Law: Income Tax Ordinance, 2001

Section: 53,53(1),100,122B,150,151,153,159,159(1) ,159(2),206,233,PartI,DivisionVII oftheFirst Schedule,Clause47B ofPart-IV oftheSecond Schedule, Schedule-VI

JUDGMENT YAHYA AFRIDI, J.- Through this single judgment, this Court proposes to dispose of two writ petitions, as both have common questions of law involved therein. The particulars of the said writ Petitions are as follows:- 1. Writ Petition No.3564-P/2015. (M/s Cherat Packaging (Pvt) Ltd..Vs..The Government of Pakistan through Secretary Finance and Economic Affairs, Revenue Division Islamabad and nine others). 2. Writ Petition No.3565-P/2015. (M/s Cherat Cement Company Ltd, Staff Provident Fund & Gratuity 1st Floor, Betani Arcade Jamrud Road, Peshawar....Vs... The Government of Pakistan through Secretary Finance and Economic Affairs, Revenue Division Islamabad and nine others). 2. In both the petitions, the petitioners seek the common prayer to the effect that; "In view of the facts and circumstances narrated above, this honorable Court may graciously be pleased to declare that; a. The interpretation/directions issued by respondent No.2 be declared to be illegal without lawful authority and beyond jurisdiction. b. The respondents and other withholding agents/authorized banks be directed to not to withhold tax on the basis of the illegal interpretation issued by respondent No.2. c. The provisions of Clause 47B of Part-IV of the Second Schedule to the Ordinance read with Section 53 of the Ordinance be declared to have an overriding effect. d. The respondent No.2 be declared to have no authority to interpret any provision of the Ordinance. e. Any other relief, which this Honorable Court deems fit may also, be granted to the Petitioner." 3. In essence, the common stance of the petitioners is based on facts that, Cherat Papersack Ltd Employees Gratuity Fund and Cherat Papersack Ltd Provident Fund ("Collectively referred to as "Trusts") are duly recognized/approved funds under VI Schedule to the Income Tax Ordinance, 2001 ("Ordinance"), having invested in profit earning accounts. The claim of the petitioners is that the income of the Trusts from the said investments is not only exempted under sub-clauses (3) (ii) of clause 57 of Part-I of the Second Schedule to the Ordinance, but in fact, is also beyond the purview of the deduction of any withholding income tax…

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