Law:

Section:

(a) Income Tax Ordinance (XXXI of 1979)-------Ss. 2(6), 15(a), 16(2)(a)(iii)(c)(i), 50 & Second Sched. Cls.17, 17(AA), 77---Central Board of Revenue's Circular No.15 of 1997 (Income Tax), dated 6-11-1997---Employees of Banks and Financial Institutions---Introduction of Golden Hand-Shake Scheme giving option to employees to seek retirement voluntarily before attaining age of superannuation on payment of lump sum amounts as compensation for premature retirement/loss of employment or in lieu of salary---Payment of amounts to retiring employees by their employers under such Scheme---Deduction of tax at source by employer while treating such payments as salary---Validity---Terms and conditions of retiring employees by virtue of such Scheme stood modified resulting in termination of their employments on their voluntarily agreeing to retire from service on acceptance of such payments as compensation---Such payments, if not covered or falling within definition of salary, would be deemed to be salary by virtue of provisions of S.16(2)(a)(iii) & (2)(c)(i) of Income Tax Ordinance, 1979, thus, would be liable to be taxed under S.15(a) thereof---Courts would be bound to give effect to deeming provision/legal fiction created by Legislature for bringing such payments within meaning of salary---Every retiring employee would be deemed to be an "assessee" as defined in S.2(6) of Income Tax Ordinance, 1979---Such payments could not be treated as retirement/pensionary benefits to be exempt from tax under cls. 17, 17(AA) & 77 of Second Sched., to Income Tax Ordinance, 1979---C.B.R. through Circular No.15 of 1997 (Income Tax) dated 6-11-1997 did not impose tax on such payments, but apprised concerned persons of provisions of S.16 of Income Tax Ordinances 1979, whereby such payments were to be treated as salary falling within tax net---Principles. Income Tax Commissioner v. E.D. Sheppard AIR 1963 SC 1343 and Commissioner Income Tax, Bengal v. Shawallace and Company AIR 1932 PC 138 ref. Ellahi Cotton Mills Ltd. and others v. Federation of Pakistan through Secretary Ministry of Finance, Islamabad and 6 others PLD 1997 SC 582 rel. (b) Interpretation of statutes---…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492