Law: Income Tax Ordinance, 1979

Section: First Schedule,partIII,Cl.(a)

Income Tax Ordinance (XXXI of 1979)---First Schedule, part III, Cl.(a) (before amendment)---Assessment year 1978-79---Tax liability or tax payable being requirement of working capital would need to be excluded from the total income for the levy of surcharge. The Commissioner of Income-tax v. Pakistan Tobacco Co. Ltd. 1988 PTD 66 fol. JUDGMENT NASIR ASLAM ZAHID, J: -- This is an application under section 136(2) of the Income Tax Ordinance, 1979, filed by the Commissioner of Income Tax, 1979, raising the following questions:-- (i) Whether on the facts and circumstances of the case the Tribunal was justified in holding the application (under section 136(1) of the Ordinance) of the applicant as time-barred? (ii) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified in holding that the tax liability or tax payable is requirement of working capital and therefore, needs to be excluded from the total income for the levy of surcharge? 2. For the assessment year 1978-79, the Income Tax Officer levied surcharge @ 10% on the amount representing tax payable by the respondent for this year. Respondent's appeal was allowed by the Commissioner of Tax (Appeals) as regards the levy of the aforesaid surcharge and the appellate order in this regard was confirmed by the Income Tax Appellate Tribunal in the appeal filed by Department. Reference Application filed by the Department under section 136(1) of the Income Tax Ordinance, 1979, was dismissed by the Tribunal as time-barred. In these circumstances, the Department has filed this application under section 136(2) of the Ordinance. We have heard Mr. Waheed Farooqi for the Department and Dr. Nasim Ahmad Khan for the respondent/assessee. 3. Learned counsel for the parties submitted that this Court may not answer the first question relating to limitation as both parties want a decision on this second question which relates to…

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