Law: Income Tax Ordinance, 1979

Section: 12,12(9A),12(a),62,12(9A),66A&SecondSche d.,Cl.(118C),.6--C.B.R.CircularNo.F.12(9 A)

(a) Income Tax Ordinance (XXXI of 1979)----Ss.12(9A), 66A & Second Sched., Cl. (118C)---Economic Reforms Act (XII of 1992), S.6---C.B.R. Circular No. F.12 (9A) I.T.P./99 dated 16-6-2001---Income deemed to accrue or arise in Pakistan---Inspecting Additional Commissioner directed the Assessing Officer to invoke the provisions of S.12(a) of the Income Tax Ordinance, 1979 considering the assessment framed under S.62 of the Income Tax Ordinance, 1979 as erroneous and prejudicial to the interest of Revenue on the ground that after-tax profits had not been worked out properly---Assessee contended that income being exempt from taxation under Cl. (118C) of the Second Schedule of the Income Tax Ordinance, 1979, he was exempt from other provisions of income tax as per protections of S.6 of the Economic Reforms Act, 1992 and for non-distribution of mandatory dividend he was not liable to action under S.12(9A) of the Income Tax Ordinance, 1979---Validity---Plea of assessee with regard to protection under S.6 of the Economics 'Reforms Act, 1992 was not correct---Clause 118C of the Second Schedule of the Income Tax Ordinance, 1979 provided that income only from the process manufacturing was exempt from the taxation---Section 12(9A) of the Income Tax Ordinance, 1979 was a quite different levy, the said section of law had been inserted to protect the interest of share-holders to pay them their dividend well within time---Question of exemption from levy under S.12(9A)of the Income Tax Ordinance, 1979 did not arise at all in the circumstance---Assessee was supposed to distribute the dividend as per the provision of law---Assessee having failed to do so, action under S.12(9A) of the Income Tax Ordinance, 1979 was justified and reserved of the year under appeal only be subjected to action of taxation under S.12 (9A) of the Income Tax Ordinance, 1979. I.T.As. Nos. 116 to 120/PB of 2002; 2004 PTD (Trib.) 1062; I.T.As. Nos. 2256 and 223(KB); 2004 PTD 1135; Kadnath Jute Manufacturing Co. Ltd. v. C.I.T. 82 ITR 363 SC 1; Kerala Arecant Co. v. C.I.T. 43 ITR 445; C.I.T. v. Royal Boot House 75 ITR 507; Garesh Lal Ram Kumar v. C.I.T. 77 ITR 974; C.I.T. v. New Jehangir vabil Mill Co. Ltd…

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