Law: Income Tax Ordinance, 2001

Section: 53,100C,159,SecondSchedudle

Law: Constitution of Pakistan, 1973

Section: 246

(a) Income Tax Ordinance (XLIX of 2001)-------Ss. 53, 159 & Second Sched.---Constitution of Pakistan, Art. 246---S.R.O. No. 1213(I)/2018 dated 05.10.2018---SRO No. 887(I)/2018, 23.07.2018---Merger of Federally Administered Tribal Areas ( FATA ) into Province of Khyber Pakhtunkhwa (KPK)---Tax exemption provided to residents of said area by Federal Government for a period of five years---Exemption from payment of tax and exemption from applicability of tax ---Distinction---Deduction of withholding taxes and advance tax on utility bills for residents of former FATA---Requirement of Tax Exemption Certificate ---Scope---Petitioners, which were industrial units operating in erstwhile FATA impugned demands for payment of sales tax and income tax as well as deduction of withholding and advance tax on electricity bills and other utilities---Question before High Court was related to interpretation exemption from payment of tax and exemption from certain provisions of tax , provided to individuals, association of persons and companies, located in erstwhile FATA as defined by Art. 246 of the Constitution and such exemptions, inter alia, were provided by S.R.O. No. 1213(I)/2018 dated 05.10.2018 and S.R.O. No. 887(I)/2018, 23.07.2018---Held, that after amendment in the Constitution immunity from taxes allowed to inhabitants of erstwhile FATA no longer existed, however Federal Government decided to continue concession to resident of said area in shape of exemption from all taxes for period of five years which were granted by issuing SROs---Such exemptions was not simple exemptions regulated under S. 53(1) of Income Tax Ordinance, 2001, rather Federal Government intended to keep the situation as it existed prior to the Constitutional amendment---Section 53(2) of Income Tax Ordinance, 2001 not only empowered Federal Board of Revenue to exempt any class or classes of persons from payment of tax, but also empowered Federal Government to exempt any person from the operation of any provision of Income Tax Ordinance, 2001---Petitioners, in the present case, had not been exempted from tax payable under but rather been exempted from applicability of such provisions--- Exemption…