Law: Income Tax Ordinance, 2001

Section: 147,235,FirstSched

(a) Income Tax Ordinance (XLIX of 2001)----Ss. 147, 235 & First Schedule, Part-IV-Constitution of Pakistan (1973), Art.199---Law Reforms Ordinance (XII of 1972), S.3---Electricity bill---Withholding or advance income-tax on electricity bill as a tax on expenditure---Scope---Constitutional petition filed by appellants to declare the imposition of advance income tax or withholding tax on electricity bills harsh and unreasonable was dismissed by Single Bench of High Court---Contention of the appellants in intra-court appeal was that prior to amendment of S.235 of the Income Tax Ordinance through Finance Act, 2008 on 1-7-2008, Rs.2000 were being charged as withholding tax or advance income tax on the electricity bills amounting to Rs.20, 000 or more, however, the bills less than the said amount were chargeable on other percentage, but on account of the change brought in law, the percentage had incredibly been increased---Appellants further contended that withholding tax or advance income tax on electricity bills was a tax on expenditure, rather than the income and the matter did not fall within the Federal/Concurrent Legislative List and, therefore, the competence of the Parliament to impose said tax was confiscatory, harsh, unreasonable and amounted to a double taxation---Validity---Withholding tax or advance income tax was advance nature of the tax on income, which was permissible under the law; it was not a new concept (advance tax) to the income tax regime and was enforced as per the provisions of S.147 of the Income Tax Ordinance, 2001---Advance tax was ultimately founded upon and was embedded in the domain of the income---Advance tax or withholding tax squarely fell in Entry Number 47 of the Federal Legislative List, which had to be given widest possible meaning and amplitude and thus, on account of any misnomer of describing same as an expenditure could not be held to be beyond the legislative competence of the Parliament---Intra-Court appeals were dismissed. State and another v. Sajjad Hussain and others 1993 SCMR 1523; Pakistan Industrial Development Corporation v. Pakistan through the Secretary, Ministry of Finance 1992 PTD 576; Elahi Cotton Mills' case…

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