Law: Income Tax Ordinance, 2001

Section: 122B

SUMMARY

The petitioner challenged the order dated 30.06.2016 passed by the Chief Commissioner (Inland Revenue), whereby the revision application filed under Section 122B of the Income Tax Ordinance, 2001 was rejected. During the hearing, both parties acknowledged that the controversy involved in the case had already been settled by the Court in Income Tax Reference No. 152 of 2016 (Wateen Telecom Limited v. Commissioner Inland Revenue and others) and connected matters. The petitioner argued that the present case was fully covered by that judgment, while the FBR was unable to distinguish the facts or legal issues from the precedent.

The Court examined the record and held that the central issue was whether interconnect payments should be treated as “royalty” or “business income” for tax purposes. Referring to its earlier binding judgment, the Court reaffirmed that interconnect payments do not constitute royalty and are to be treated as business income. Since the issue had already been conclusively decided, the Court declined to re-examine it and disposed of the writ petition in terms of the earlier judgment, directing that the principles laid down in Income Tax Reference No. 152 of 2016 would apply mutatis mutandis to the present case.

ORDER SHEET