Law: Income Tax Ordinance, 2001

Section: 133,153(7),235(1),235(2)

JUDGMENT MUHAMMAD SAJID MEHMOOD SETHI, J.- Through instant reference application under Section 133 of the Income Tax Ordinance, 2001 ("Ordinance"), following questions of law, asserted to have arisen out of order dated 11.06.2014, passed by the Appellate Tribunal Inland Revenue, Camp at Multan ("Appellate Tribunal"), have been proposed and pressed for our opinion: - i. Whether under the facts and circumstances of the case, the learned ATIR failed to appreciate the fact that Advance Income Tax under Section 235 was deductible on the electricity under Subsection (2) and not on gross amount of electricity bill as contemplated in Subsection (1) of Section 235 of the Ordinance, 2001? ii. Whether learned ATIR and AITR has erred at law and give effect to interpretation of section 235 of the Income Tax Ordinance, 2001 made in the judgment rendered by the Hon'ble Division Bench of Sind High Court is similar matter of "Commissioner Inland Revenue Zone-I RTO Vs. Hyderabad Electric Supply Co. (HESCO)" in ITRA No.68/2012 wherein it has been ruled out that "there is distinction between electricity consumption bill and the gross electricity bill, whereas, the advance tax is required to be charged on the basis of electricity consumption only, and in the manner electricity consumption charges are charged, therefore, the gross electricity bill, which includes excise duty, income tax, G.S.T. and N.J., is not relevant for the purposes of charging advance tax at the rates specified in Part-IV of the First Schedule. Court do not see any ambiguity or conflict between the two provisions of sub-section (1) and sub-section (2) of section 235 of the Income Tax Ordinance, 2001, which otherwise, are to be read in harmony and not in isolation ''? iii. Whether the clarification of FBR dated 8th June 2013 regarding charging of Income Tax u/s 235 of the Income Tax Ordinance, 2001, on electricity bill has prospective effect and the learned CIRA has erred at law while holding otherwise that such clarification has the retrospective effect, which is against the dictums of Superior Courts of Pakistan? 2. Brief facts of the case are that respondent department issued a Show Cause Notice ("SCN") dated…

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