Law: Income Tax Ordinance, 2001

Section: 120A

INCOME TAX CIRCULAR NO. 8 OF 2008, DATED 8-8-2008.....Amendment brought through Circular No. 8 of 2008 was of substantive, nature and it could not apply retrospectively.--FBR through Circular No. 7, dated 19th July, 2008 clarified that scheme is applicable to all undisclosed assets/income which somehow or the other could not be disclosed and remained unexplained and that cases are pending in appeal or raised/detected by the department would be dealt under normal law and not under specific provisions of scheme. The second deviation took place when the FBR issued Circular No. 8 of 2008 whereby the scheme was restricted so as to exclude pending cases before the department, appellate authority or any Court, thus, the state of law was changed. We are of the view that amendment brought through the referred circular is of substantive nature thereby restricting the scope of the original scheme and the state of law stood changed from the said date effecting the right and liabilities of those who have acted upon the scheme in good faith under its original scope. Therefore, Circular No. 8 of 2008 cannot apply retrospectively and show-cause notices are stand vacated. INCOME TAX ORDINANCE, 2001.......Section 120-A......Vested right has accrued in favour of the petitioner, the moment he had filed declaration in pursuance to Circular No. 3 of 2008, the subsequent amendment in the original scheme cannot be given retrospective effect by a subsequent act of department.--The question that whether a vested right has accrued in favour of petitioner and if so can be taken away through subsequent circular by applying the same retrospectively. It was held by this Court in the case of Army Welfare Sugar Mills that if an exemption from payment of excise duty or any other tax has been granted for a specified period on certain conditions and a person who fulfills those conditions, acquires a vested right. So it can be said that vested right had accrued in favour of the petitioner the moment he had filed declaration in pursuance to Circular No. 3 of 2008. It was held by this Court in case of Al-Samrez Enterprises that an enactment which prejudicially affected vested rights or the legality…

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