Law: Income Tax Ordinance, 2001

Section: 59AA,59B

(a) Income Tax Ordinance (XLIX of 2001)---Ss. 59AA, 59B, Second Sched., Cls. 103A & 103C---Group relief, benefit of---Petitioners / taxpayers claimed that since Cl. 103A in Second Schedule to Income Tax Ordinance, 2001, in its original form, extended benefit to qualifying entities under Ss. 59AA & 59B of Income Tax Ordinance, 2001, therefore, excising S.59B of Income Tax Ordinance, 2001, therefrom amounted to discrimination---Validity---It was prerogative of Parliament to confer and withdraw fiscal benefits, in the interests of public at large---Petitioners / taxpayer failed to prove any irrevocable entwining of Cl. 103A of Second Schedule with S. 59B of Income Tax Ordinance, 2001---There was no discrimination as the exemption could not subsist during tenancy of S.59B of Income Tax Ordinance, 2001---Certain benefits under S.59AA of Income Tax Ordinance, 2001, were extended to holding companies and hundred percent owned subsidiaries to be taxed as one fiscal unit---No concept of one fiscal unit existed in S. 59B of Income Tax Ordinance, 2001, wherein benefits including surrendering of losses was offered to qualifying holding / subsidiary companies---Upon the anvil of intelligible differentia categorization in each provision was demonstrably mutually exclusive---Petitioners / taxpayer did not have any case for discrimination---Provision of Cl. 103C was added to Second Schedule of Income Tax Ordinance, 2001 vide Finance Act, 2019 and was omitted therefrom vide Finance Act, 2021---During the subsistence of Cl. 103C to Second Schedule of Income Tax Ordinance, 2001, inter-corporate dividends were once again given tax exemption---No exemption under S. 54 of Income Tax Ordinance, 2001 was to be considered in respect of taxation unless provided for in Income Tax Ordinance, 2001---No exemption in respect of inter-corporate dividends was available to petitioners / taxpayers as they had availed benefit of relevant exemption during its tenancy---High Court declined to interfere in the matter as no case was made out to perpetuate the benefit ad infinitum especially post conscious withdrawal of such benefit by the Parliament---Constitutional petition was dismissed, in…

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