Law: Income Tax Ordinance, 2001

Section: 49,49(1),49(2),49(3),49(4),122(5A),122(9 ),147

Law: Constitution of Pakistan, 1973

Section: 165,165A,199

(a) Income Tax Ordinance (XLIX of 2001)--S. 49-Constitution of Pakistan, Arts. 165A, 165 & 199-Exemption of certain public property from taxation under Art. 165 of the Constitution-Liability of income tax on statutory bodies / entities- Benefit of exemption of levy of income on income of Federal and Provincial Governments and local authorities under S.49 of the Income Tax Ordinance, 2001-Sale of Telecom Spectrum License and renewal thereof-Spectrum License Fee to be treated as income of Federal Government-Scope-Petitioner Pakistan Telecommunication Authority ("PTA") impugned show-cause notice issued by Department whereby income tax was sought to be assessed on Spectrum License Fee and renewal of the same received by PTA from telecommunication companies on ground that said fees were exempt from tax under S.49 of Income Tax Ordinance, 2001 as the same was income of Federal Government-Contention of Department, inter alia, was that such exemption sought was prejudicial to interest of revenue and against Art. 165A of the Constitution-Validity-Spectrum License Fees including renewal fee had been deposited entirely by PTA into Federal Consolidated Fund and PTA had not retained any part thereof- Income of Federal Government under S.49(1) of Income Tax Ordinance, 2001 was exempt from tax and proviso to S. 49(4) of said Ordinance, specifically provided that income from sale of spectrum licenses and renewals was to be treated as "Income of Federal Government", therefore, Department could not call upon PTA to pay income tax on the same-Pakistan Telecommunication Authority was merely a regulator and owner of telecom spectrum was the Federal Government-Legislature had inserted proviso to S. 49(4) of Income Tax Ordinance, 2001 which was neither repugnant to Art. 165A of Constitution nor to any other Constitutional provision-High Court held that impugned show-cause notices and demands for payment of tax were therefore patently illegal and set aside the. same-Constitutional petition was allowed, accordingly. (b) Constitution of Pakistan--Art. 199-Constitutional jurisdiction of High Court-Show-cause notice-Scope-High Court under Art. 199 of Constitution ordinarily ought not…

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