Law: Income Tax Ordinance, 2001

Section: 26(a),99,122(5A),133,Fourth Schedule

Income Tax Ordinance (XLIX of 2001)----Ss. 26(a), 99, 122(5A) , 133--Term ‘subject to adjustment’-- Amendment of assessment--Scope--Authorities withdrew the advantage given to taxpayer company on account of its associated company and revised the assessment order by making an addition to its tax assessment--Appellate Tribunal Inland Revenue deleted the addition made by the authorities--Validity--As per R.5 of 4th Schedule to Income Tax Ordinance, 2001, certain adjustments in computation of income were provided with regard to taxability of an insurance business, which alone could be considered and applied and not the other provision of Income Tax Ordinance, 2001, dealing with normal business, incomes and their computations--Term ‘subject to adjustment’ related to adjustment as provided under Rules of 4th Schedule to Income Tax Ordinance, 2001, only and did not speak of other adjustments made in the case of other normal/ordinary business--Jurisdiction of assessment/adjustment by department was restricted to the extent as provided under the relevant Rules of 4th Schedule to Income Tax Ordinance, 2001--High Court declined to interfere in the order passed by Appellate Tribunal Inland Revenue-- Reference was dismissed, in circumstances. Commissioner (Legal) Inland Revenue v. Messrs EFU General Insurance Ltd. 2011 PTD 2042 ref. ORDER: IRFAN SAADAT KHAN, JUSTICE:---.--- This instant Income TaxReference Application (ITRA) was filed for the Advisory Jurisdiction of this Court to answer the following question of law raised in the instant application:- “ Whether on the facts and in the circumstances of the case the learned Tribunal was justified to delete addition made under Section 108 of Income Tax Ordinance, 2001, by placing reliance on the decision of Honourable Sindh High Court reported as 2011 PTD 2042 based upon proration of expenses under subservient Section 67 of the Income Tax Ordinance, 2001?” 2. Briefly stated the facts of the case are that the taxpayer is a non-life insurance company. Return of taxable’ income for the tax year 2010 was e-filed by declaring an income of Rs.230,024,137/-. The said return was treated as an Assessment Order. Thereafter the…

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