Law: Income Tax Ordinance, 2001

Section: 4C, 120, 37

             JUDGMENT SHEET                             JAWAD HASSAN, J. This    reference    application     in terms of Section 133 of the Income Tax Ordinance, 2001 (hereinafter referred to as “Ordinance”) has arisen out of order dated 16.06.2025 (the “impugned order”) whereby the Appellate Tribunal Inland Revenue, Division Bench-I, Islamabad (hereinafter referred to as “Tribunal”) proceeded to dismiss the appeal (ITA No.127/IB/2025 (Tax Year 2024) filed by the applicant.  Briefly stated the appellant declared income of Rs.1,147,258,220/- for Tax Year 2024, under the head “capital gains” arising from the sale of ancestral property and the return was deemed to have been finalized under Section 120(1) of the “Ordinance”. Subsequently, the Assessing Officer formed the view that the appellant was liable to pay Super Tax under Section 4C of the “Ordinance” which he failed. Accordingly, a show cause notice dated 28.01.2025 was issued followed by a reminder dated 17.02.2025; however, no compliance was made. Consequently, the department passed order dated 28.02.2025, creating demand of Super Tax amounting to Rs.114,715,822/- on the basis of available record. Being aggrieved, the appellant filed the appeal before the “Tribunal” which was dismissed through the “impugned order”. Learned counsel for the applicant submits that the applicant is not a company rather an individual, merely holding immovable ancestral property and the controversy in hand pertains to levy of super tax on alleged capital gains arising from such immovable ancestral property, which is otherwise exempt under the law. He further submits that the Applicant does not earn any taxable “income” as envisaged under the “Ordinance”; therefore, in the absence of taxable income, the very foundation for the imposition of super tax ceases to exist. He further submits that the…