High Court Reference

2019 PTD 1022 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss.121(1)(d) & 177 (10) [as prior to amendment vide. Finance Act, (XVI of 2010] & 133High Court ReferenceBest judgment assessment under S. 121 read with S. 177(10) of the Income Tax Ordinance, 2001Scope

Question before High Court was whether during audit proceedings, an order for "best judgment assessment" could have been passed under S. 121(1)(d) of the Income Tax Ordinance, 2001 prior to the amendment of S. 177(10) of the Income Tax vide Finance Act, 2010

Held, that prior to the amendment brought about in Ss. 121 & 177(10) through Finance Act, 2010; S. 121(1)(d) did not apply to cases where return of total income had already been filed and the same did not envisage a second assessment order to be passed in such circumstances

Reference was answered accordingly.

2013 PLD 617 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 2(ha) & 4(4)General Clauses Act (X of 1897) S. 8Income Tax Ordinance (XLIX of 2001) Ss. 207, 122 & 133High Court ReferenceConstruction of references to repealed enactments"Taxation Officer," meaning ofTerm "Taxation Officer" to be read as "Officer Inland Revenue" for purposes of Workers' Welfare Fund Ordinance, 1971

Taxpayer did not include its liability under S. 4(4)of the Workers' Welfare Fund Ordinance, 1971 after which under the amended assessment order taxpayer was held liable to pay an amount under S. 4(4) of the Workers' Welfare Fund Ordinance, 1971

Said addition was deleted by Appellate Tribunal on the ground that under S.4(4) Deputy Commissioner Inland Revenue had no jurisdiction under the Workers' Welfare Ordinance, 1971 as S. 4(4) referred to "Taxation Officer" whereas in the nomenclature of the amended Income Tax Ordinance, 2001, the word "Taxation Officer" was substituted by "Officer Inland Revenue", which did not find mention in S. 4(4) the Workers' Welfare Fund Ordinance, 2001

Held that, under S. 8 of the General Clause Act, 1897, it was clear that after the repeal of the Income Tax Ordinance, 1979 and enactment of Income Tax Ordinance, 2001, reference in any other enactment of the repealed Ordinance or its provisions would be read as the new Ordinance, which was the Income Tax Ordinance, 2001 along with the new provisions

Term "Taxation Officer", therefore, for all practical purposes, would be read as the "Officer Inland Revenue", as appearing in the Income Tax Ordinance, 2001

Repeal of the Income Tax Ordinance, 1979 therefore, did not absolve the taxpayer of his liability simply on the pretext that appropriate amendment was not made in the nomenclature of the "Taxation officer" in S. 2(ha) of the Workers' Welfare Fund Ordinance, 1971

Reference was answered in negative.

2013 PTD 2125 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss.13(1), 62 & 136Income Tax Ordinance (XLIX of 2001) Ss.239 & 210High Court Reference

Taxpayer was assessed under S.62 of the Income Tax Ordinance, 1979 whereafter an addition under S.13(1)(aa) of the Ordinance was made to the income of the taxpayer

Such addition was deemed to be irregular by the Income Tax Appellate Tribunal on the ground that approval of the Inspecting Additional Commission ("IAC") was not properly obtained as required under S.13(1) of the Income Tax Ordinance, 1979

Question before the High Court was whether approval of IAC was valid considering that the Taxation Officer carrying out the assessment enjoyed powers of the Commissioner by virtue of S.239 of the Income Tax Ordinance, 2001

Validity

Wisdom behind Taxation Officer seeking approval of the IAC under S. 13 of the Income Tax Ordinance, 1979 was that the addition was further reviewed by an officer senior-in-rank to the Taxation Officer so that a more informed and deliberative evaluation was done before allowing the addition under S. 13 of the Income Tax Ordinance, 1979 and the law did not solely rely on the discretion of the Taxation Officer junior to the IAC in this regard

Taxation Officer, even by delegation, if he were enjoying powers of the Commissioner, did not stand absolved from seeking approval from the higher officer, the IAC, under the law

Said situation would however change if the Taxation Officer was the Commissioner himself, as then seeking approval of the IAC would tantamount to seeking approval from a junior officer

Section 13(1) of the Income Tax Ordinance, 1979 would be rendered redundant in the new scheme of things under the new Income Tax Ordinance, 2001 and would stand impliedly repealed if the assessment was carried out by the Commissioner himself in face of S. 239(2) of the new Income Tax Ordinance, 2001

Under the facts and circumstances of the present case, the Taxation Officer was to seek the approval of the IAC, which was done, therefore, findings of the Appellate Tribunal were not justified

Reference was answered in the negative, in circumstances.