Law: Income Tax Act, 1922

Section: 15BB,15BB(4AA),66(1)

(a) Income tax Act (XI of 1922)---S. 15 BB, sub S. (4 AA) [as inserted by Finance Ordinance (XXI of 1972)] read with Constitution of Pakistan (1972), Arts. 94 & 279 and Post Constitution (P. O. 5 of 1972) Retrospectivity of statutes Finance Ordinance, 1972 being not enacted by National Assembly and having lapsed on expiry of six weeks from date of reassembling of National Assembly, sub S. (4 AA) inserted in S. 15BB by such Finance Ordinance and giving it retrospective operation, held, could not be kept alive by President's Order 5 of 1972 nor could sub S. (4AA) be given retrospective effect, being beyond ambit of Art. 279 of Interim Constitution 1972. From the principles deduced from the case law it is evident that the Legislature has the power to enact curative legislation and to validate' orders/actions, which were not . valid or were without jurisdiction when passed or taken in cases when some proceeding arising from such order or action remains pending. In the instant case the Finance Ordinance XXI of 1972 was enacted during the pendency of the above references/cases containing inter alia enactment of" subsection (4 AA) to section 15 BB of the Income tax Act disentitling the recipients of the dividends from the companies covered under section 15 BB of the Income¬tax Act from the income tax exemption. The above provision was enacted with retrospective effect, i. e. reverting back to the date when section 15 BB was enacted by Ordinance XV of 1959 (with effect on 1-4-1959). The above enactment including subsection (4 AA) was a valid piece of legisla¬tion. If subsection (4 AA) would have held the field with retrospective effect as was originally enacted the. assessment order of the Income tax Officers which are the subject matters of the above references/cases, including the dividends received by the assessees from the companies covered under section 15 BB would have been validated, even if such dividends could not have been included as a part of the income at the time of making of the assessment orders by virtue of the exemption granted under section 15 BB. It may be pertinent to point out herein that a Division Bench of this Court in the case reported in P L…

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