Law:

Section:

Income Tax Ordinance (XLIX of 2001)--- ----S.122(5A) [as inserted by Finance Act (I of 2003)]---Amendment of assessment---Section 122(5A), Income Tax Ordinance, 2001 brought into the statute through Finance Act, 2003 was not applicable to the assessments completed before the promulgation of Income Tax Ordinance, 2001---Principles. 2005 PTD 1621 and 2005 PTD 1316 ref. JUDGMENT ZIA-UD-DIN KHATTAK, J.---A common question of law being involved, this Tax Reference along with Tax Reference Nos.62 and 63 of 2007 titled `Commissioner of Income Tax (Legal) Regional Tax Officer Peshawar v. Messrs Frontier Sugar Mills and Distillery Limited, Takht Bhai Mardan is disposed of per this single judgment. 2. Briefly, facts of the case are that Messrs Frontier Sugar Mills and Distillery Limited Takht Bhai Mardan (hereinafter called as the respondent-assessee) is a public limited company and derives income from manufacture and sale of sugar. During the years 1999-2000, 2000-2001 and 2001-2002, turn over tax @ 0.5% under section 80-D of the Income Tax Ordinance, 1979 (hereinafter referred to as the `repealed Ordinance') was charged from them and the original assessments for the said 'period were finalized under section 62 of the repealed Ordinance vide orders, dated 17-2-2001, 26-3-2001 and 11-2-2002 respectively. Subsequently, the Additional Commissioner (Audit) Companies Zone, Peshawar found the assessment orders erroneous and prejudicial to interest of Revenue inasmuch as the Assessing Officer had charged turn over tax @ 0.5% on the declared interest income instead of normal rate of 33%. Consequently, a show-cause notice was issued under section 122(5A) of the Income Tax Ordinance, 2001 (hereinafter referred to as the `Ordinance') and served on the assessee. In response, the respondent-assessee submitted a written reply and explained that the provision of, section 122(5A) of the Ordinance as a new law could not be applied to assessments of any period prior to the date of its coming into force i.e. 1-7-2003. The reply of the respondent-assessee was considered but found unsatisfactory and the Additional Commissioner (Audit), Peshawar vide order, dated 2-2-2006 amended/revised the…

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