Law: Income Tax Act, 1922

Section: 15BB(4AA)

Income-tax Act (XI of 1922)---S.15-BB (4-AA)--Scope of S. 15-BB (4-AA)--Dividend income--Exemption from tax--Operation of subsection (4-AA) of S. 15-BB of the Income-tax Act could not go beyond 20th December. 1971 and has no retrospective effect. Commissioner of Income-tax, East, Karachi v. Ebrahim D. Ahmed 1982 P T D 130 ref. JUDGMENT SALEEM AKHTAR, J.--The respondent is one of the Directors of Kohinoor Group of Companies. During the assessment year 1969-70 he derived income inter-alia from dividend earned on shares of a company whose income was exempt under section (15BB) of Income Tax Act till the assessment year 1970-71. The Income-tax Officer, however, added the dividend income of Rs.60,122 to his total income. The respondent challenged this order before the Appellate Assistant Commissioner who allowed exemption from tax on the said dividend income. The department then filed appeal and the Tribunal maintained that order. After the decision of the Tribunal the provisions of section 15-BB were amended and a new subsection (4-AA) was added to that section which provide as follows:- "Nothing contained in this section shall be -deemed to exempt from tax any dividend paid, credited or distributed or deemed to have been paid, credited or disbursed by a company to its share-holders out of the profits or gains exempt from tax under this section." The Income-tax Officer then issued a notice under section 34 of the Income-tax Act, but he did not comply with that notice. The Income-tax Officer then issued notice under section 22, subsection (4) of Income-tax Act whereupon the respondent appeared and objected to the reopening of the case inter alia on the plea that it was barred by time. The Income-tax Officer did not accept this contention and refrained the assessment including the dividend income derived…

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