Law: Income Tax Act, 1922

Section: 2(14),7(1),8,14(2),15,15A,15B,15C,15D,15 E,15F,16(1),ThirdSched.,PartI,cl.(ii),48 ,66(1),23(5B),55

Law: Constitution of Pakistan, 1973

Section: 185(3)

(a) Income Tax Act (XI of 1922)------Third Sched., Part I, cl. (ii) & S.48---Constitution of Pakistan (1973), Art.185(3)---Leave to appeal was granted to consider the questions as to whether the High Court was right in holding that assessee was not entitled to refund of his share of super tax paid by the registered firm of which he was a partner in view of the provision of cl. (ii) of Part I of the Third Sched to the Income-tax Act, 1922 read with S.48 and whether in view of S.48 of the Act was there any need to make specific provision for refund in proviso (ii) of Part I of the Third Schedule of the said Act. (b) Income Tax Act (XI of 1922)--- ----S.16(1)(b)---Computation of Income-tax for purposes of proviso (ii) of Part A of Part I of the Schedule to the relevant Finance Act/Ordinance has to be made without reference to S.16(1)(b) of the Act. Commissioner of Income Tax v. Anwaraly Haji Noor Muhammad Civil Appeal No.246-K of 1980 ref. (c) Income Tax Act (XI of 1922)--- ----S.55---Firm---Held, though a firm was not a legal person or a judicial entity but for the purposes of income-tax or super-tax the firm was to be treated as "an entity distinct from the persons who constitute the firm". Watson & Everitt v. Blunden 18 TC 402 (CA); Income Tax Commissioner v. Gibbs 24 TC 221 and Arunachalam Cheetien v. CTT 1936 ITR 173 (PC) ref. (d) Income Tax Act (XI of 1922)--- ----S.55 & Third Sched., Part I, cl. (ii)---Firm while being assessed to super-tax is a distinct assessing unit and even if the partner due to loss in other business suffers an overall loss, it will not reduce the liability of such firm from payment of super-tax on its business in which it has earned profit and gains. Once a firm or individual is treated as assessable entity, the law relating to charge assessment and recovery shall be applied to it/him. In pursuance of section 55 super-tax is levied on a registered firm which has to pay it. Part I of the Third Schedule merely provides the rates of the income-tax and the manner in which it should be calculated. The proviso is applied only to determine the amount of income-tax to be levied. It will not apply to cases or to persons whose income is not…

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