facts and circumstances of the case was justified to hold the receipts of taxpayer as export of software in terms of Clause 133 of Part-1 to the Second Schedule to the Income Tax Ordinance, 2001 ("the Ordinance") without fulfilling its requirements."

3. Learned counsel for the applicant department submits that while allowing respondent's appeal, the Appellate Tribunal had ignored that necessary documents for registration from State Bank of Pakistan were not produced before the Authorities below. Contends that in absence of those documents, exemption under Clause 133 of Part-I to 2nd Schedule of the Income Tax Ordinance, 2001 ("Ordinance of 2001") could not have been assailed by the respondent taxpayer.

4. Learned counsel for respondent taxpayer has opposed the arguments and submits that all the necessary documents to prove that software was exported in the relevant tax year were produced before all the forums including the Appellate Tribunal. Contends that the Appellate Tribunal, after examining all the documents has given findings of facts that in the relevant year, respondents were engaged in the business described under Clause 133 of Part-1 to 2nd Schedule of the Ordinance of 2001, which was exported from Pakistan.

5. Heard. Record perused.

6. We agree with the submissions by learned counsel for the respondent taxpayer that decision is based on findings of facts. The Appellate Tribunal after examining various documents has given findings that respondent taxpayer was entitled to claim exemption under Clause 133 of Part-I to 2nd Schedule of the Ordinance of 2001. Relevant paragraph is reproduced hereunder:- "In continuation, we have also gone through the encashment of foreign currency certificate with ENC Nos.191 to 195 dated 21.09.2010 issued by the Standard Chartered Bank Limited, Satiana Road, Faisalabad having account No.01-0144630-01 in the name of Certification Trendz. Besides it, we have also gone through the various bank statements issued by the Standard Chartered Bank Limited Satiana Road, Faisalabad from 30.09.2008 to 30.06.2010 wherein it is crystal clear that the taxpayer-appellant received foreign remittances from abroad and this fact cannot be denied with any angle that the taxpayer is involved in IT services providing/rendering to foreign clients. To strengthen his argument and proving the status of M/s. Certification Trendz as IT services to foreign clients, the learned AP for the taxpayer also furnished the certificate issued on 21.01.2010 by the Atlas Bank Limited P-12 Kotwali Road, Faisalabad subjecting to inward foreign remittance (US Dollars) from 07.07.2009 to 20.10.2009 on account of nine references. In the presence of these valid and solid evidences on account of numerous transactions in the taxpayer's account in lieu of it does not make difference that the agreement is not on judicial paper. It is significant to state here that all the business with the other foreign countries is running through telephone, email, fax etc."

7. We also agree with the submission by learned counsel for respondent that requirement of Clause 133 of Part-1 to 2nd Schedule of the Ordinance of 2001 is export of the business as described in this Clause and not a particular registration. The findings by the Appellate Tribunal on facts cannot be displaced by this Court in advisory jurisdiction.

8. Reference Application is disposed of accordingly.

9. Office shall send a copy of this order under seal of the Court to the Appellate Tribunal Inland Revenue as per Section 133(5) of the Income Tax Ordinance, 2001. KMZ/C-28/L Order accordingly.