Law: Income Tax Ordinance, 1979

Section: 12(9A),118C,Second Schedule,Part-IV,Clause59

Law: Income Tax Ordinance, 2001

Section: 133(1)

THIS JUDGMENT DELIVERED BY: SYED ARSHAD ALI, JUSTICE:---.--- Commissioner of Income Tax Legal Regional Tax Office Peshawar has filed this Reference under section 133(1) of the Income Tax Ordinance, 2001 (Ordinance) seeking advice of this court on the following questions arising out of the judgment of the learned Income Tax Appellate Tribunal dated 08.10.2007. i) Whether Tribunal was justified to offer interpretation of the term reserves on its own whereas reserves has been defined in explanation to Section 12(9A)? ii) Whether the definition given in the explanation covers the reserves of the earlier orders, being the inclusive definition? iii) Whether Tribunal erred to hold that the statute cannot tax the same amount again in a different year? 2. Brief but the relevant facts of the present case are that the respondent Messrs Chashma Sugar Mills Ltd. D.I. Khan (Company) is a public limited company which according to the record of the case, derives its income from Manufacturing and Sale of Sugar. For the Tax year ending on 30th September, 1998 the income of the Company was assessed through assessment order dated 09.2.2001 under section 62 of the Income Tax Ordinance, 1979 (hereinafter referred to as Repealed Ordinance) and total/net income of the Company was assessed as Rs.211,651/-. The company is also enjoying income tax holiday under clause 118-C of the Second Schedule to the Repealed Ordinance. The learned Additional Commissioner of Income Tax subsequently observed that the case of the Company was not properly handled by the Deputy Commissioner of Income Tax while passing the order of assessment for the assessment year 1999-2000 relating to its income under section 12(9A) of the Repealed Ordinance, therefore, while invoking his powers under section 66A of the Repealed Ordinance, directed the Assessing Officer to invoke section 12(9A) of the Repealed Ordinance after providing an opportunity to the Company of being heard vide order dated 10.11.2003. 3. Aggrieved of the said order, the Company filed an appeal before the Worthy Appellate Tribunal, Peshawar Bench, Peshawar, the learned Tribunal accepted the appeal of the Company vide its order dated 08.10.2007.…

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