Law: Income Tax Ordinance, 2001

Section: 133,221,239

Income Tax Ordinance (XLIX of 2001)--- ----Ss.133, 221 & 239---Reference---Tax adjustment---Authorities were aggrieved of order passed by Appellate Tribunal Inland Revenue justifying tax claim entitlement of taxpayer---Validity---Provision of S.239(15) of Income Tax Ordinance, 2001, provided that S.107AA of Income Tax Ordinance, 1979, (since repealed) would continue to apply until 30-06-2002---Tax-credit available from pervious assessment year could be adjusted on or after 30-6-2002 which was in conformity with spirit of S. 239(15) of Income Tax Ordinance, 2001---Tax credit was an entitlement linked with making of an investment, and a tax-payer would become entitled to it as soon as an investment as provided in S.107AA of Income Tax Ordinance, 1979 (since repealed) or for that matter under Ss.107 & 107A is made, whereas its adjustment and deduction in computation of tax payable was a matter of assessment proceedings---Right to claim tax credit came into existence with the making of investment in the purchase of plant and machinery and actual deduction from the tax payable was a matter of implementation only---Respondent / taxpayer was fully entitled to adjust available tax-credit from assessment year 2002-2003, which was available under Income Tax Ordinance, 1979, (since repealed) in its return for tax-year 2003, filed and finalized under Income Tax Ordinance, 2001---High Court declined to interfere in the order passed by Appellate Tribunal Inland Revenue---Reference Application was dismissed accordingly. ORDER Through this Reference Application the Applicant department has impugned order dated 28.10.2009, passed in Income Tax Appeal No.475/KB/2009 (Tax Year 2003), by then Income Tax Appellate Tribunal Karachi, proposing the following questions of law: 1. "Whether under the facts and circumstances of the case the learned ITAT was justified in vacating the order framed under section 221 of Income Tax Ordinance, 2001? 2. Whether under the facts and circumstances of the case the learned ITAT was justified in holding that the rectification was made on misinterpretation of legal provisions of the case? 3. Whether under the facts and circumstances of the case…

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