Law: Income Tax Act, 1922

Section: 15BB(4AA)

Income-tax Act (XI of 1922)----S. 15-BB (4-AA) (as amended by Finance Ordinance (XXI of 1972)--¬Assessment year 1971-72---Exemption---No penalty could be imposed on the assessee for non-tiling of return of income under S. 34 of the Act on the inclusion of income from dividend received from the company enjoying tax holiday under S. 15-BB---Operation of S. 15-BB (4-AA) could not go beyond 20th December, 1971 and had no retrospective effect. 1982 PTD 130 and 1989 PTD 1245 fol. JUDGMENT NASIR ASLAM ZAHID, ACTG. C. J.---This judgment will govern I.T.R. No.39/86, I.T.R. No.40/80, I.T.R. No.41/86, I.T.R. No.42/86 and I.T.R. tro.43/86. In all these applications filed under section 136(2) of the Income Tax Ordinance, 1979, the applicant is the Commissioner of Income-Tax, Central Zone 'A', Karachi. In I.T.R. No.39/86 the respondent/assessee is Nadeem Zafar, in I.T.R. No.40/86 respondent is Mst. Naseema Mazhar, in I.T.R. No.41 /8f> respondent is Sohail Mazhar, in I.T.R. No.42/86 the assessee is Nusrat Jawed and in I.T.R. No.43/86 respondent is Mst. Sakina Begum. In all these cases the assessment year is 1971-72. 2. In all these cases the respondents have claimed exemption on dividend received from the Tax Holiday Company which was not allowed by the Income-Tax Officer but, on appeal, the Income-Tax Appellate Tribunal allowed the exemption. By Finance Ordinance XX of 1972. section 4-AA was added whereupon the Income-Tax Officer served notices under section 34 and also a notice under section 28 of the Repealed Income-Tax Act 1922 to submit returns but the assessees did not file the returns and in the circumstances the Income-Tax Officer imposed penalty at 2-1/2% of the amount of tax. The assessees preferred appeals before the Appellate Commissioner who reduced the penalty to 1-1/2% of the amount of the tax. The assessees submitted further appeals before the Income Tax Appellate Tribunal and the Tribunal held that in the relevant year i.e. assessment year 1971-72, dividend income was not liable to lax and as…

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