Law: Income Tax Ordinance, 2001

Section: 221

Law: Income Tax Ordinance, 1979

Section: 107AA,80D(1)

[Income Tax Ordinance (XLIX of 2001)].....Section 221(1A)---Income Tax Ordinance (XXXI of 1979), Ss. 107-AA & 80-D (1)---C.B.R. Circular 10 of 1960 dated 14-7-1960---Rectification of mistake---Assessments originally completed were rectified on the ground of allowing credit of tax deductions against the tax levied--Subsequently, assessee claimed tax credit under S. 107-AA of the Income Tax Ordinance, 1979 and requested for set off of the same against tax payable under S. 80-D of the Income Tax Ordinance, 1979---Rectification sought was granted by the Taxation Officer and consequently a further order was passed under S. 221 of the Income Tax Ordinance, 2001---Subsequent to passing such order, successor Taxation Officer, was of the view that assessee was illegally allowed set off and having an opinion different from his predecessor, invoked the provisions of S. 221 of the Income Tax Ordinance, 2001 and correct the stated illegality by passing a further order under S. 221 of the Income Tax Ordinance, 2001 reversing the allowed set off---Validity---Firstly, rectification had been made on the basis of change of opinion, secondly, the matter involved difference of interpretation, as in the opinion of predecessor the set off of tax credit was available against tax under S.80-D of the Income Tax Ordinance, 1979, while the successor had a different view; matter related to diversified interpretation of statutory provisions making the issue debatable and arguable and thirdly, First Appellate Authority having directed that set off of tax credit be allowed had hardly any room for the office of lower authorities to interfere with in view of the principle of merger---Action taken under S. 221 of the Income Tax Ordinance, 2001 was unjustified and unlawful and merited vacation---Basic action being illegal, whatsoever shall follow the same shall be unlawful and without jurisdiction---Question whether the tax credit was amenable to set off against tax under S.80-D of the Income Tax Ordinance, 1979 needed not to be discussed---Orders so passed were ordered to be vacated by the Appellate Tribunal being unlawful and without jurisdiction. C.I.T. Companies-II, Karachi v. National…

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