C O N T E N T S
INCOME TAX––CASE-LAW
(SUPREME COURT—JUDGMENTS)
A
1. Additional assessment—"Definite information"
2. Additional payment for delayed refunds
3. Additional payment or compensation for delayed refund
4. Advance income tax on import of raw material/machinery meant for "PATA"
5. Agricultural Income Tax—Recovery
6. Agricultural Income Tax
7. Amend such original assessment order
8. Amendment of assessment by addition to accumulative wealth of tax payer
9. Amendment of deemed assessment order
10. Amendment of deemed assessment order on basis of 'definite information'
11. Amendment of original (deemed) assessment order
12. Amendment of original assessment order—Pre-requisites
13. Amount was recoverable from the Provincial Government
14. Appeal before the Appellate Tribunal (Inland Revenue)
15. Application for restoration of the Tax Reference/Application—limitation for
16. Assessment order
17. Assessment—amendment of
18. Attachment and auction of property by tax department
19. Automatic selection for audit
20. Automatic selection for audit—Commissioner granting an extension:
B
21. Bad debts—Writing off
22. Best judgment assessment order under section 121(1)(d) of the Income Tax Ordinance, 2001
23. Best judgment assessment order
24. Books of account—documents and records to be maintained for a period of six years
25. Business transacted between the resident and non-resident
C
26. Capital gains tax on sale of immovable property
27. Carry forward of business loss incurred during tax holiday period
28. Cash purchase and/or purchase of raw material
29. Charge of additional tax for failure to pay tax or penalty
30. Claimed by a taxpayer
31. Commissioner serving notice to tax-payer under S. 122(5A) of Income Tax Ordinance 2001, to amend such original assessment order
32. Compensation was to be regarded as a Capital or Revenue
33. Computation of income—Exceptions
34. Concealment of business income from sales
35. Constitutional petition filed directly before the High Court
36. Constitutional petition
D
37. Deductible expenses—Depreciable assets
38. Deduction of advance tax
39. Deductions not allowed in computing income
40. Definite information with regard to tax evasion
41. Definite information within the meaning of S. 122(5) of the Income Tax Ordinance, 2001
42. Definite information
43. Definite information—Additional assessment
44. Detection of evasion of tax
45. Delegation of authority by the Commissioner of such power to the Deputy Commissioner
46. Delegation of power under section 122(5A) of the Income Tax Ordinance, 2001 ('the Ordinance')
47. Depreciation allowance—"Factory" or "workshop"
48. Determination of all questions of law
49. Disqualification from membership of National Assembly
50. Dividend in specie—Income liable to tax
E
51. Encashment of bank guarantee for breach of contract by the assessee
52. Exemption from customs duty—sales tax and with-holding tax
53. Exemption from payment of minimum tax
54. Exemption from tax under the domestic tax regime of Pakistan
55. Exemption from tax
56. Exemptions from total income
57. Explanation introduced in Section 111 of the Income Tax Ordinance, 2001 ('Ordinance') pursuant to the Finance Act, 2021
F
58. Failure to deduct and collect withholding tax
59. Failure to deduct tax—Show cause notice
60. Failure to make timely payment
61. Failure to pay tax collected or deducted
62. Federal Public Service Commission—role of
63. Finance/loan agreement—Mark-up accrued
64. Findings of fact recorded by the Appellate Tribunal and High Court under various tax statutes
65. Fine/penalty imposed for violation of a law
66. Fixed tax regime
67. Frivolous litigation by tax Department
I
68. Immoveable property in the name of an offshore company
69. Income chargeable to tax
70. Income from business or Income from other sources—determination of
71. Income from business or profession
72. Income from business—computation of
73. Income from business—computation of
74. Income from business—Deductible expenses
75. Income from transactions with non-resident
76. Income liable to tax
77. Income on account of supplies made to a company
78. Income Tax refund—claim for
79. Inadmissible adjustment of Input Tax
80. Interest earned by financial institutions on Government securities
J
81. Judgment of High Court
82. Judgment of the Supreme Court as 'definite information'
L
83. Leave to appeal was granted by Supreme Court
84. Liability to pay income tax
M
85. Method of accounting for computation of income
86. Minimum tax liability
87. Minimum tax liability—"Turnover"
88. Misuse of office to exercise influence over government officials
89. Mixed question of fact and law
N
90. National Funds Bonds—Interest income
91. National Savings Center located in erstwhile Federally Administered Tribal Area (FATA)
92. Non-resident foreign company—Exemption from income tax
93. Notice issued under S. 122(5A) of Income Tax Ordinance, 2001 for amendment of assessment order—Limitation period
94. Notices issued by the tax department
95. Notification S.R.O. No.977(I)/2011 dated 19.10.2011
O
96. Obligation on industrial establishments to contribute towards the Workers' Welfare Fund
P
97. Payment for goods and services
98. Payment of tax on income from salary
99. Payment received in 'advance' by assessee for the sale and supply of goods
100. Permissible deductions falling within the purview of S. 23(1)(xviii) of the Income Tax Ordinance, 1979
101. Plea bargain—acceptance of
102. Power of High Court to convert review petition into an application for correction of clerical error
103. Power of the Commissioner to amend an assessment order
104. Presidential reference against a judge of the Supreme Court
105. Presumptive tax regime
106. Presumptive tax/deemed income tax
107. Processing 'definite information' through use of a scientific or mathematical formula to determine correct tax liability
108. Provincial Government tender for supply of imported tractors
109. Provincially Administered Tribal Areas ("PATA")
110. Provisional assessment order made by the Commissioner
111. Purposive construction of provisions of a taxing statute
Q
112. Qualification for membership of Parliament
R
113. Receipt of income subject to 'Presumptive Tax'
114. Rectification of mistake
115. Rectification of mistake—Notices issued
116. Reference before High Court
117. Reference to the High Court—Limitation
118. Reference before High Court
119. Rendering of labour and carriage services
120. Rescission of transaction on the ground of mistake
121. Resident of a Provincially Administered Tribal Area adjoining Mansehra District (the 'said tribal area')
122. Retrospective effect of amended S. 239(1) of Income Tax Ordinance, 2001
123. Retrospective effect
124. Right to privacy—Surveillance
S
125. Saving and investment schemes—Deduction of withholding tax
126. Section 239(1) of the Income Tax Ordinance, 2001 as a saving clause
127. Services rendered pursuant to execution of a contract
128. Show cause notice
129. Show cause notices issued under the Sales Tax Act, 1990—the Federal Excise Act, 2005 and the Income Tax Ordinance, 2001
130. Suit for recovery of advance income tax and sales tax paid by the supplier on import of tractors
T
131. Tax authority impugning judgment of High Court
132. Tax credit for replacement—balancing and modernisation of machinery or plant
133. Tax Officer alleged to have acted unlawfully
134. Tax on income of certain persons from dividends and bank profits, etc.
135. Tax payable—Meaning
136. Tax Reference/Application filed before the High Court under S.133(1) of the Income Tax Ordinance, 2001
137. Tax refund—Due date
138. Taxable income—Exemption
139. Taxpayers falling with in domain of 'normal tax regime' and 'final tax regime'
140. Transaction by assessee
141. Turnover—calculation of Presumptive Tax
142. Turnover—calculation of
U
143. Unexplained income or assets—Amendment of an assessment
144. Unsold improved land—Structural improvements
145. Unwithdrawn salary
W
146. Whether principal-agent relationship
147. Workers Profit Participation Fund (WPPF). Amount transferred by a company to the WPPF
Z
148. Zakat—exemption from—Pre-requisites
_______________
INCOME TAX––CASE-LAW
(HIGH COURTS—JUDGMENTS)
A
1. Account registers—non-maintaining of
2. Accounting on cash/accrual basis
3. Additional evidence—production of
4. Additional tax—charging of
5. Adjudication to determine whether tax was chargeable on receipt of revenue/fee by taxpayer
6. Adjustment of excess amount of tax paid
7. Advance Income Tax—collection of
8. Advance Income Tax—Industrial undertaking—Determination
9. Advance Tax
10. Advance tax as estimate to be made by taxpayer
11. Advance tax at time of sale by auction
12. Advance tax deductible on electricity consumption
13. Advance tax on brokerage and commission
14. Advance tax paid in quarterly installments
15. Advance tax—Liability to pay advance tax
16. Advertising agency commission
17. Allowable deduction
18. Allowance of perquisites paid by certain corporations
19. Alternate dispute resolution—Recovery notice
20. Alternate remedy available in the statute
21. Amalgamation of Banking companies
22. Amended assessment order—Limitation
23. Amendment in assessments 112
24. Amendment in assessments—Further amendments 113
25. Amendment in law—Retrospective effect 113
26. Amendment in rates of tax on capital gains on disposal of securities vide Finance Act, 2016 114
27. Amendment in tax return 114
28. Amendment of assessment 115
29. Amendment of assessment—Opinion already formed 117
30. Amendment of assessment—Pre-conditions 117
31. Amendment of assessment—Rectification of mistake 118
32. Amendment of assessment—Refund 119
33. Amendment of assessment—retrospective effect 119
34. Amendment—vires of 120
35. Amounts subsequently recovered in respect of deductions, etc. 121
36. Annual statement of tax collected or deducted 121
37. Anti-tax avoidance—Recharacterisation of income and deductions 122
38. Appeal Effect Order—non-issuing of 122
39. Appellate Tribunal Inland Revenue—Coram non-judice 122
40. Appellate Tribunal Inland Revenue—Judicial Member—appointment of 123
41. Applying the provision of Public Notice No.03/2014(A) dated 25-06-2014 123
42. Appointment of Chairman Appellate Tribunal 124
43. Arm's length—principle of 125
44. Assessee a public limited company 125
45. Assessee deriving income from dairy products 125
46. Assessee in default—Determination 126
47. Assessment and penalty proceedings 126
48. Assessment giving effect to an order 127
49. Assessment of income—Income of Banking Company 127
50. Assessment on basis of return 128
51. Assessment order—Amendment 128
52. Assessment order—setting aside of 129
53. Attachment of Bank accounts allegedly used for money laundering 129
54. Attachment of property—Misuse of authority 130
55. Audit and adjudication—Distinction 130
56. Audited accounts of the company 130
57. Audit—Scope and significance 131
58. Audit—Selection for 131
59. Authorities were aggrieved of direction issued by Appellate Tribunal to Commissioner (Appeals) 132
60. Authority of Income Tax Appellate Tribunal 132
61. Automatic selection of audit under S.214D of the Income Tax Ordinance, 2001 132
62. Avoidance of Double Taxation Treaty—Offshore company 133
B
63. Bad debts—Pre-condition 133
64. Banking Company and Investment Bank—Distinguished 134
65. Benefit of SRO 1213(I)/2018 dated 05.12.2018 134
66. Best judgment assessment—Amendment of assessment 135
67. Binding effect of explanations to provisions supplied by Legislature 136
68. Bonus shares—Income Tax on 136
69. Business expenditure—Corporate assets tax 137
70. Business relation—Determination 138
C
71. Calculation of cash withdrawal and tax deduction 138
72. Capital gain on disposal of securities 139
73. Capital gain tax on disposal of securities 139
74. CBR Circular No.1 of 2005 (Income Tax), dated 5-5-2005 139
75. Chairperson/members of the Appellate Tribunal 140
76. Charge of agricultural income tax on basis of income tax return 141
77. Charge of tax and default surcharge—Time for payment of tax 142
78. Charge of Tax on interest on securities 142
79. Charging of such fund from net profit 143
80. Charitable institution—affairs of 143
81. Circular No. 4—dated 02.04.2011 144
82. Civil Court—jurisdiction of 144
83. Coercive measures—Mechanism—Redressal of grievance 145
84. Collection of advance tax on the amount of electricity bill 145
85. Collective audit of several years 146
86. Commercial basis—meaning of 146
87. Commissioner and Federal Board of Revenue—jurisdictions of 146
88. Commissioner and Federal Board of Revenue—powers of 147
89. Commissioner Income Tax—Jurisdiction 147
90. Complaint against non-issuance of income tax refund 149
91. Completion of proceedings—Time frame 150
92. Compounding of offence—Principle 150
93. Computation of advance tax payable by taxpayer 150
94. Condonation of delay 151
95. Confiscation of transit goods, restoration of 152
96. Constitutional jurisdiction 153
97. Constitutional Jurisdiction of High Court 153
98. Constitutional petition 153
99. Constitutional petition challenging issuance of show-cause notices by Revenue department 154
100. Constitutional petition—Alternate remedy 154
101. Constitutional petition—Maintainability 155
102. Constitutional petition—Stay of recovery 155
103. Constitutional petition—Tax due 156
104. Constitutional petition—Tax notice 156
105. Convention for avoidance of Double Taxation 157
106. Courts to try all Civil suits unless barred 158
107. Customs department—role of 158
D
108. De facto doctrine—applicability 158
109. Decision of appeal—Limitation 159
110. Declared income—rejection of 159
111. Deduction for depreciation as initial allowance 159
112. Deduction of advance Income Tax Ss. 53, 150, 151, 159, Income Tax Ordinance, 2001 160
113. Deduction of advance tax at source 161
114. Deduction of tax 162
115. Deductions in computing income chargeable under head "Income from Business" 163
116. Deductions not admissible 163
117. Default surcharge—Mens rea 164
118. Definite information—Amendment of assessment 164
119. Delay in enforcing the right 165
120. Delegation of power by Commissioner Inland Revenue to Additional Commissioner Inland Revenue 166
121. Departmental powers for computation and assessment of "advance tax" liability of taxpayer 166
122. Depletion allowance—calculation of 166
123. Depreciation allowance—Association of Persons 167
124. Directorate of Intelligence and Investigation (I&I)—Inland Revenue—Status 167
125. Disclosure of information by a public servant 168
126. Disclosure of total income of relevant tax year 168
127. Discrimination—Intelligible differentia 169
128. Disposal of Appeals by Income Tax Appellate Tribunal 169
129. Dispute was with regard to payment of additional refund 170
130. Doctrine of "structuring discretion" 170
131. Doctrine of mutuality—application of 171
132. Double taxation 171
133. Duties of Recovery officials 171
E
134. Enhancement of fee for filing appeal before Appellate Tribunal 172
135. Evasion of sales tax and income tax 172
136. Exemption certificate 173
137. Exemption Certificate—Recovery of tax 173
138. Exemption from duty and taxes—Applicability 174
139. Exemption from Income Tax 174
140. Exemption from specific provisions 175
141. Exemption from tax under the domestic tax regime of Pakistan 176
142. Exemption from tax—Final Tax Regime Ss. 18(1)(a), 122, 133, 153(1)(c), 169, Income Tax Ordinance, 2001 176
143. Exemption of certain public property from taxation 177
144. Exemption of certain public property from taxation 177
145. Exemption of lower rate certificate 177
146. Express delegation of authority 178
147. Expression "full and free access" 178
F
148. Factual controversy—Tax deduction 179
149. Failure to deduct or pay tax—Liability of person 179
150. Failure to pay tax collected 179
151. Failure to pay tax collected or deducted Obligation of Department and taxpayers 180
152. Fait accompli—principle of 182
153. FBR Circular No. 15 of 1997 dated 06.11.1997 183
154. FBR Circular No.2 of 2012, dated 27-7-2012 183
155. Federal Government—powers of 184
156. Federal Board of Revenue—Provisions of notification SRO No.509(I)/2013, dated 12.6.2013 185
157. Filing of Incomplete Return 185
158. Filing of revised return by taxpayer during assessment proceedings 186
159. Final Tax Return—Turnover 186
160. Foreign Income and Assets Statement 187
161. Foreign supplies and local services—Pakistan-source Income 187
162. Furnishing of annual statement of tax collected or deducted 188
G
163. General power to exempt from customs duty 188
164. Grant of tax rebate in Income Tax on salary 189
165. Gratuity—payment of 189
166. Group relief—benefit of 190
H
167. High Court Reference 191
168. High Court—exercise of jurisdiction 191
169. Holding period—absence of 192
I
170. Ignorance of law and fact 192
171. Import of a vehicle under a fake Proceed Realization Certificate (PRC) 192
172. Import of drugs for personal use 193
173. Imposing of conditions through Circulars 193
174. Inaction of authorities 193
175. Inadmissible expenditures 194
176. Income from profession 194
177. Income from business 194
178. Income from business/Income from other sources 195
179. Income from other sources—Interest Income 196
180. Income of trust—Tax exemption 196
181. Income tax and Sales Tax—Distinction 197
182. Income Tax provisions in relations to persons and association of persons 197
183. Income Tax return—finality of 197
184. Income tax—exemption from 198
185. Industrial undertaking—Connotation 198
186. Information available in audited accounts 199
187. Inquiry and investigation—Non-framing of rules 199
188. Inquiry and investigation 200
189. Interest free loan to employees 200
190. Interest free loans by directors of company—Nature 200
191. Interest on Bank deposits—as "income from other sources" 201
192. Interest on securities—Charging of tax 201
193. Interim injunction—grant of 202
194. Interim order in tax or revenue matters 202
195. Interpretation of Ss.138EE, 138C, & 138D of the Income Tax Ordinance, 1979 202
196. Intra-Court Appeal—Maintainability 203
197. Investment in profit bearing schemes—Income Tax deduction certificate 203
198. Investment of Workers' Profit Participation Fund 204
J
199. Judicial Member—appointment of 205
200. Jurisdiction of Civil Court—bar on 205
201. Jurisdiction of Commissioner 205
202. Jurisdiction of High Court 205
203. Jurisdiction of Income Tax Authorities 207
204. Jurisdiction of Inland Revenue 207
205. Jurisdiction—Selection for audit 208
L
206. Lease Rental Income 208
207. Liability of Income Tax on statutory bodies/entities S.49, Income Tax Ordinance, 2001 208
208. Limitation for assessment 209
209. Loan to employees—Factual controversy 209
M
210. Maintenance of record by taxpayer 210
211. Mala fide—proof of 210
212. Maladministration 211
213. Maxim Absoluta sentential expositore non indigent—Applicability 211
214. Meaning of the words "consumer goods" for purpose of benefit of reduction in tax liability 211
215. Merger of Tribal Areas into settled areas 212
216. Merger—doctrine of 212
217. Method of accounting and accrual-basis accounting 213
218. Minimum Tax 213
219. Minimum Tax on Income of certain persons 214
220. Minimum tax on turnover 214
221. Money laundering—Investigation—Predicate offence 215
N
222. Nature and meaning of term "definite information" 216
223. Nature of "super tax" and distinction of "super tax" from fee/cess 216
224. Nature of and distinction between—jurisdiction of Appellate Tribunal 217
225. Nature of jurisdiction of High Court 218
226. Nature—Selection for audit 218
227. Nomination papers—acceptance of 218
228. Non-framing of rules 219
229. Non-issuance of show-cause notice 219
230. Non-mentioning of reasons 219
231. Non-registration of gift declaration 220
232. Non-Resident status—determination of 220
233. Non-submission of statement of net assets and tax return 221
234. Non-taxability/chargeability of funds for purchase of property/assets in Pakistan 221
235. Notice for furnishing return of total income 222
236. Notice to obtain information or evidence 222
237. Notice—issuance of 223
238. Notification No. F. No. 3(5)/2014/F.II-GBC dated 04.01.2018 224
239. Notification No. SRO 208(I)/98, dated 31-3-1998 224
240. Notification No. SRO 608(I)/2014 dated 02.07.2014 225
241. Notification S.R.O. No. 1213(I)/2018 dated 05.10.2018 225
242. Notification S.R.O. No. 678(I)/2004, dated 7-8-2004 226
243. Notification SRO No.115(I)/2015 dated 09.02.2015 226
244. Notification SRO No.1213(I)/2018 dated 5-10-2018—Tax relief 227
245. Notification SRO No.57(I)/2012, dated 24-01-2012 228
246. Notifications SRO No.1212(I)/2018 dated 5-10-2018 & SRO No.1213(I)/2018 dated 5-10-2018 228
247. Notifications SRO No.1213/2018, dated 5-10-2018 229
O
248. Object—purpose and scope 230
249. Order passed in appeal beyond the prescribed statutory period 230
250. Original order—revision—Inspecting Additional Commissioner 231
P
251. Particulars of registration—change of 231
252. Payment of tax before assessment 232
253. Payments for goods and services 232
254. Payments made to associated companies/undertakings 235
255. Payments to non-residents 236
256. Pecuniary jurisdiction of Assistant Collector 236
257. Penalty and surcharge—recovery of 237
258. Penalty for concealment of income—Mens rea 237
259. Penalty—imposition of 238
260. Persons holding money on behalf of taxpayer 238
261. Petitioner challenged the income tax/sales tax—etc reflected in his electricity bills 239
262. Petitioners/taxpayers were aggrieved of selection of their cases for Audit 239
263. Phrase "other than power of delegation" 240
264. Power of Commissioner to conduct audit and issue amended assessment order 240
265. Power of entering and searching premises of tax-payer 241
266. Power to enter and search premises 241
267. Powers of Inspecting Additional Commissioner 242
268. Pre-condition for selection—Self-assessment 243
269. Prerequisites for application of S. 79 of the Income Tax Ordinance, 1979 243
270. Prescribed form of appeal to the Commissioner (Appeals) 244
271. Prior approval of Federal Board of Revenue 244
272. Prior permission of direction of Federal Tax Ombudsman non-seeking of 245
273. Privileged information—Fishing inquiry 245
274. Procedure and verification by department 246
275. Procedure to be adopted under S.111 of the Income Tax Ordinance, 2001 246
276. Profit margin—Determination 247
Q
277. Quantum of loss—determination of 247
278. Quashing of FIR 248
279. Question of law 249
R
280. Rate of tax on capital gain—Determination 250
281. Reasonable classification—principle of 250
282. Re-assessment beyond period of limitation 250
283. Re-assessment—Extension in time 251
284. Recharacterisation of Income and Deductions 251
285. Record—maintenance of—Limitation 252
286. Records—information collection and audit 253
287. Recovery of Government Dues 254
288. Recovery of Income Tax and Sales Tax by Customs officer(s) 254
289. Recovery of Income Tax liability 254
290. Recovery of tax due—Coercive measures 255
291. Recovery of tax out of property and through arrest of taxpayer 255
292. Recovery—Refund—determining of 256
293. Rectification of mistake 256
294. Rectification—powers of 258
295. Reference to High Court 259
296. Reference under S. 133 of the Income Tax Ordinance, 2001 262
297. Reference—"Incurred But Not Reported" claims 262
298. Reference—Default surcharge 262
299. Reference—Jurisdiction of High Court—Factual dispute 263
300. Reference—New plea 263
301. Refund—Compensation 263
302. Refund—issuance of 264
303. Refund—Procedure 264
304. Refunds—Coercive measures 264
305. Relevant Tax year for assessment of such Tax 265
306. Remand order—Partial decision 266
307. Re-opening of case 266
308. Repayment of loans 266
309. Requirement of filing statement of withholding tax 267
310. Retrospective effect of such amendment 267
311. Retrospective effect—Property rights 268
312. Retrospectivity of statute—Applicability 268
313. Return of Income and Statement—Distinction 269
314. Revenue justifying tax claim entitlement of taxpayer 269
315. Revised return of total income 270
316. Revised return—filing of 270
317. Right of individuals to be dealt in accordance with law 271
318. Rules for the Computation of Depreciation Allowance 271
S
319. Sales tax at import stage—Exemption from income tax 272
320. Scope of power of Commissioner to conduct audit 272
321. Seeking information from assesse 273
322. Selection and conduct of audit 273
323. Selection for audit—Amendment in law 274
324. Selection for audit—Calling of books of accounts 274
325. Self Assessment Scheme—Notice to provide information 275
326. Self-executing provisions 275
327. Separate notice—issuance of 276
328. Share profits of company to be added to taxable income 276
329. Shifting of onus—principle of 277
330. Show cause notice 277
331. Show-cause notice to taxpayer 278
332. Show-cause notice—issuance of 279
333. Show-cause notice—Tax not paid 280
334. Slump transactions—concept of 281
335. Special judicial allowance 281
336. Special provisions relating to insurance business 282
337. Special tax year 282
338. Statements/records—production of 282
339. Statutory exemption from income tax provided to Federal Bank for Cooperatives 283
340. Statutory right of appeal—decision of 284
341. Statutory sanction to benefit of Avoidance of Double Taxation Treaties 285
342. Stay of recovery—Duration 285
343. Subsidy granted by Federal Government 286
344. Suit for dissolution of partnership—rendition of accounts and injunction 286
345. Super tax for rehabilitation of temporarily displaced persons 286
346. Super tax—levy of 289
347. Super tax—Tax return—filing of 289
348. Suspension of judgment passed by High Court 289
T
349. Tax at source—non-deduction of 290
350. Tax collected at import stage—Nature 290
351. Tax credit for charitable organizations 291
352. Tax credit—claim of 291
353. Tax exemption at import stage—Principle 292
354. Tax exemption for new entity 292
355. Tax exemption—'Adventure in nature of trade' 293
356. Tax exemption—Welfare activity 293
357. Tax liability—recovery of—Time frame to fulfill liability 293
358. Tax on undistributed profit 294
359. Tax on undistributed profits of public limited companies 294
360. Tax payable—meaning of 294
361. Taxable income—"Adventure in nature of trade" 295
362. Taxable salary—Rates of tax 295
363. Taxable services and economic activity under Sindh Sales Tax on Services Act, 2011 295
364. Taxes—exemption from 296
365. Tax—imposition of 297
366. Temporary injunction granted/extended beyond the subject-matter of appeal 297
367. Temporary relief to taxpayer from coercive measures/recovery of disputed income tax amount 297
368. Term "Finance Certificate" 298
369. Term 'incidental'—Object and scope 298
370. Term 'matter of public importance'—Applicability 299
371. Terms "Income year" and "assessment year" 299
372. Taxable activity—Tax Fraction Formula 300
373. Textualism—doctrine of—Applicability 300
374. Trust—entitlement of 301
U
375. Undue hardship—non-pleading of 301
376. Unexplained income or assets 301
V
377. Vires of law 303
W
378. Winding up as a 'last resort' 304
379. Withholding of deed by Registration authorities 304
380. Withholding of income tax on payments to non-residents—nature of 304
381. Withholding tax—collection of 305
382. Word "taxes"—Re-assessment of taxes 305
383. Workers' Welfare Fund—"Tax" or "fee" 306
384. Working Interest—sale of—Taxable income 306
________________
INCOME TAX––CASE-LAW
(TRIBUNALS—JUDGMENTS)
A
1. Addition made on account of short term loan obtained from Bank 317
2. Addition of un-explained income in income chargeable to tax 318
3. Addition on account of non-deduction of withholding tax from salary and prerequisites 318
4. Additions in income in respect of unearned Finance Lease 319
5. Adjudication proceedings for short/paid sales, income tax and federal excise duty 320
6. Adjustment of sales tax liability against income tax refund 320
7. Advance tax at the time of sale by auction 321
8. Advance tax—collection of 321
9. Allocation of expenses to property 322
10. Allowance solely expended in the performance of the employee's duties of employment 322
11. Amendment of assessment 322
12. Amendment of assessment with certain additions 329
13. Amendment of assessment—"Definite information" 330
14. Amendment of assessment 330
15. Amendment of assessment—Condemned unheard 332
16. Amendment of assessment—'Definite information' 332
17. Amendment of assessment—Exemption 332
18. Amendment of assessment—Interpretation applicability 333
19. Amendment of assessment—Limitation 334
20. Amendment of assessments—Failure to produce record 337
21. Amendment of assessment—Unexplained income or assets 337
22. Amendment of Income Tax Return 338
23. Appeal with application before Appellate Tribunal 339
24. Appeal—pendency of 339
25. Appearance by authorized representative 340
26. Appellate Authority—jurisdiction of 340
27. Application for designation as a group 341
28. Application for rectification of order passed by Appellate Tribunal 341
29. Apportionment of common expenses to income under Final Tax Regime (FTR) 341
30. Assessment and rectification—Principle 342
31. Assessment giving effect to an order 343
32. Assessment of tax and recovery of tax not levied or short levied or erroneously refunded 344
33. Assessment order—amendment of 344
34. Assessment order—modification of 345
35. Assessment order—revision of 345
36. Assessment order—unexplained delay in 346
37. Assumption of jurisdiction by Customs Authorities in for sales tax and withholding tax matters 346
38. Audit—selection of case 346
B
39. Bad debt—deletion of 347
40. Benefit of reduced rate of taxation on 'dividend income'—claim for 347
41. Best judgment assessment 348
42. Business assets 349
C
43. C.B.R. Circular No.3 of 2008 dated 1-7-2008 350
44. Charge of withholding tax on the gross amounts of expenses claimed 350
45. Chargeable to tax—Revision of wealth statement 351
46. Charging minimum tax on declared dividend income and on profit on debt 351
47. Charging of turnover minimum tax 352
48. Charging to tax of unexplained income or assets under head of "income from other sources" 353
49. Claim for deduction—Failure to produce record 353
50. Claim for refused 353
51. Clarification issued by FBR No.1(ii)STR/2004 dated 14-4-2005 354
52. Collection of advance tax at the time of sale by auction 355
53. Collection of Sales Tax and Income Tax by Customs authorities 355
54. Collection of taxes on imported goods by Customs authorities 356
55. Commissioner Inland Revenue—jurisdiction of 356
56. Company deriving income from telecom and broadband services 357
57. Complaint against non-issuance of income tax refund 357
58. Computation of "net income'/"total income" chargeable to tax 358
59. Concept of 'ring fencing' and 'one basket' 359
60. Condition 'subject to this section' 359
61. Connotation—Profit on debt 359
62. Customs Rules, 2001, R.438. SRO No. 500(I)/2009, dated 13.06.2009 360
63. Customs value—determination of 360
D
64. Debt—Defined and explained 361
65. Decision in appeal 361
66. Decision of Income Tax Authorities 362
67. Declaration and assessment for home consumption or warehousing 362
68. Declaring an assessee in default—Limitation 363
69. Declaring lease—rentals under the head 'income from other sources' Ss. 21(c), 40(1)(3), 122(5-A) & 131, 363
70. Deduction of short paid Income Tax 364
71. Deduction of tax at source—Rectification of mistake 364
72. Deductions in computing income chargeable under the head "income from business" 365
73. Deductions not allowed 365
74. Deductions not allowed—Failure to pay tax collected or deducted 365
75. Default surcharge—levy of 366
76. Definite information non-availability of 366
77. Definite information—Scope 367
78. Deletion of the disallowance of encapsulation charges 368
79. Demand orders in piecemeal in respect of a tax year and passing of orders before completion of the tax year 368
80. Department, on taxpayer's failure to deduct withholding tax—created a certain tax demand 368
81. Depreciation against income from lease rentals 369
82. Depreciation allowance/expenditure—Concept 369
83. Determination of Sales Tax liability 370
84. Directorate General Inspection—establishment of 371
85. Directorate General of Intelligence and Investigation 372
86. Directorate General of Post Clearance Audit—Jurisdiction 372
87. Directorate General of Post Clearance Audit 373
88. Disallowance of unrealized exchange loss 373
89. Disallowing the expenditures—Making addition in income of taxpayer 374
90. Disposal of appeal by Appellate Tribunal 374
91. Double taxation—Non-resident 375
E
92. Ejusdem generis—principle of 376
93. Erroneous sections of law invocation of 376
94. Error apparent from the record—Debatable issue 377
95. Ex parte provisional assessment—Unexplained Income 377
96. Examination of imported goods—Confiscation of goods 377
97. Exemption from payment of customs duty and taxes 378
98. Exemption from Sales Tax and Income Tax 378
99. Exemption from total income—Allowances 379
100. Exemption of tax 379
101. Exemption or lower rate certificate 379
102. Exercising jurisdiction corresponding to taxes 380
103. Expenditure incurred on account of royalty 380
104. Expression "mistake apparent from the record" 381
105. Expression 'Subject to this section' 381
F
106. Failure to establish mens rea 381
107. Failure to file wealth statement 382
108. Failure to furnish a return or statement—Imposition of penalty 382
109. Failure to furnish a return within due date 383
110. Failure to furnish statement—No revenue loss 384
111. Failure to make deduction of withholding tax 385
112. Failure to pay tax collected or deducted 385
113. Failure to pay tax collected or deducted 386
114. Fair market value 388
115. Fast moving consumer goods 388
116. Federal Tax Ombudsman—jurisdiction of 389
117. Filing monthly statement manually—instead of electronically 392
118. Filing of Income Tax returns 392
119. Filing of tax returns—Taxpayers identifier 395
120. Filing return of income—Best judgment assessment 396
121. Framing of fresh assessment on remand of case 396
G
122. Grant of stay of recovery of tax demand by Appellate Tribunal 397
123. Ground of appeal—not set out in memo of appeal 397
I
124. Importer—submitted goods declaration 398
125. Imposition of penalty for failure to furnish return of statement 398
126. Imposition of penalty for failure to submit a return or statement 399
127. Imposition of penalty 400
128. Income declared treated as assessment 400
129. Income from business and other sources 401
130. Income from business and other sources—Profit on debt 401
131. Income from business—Income from other sources 402
132. Income Tax and Sales tax—recovery of 402
133. Income Tax assessment—Amendment 402
134. Income Tax authorities 403
135. Income Tax return—non-filing of 403
136. Insurance companies—business of 404
137. Intangible assets—amortization of 404
138. Interim injunction—grant of by appellate Authority 405
139. Issuance of show-cause notice before confiscation of goods or imposition of penalty 406
J
140. Jurisdiction of customs authorities 406
141. Jurisdiction of officers of customs 407
142. Jurisdiction of the Federal Tax Ombudsman in relation to cases of tax refund 407
143. Jurisdiction—functions and powers of the Federal Tax Ombudsman 408
144. Jurisdiction—functions and powers of the Federal Tax Ombudsman 409
L
145. Levying and charging minimum tax 409
M
146. Making addition in income of taxpayer chargeable to tax 410
147. Making addition in the income of the taxpayer on the ground of "advance from Directors" 411
148. Making addition in the income on ground of sales and suppression in sales and production 411
149. Making addition on account of 'Miscellaneous Expenses' 411
150. Making addition on loan from Director 412
151. Making additions in income on account of unexplained imports 412
152. Minimum tax on the income of certain persons 413
153. Minimum Tax—Adjustment of 414
154. Minimum tax—Distributor 414
155. Minimum/turnover tax—charge of 415
156. Mis-declaration 416
157. Mis-declaration—Contravention report 416
158. Mis-declaration—Power of adjudication 417
N
159. Nature-Applicability of principle of res judicata to income tax proceedings 418
160. Newly established industrial undertaking 419
161. Non duty paid car without registration number—was intercepted by Customs Staff 419
162. Non-consideration of taxpayer's explanation 419
163. Non-issuance of income tax refund 420
164. Non-issuance of refund amount 420
165. Non-mentioning of specific subsection of in the show-cause notice 421
166. Non-payment of refund amount 422
167. Non-profit organization 423
168. Non-resident tax payer 423
169. Non-Resident/Overseas Pakistani—Exemption 424
170. Notice of discontinued business 424
171. Notice to obtain information or evidence to furnish any information relevant to tax leviable 425
172. Notice under S.120(3) for incomplete returns 425
173. Notification No. S.R.O. 1086(I)/2010 dated 30-11-2011 425
174. Notification No.SRO 555(I)/2006, dated 5-6-2006, 426
175. Notification No.SRO No. 1125(I)/2011 dated 31-12-2011 426
176. Notification S.R.O.776(I)/2011, dated 19-8-2011 427
177. Notification SRO No. 1125(I)/2011, dated 31.12.2011 427
178. Notification SRO No.57(I)/2012 dated 24-1-2012 428
179. Notification SRO.No.371(I)/2002, dated 15-6-2002 428
O
180. Offences and penalties—Statements 429
181. Officer of customs—Jurisdiction 429
182. Oral order—legality of 429
183. Other taxes—collection of—Discrimination 430
P
184. Payment for goods 430
185. Payment for goods—services and contracts 431
186. Payment for goods—services or contracts by prescribed persons 432
187. Payment of minimum tax on gross receipts 432
188. Payment of salaries by the employer to its employees 433
189. Payments of royalty—income from business to non-residents 433
190. Payments to non-residents 434
191. Payments to non-residents—Deduction of tax 434
192. Persons not required to furnish a return of income 434
193. Persons not required to furnish a return of income 435
194. Post clearance audit—Procedure 436
195. Power of adjudication—Assessment of sales tax 437
196. Power to adjudicate post clearance 437
197. Power to determine customs value 438
198. Power to grant stay—pending appeal before Tribunal 438
199. Powers and duties of officers of Customs—Jurisdiction 438
200. Powers of Appellate Tribunal 439
201. Presumption against the bona fide or the honesty of assessee/taxpayer 439
R
202. Re-assessment of goods declaration 440
203. Record or evidence of transaction 441
204. Recovery in disregard to stay order granted by Appellate Tribunal 441
205. Recovery of Arrears of Sales Tax 442
206. Recovery of arrears of tax and recovery of tax from persons holding money on behalf of a taxpayer 442
207. Recovery of disputed tax 443
208. Recovery of government dues 443
209. Recovery of Sales Tax and Income Tax 445
210. Recovery of short levied income tax by officer of Inland Revenue 447
211. Recovery of short paid amount 447
212. Recovery of tax from persons holding money on behalf of a taxpayer 448
213. Recovery of tax from the person from whom tax was not collected or deducted 449
214. Rectification of deemed assessment 449
215. Rectification of mistake 450
216. Rectification of order by the Appellate Tribunal 452
217. Rectification—Principle 453
218. Reduction—scope of 453
219. Refund claim 454
220. Refund of tax amount—delay in 454
221. Refund—claim for 454
222. Refusal of claim and imposition of penalty 455
223. Remand of case by Appellate Tribunal 456
224. Return of income to be the assessment order 457
225. Return of income—Non-resident 457
226. Return of taxpayer 458
227. Review of findings of Federal Tax Ombudsman—Maladministration 458
S
228. Sales tax and income tax—recovery of 459
229. Scope of tax for retailer 459
230. Scope—application and object of S.221—Income Tax Ordinance, 2001 460
231. Selection for audit—Definite information 460
232. Selection of case for audit 461
233. Separate notice—non-issuance of 463
234. Short recovery of income tax and sales tax—Jurisdiction 464
235. Show-cause notice 464
236. Show-cause notice—Jurisdiction 465
237. Show-cause notice—non-issuance of 465
238. Show-cause notice—Offences and penalties 466
239. SRO 586(I)/91 dated 30-06-1991 467
240. SRO No. 1125(I)/2011, dated 31-12-2011 (as amended by SRO No.504(I)/2013, dated 12-6-2013) 467
241. SRO No. 345(I)/2010, dated 24-5-2010 467
242. SRO No.550(I)/2012 dated 23-05-2012—SRO No.494(I)/2013 dated 10-06-2013 468
243. State Bank of Pakistan EPD Circular No.7—dated 19-4-2019 468
244. Status of industrial undertaking—Determination 469
245. Subsidy received as tariff "gross receipt" 469
246. Successive assessment—Quashing of order 470
247. Super Tax—Exemption from 470
T
248. Tax collected or deducted as a final tax 471
249. Tax fraud and evasion of sales tax 471
250. Taxation of income of retailers—Selection of case for audit 472
251. Taxpayer was aggrieved of reassessment made by Assessing Officer beyond time limitation 473
252. Taxpayer was aggrieved of selection of his case for audit as his declared income was not accepted by authorities 473
253. Tax-payer—pending his appeal before the Appellate Tribunal 473
254. Time and manner of payment 474
255. Time and manner of payment of sales tax 475
256. Transactions between associates [ 477
U
257. Unexplained income or assets 477
258. Unexplained income or assets—Amendment of assessment 478
259. Unexplained income or assets—Non-issuance of separate notice 479
V
260. Violation of condition in respect of exempted goods 479
Note: The Case-law of 2024 are available on the following pages: 14, 17, 36, 56, 68, 78, 84, 85, 123, 124, 135, 150, 168, 179, 185, 191, 200, 202, 205, 211, 219, 221, 255, 270, 274, 286, 322, 357 & 397
________________
SALES TAX––CASE-LAW
(SUPREME COURT—JUDGMENTS)
A
1. Accrued penalties and default surcharge—payment of 484
2. Additional Sales Tax—charging of 484
3. Adjudication proceedings 485
4. Adjustment of Input Tax 485
5. Adjustment of input tax—Taxable supplies 486
6. Allegation of suppression of supplies 486
7. Appeal before Commissioner Inland Revenue (Appeals) 487
B
8. Business or manufacturing premises or registered office of tax payer 487
C
9. Constitution petition 488
10. Constitutional jurisdiction of High Court 488
D
11. Default in payment of Sales Tax 489
12. Determination of value for the purposes of duty 490
13. Disallowance of input tax on packing material 490
E
14. Education cess on clubs—Double taxation 490
15. Effective rate of duty 490
16. Equipment eligible for zero rating of Sales Tax under SRO No. 530(I)/2005 dated 6-6-2005 ('the SRO') 491
17. Evasion of Sales Tax—Search without warrant 491
18. Excise duty 492
19. Exemption from Customs Duty and Sales Tax 492
20. Exemption from customs duty—Sales Tax and with-holding tax 493
21. Exemption from Sales Tax—'Proviso'—interpretation of 494
22. Exemption from Sales Tax—removal of 495
23. Exemption from Sales Tax—withdrawal/modification of 496
24. Extended period for issuance of show-cause notice 496
F
25. Final discharge of tax liability 497
I
26. Inference with such facts by the Supreme Court 497
27. Input tax—Presumptive tax regime 498
28. Input tax—refund/adjustment of 498
L
29. Liability raised against tax payer based on presumptions 499
M
30. Manufacture—Definition 499
N
31. No attempt made by the Department to verify the invoices 500
32. Non-payment or short payment of Sales Tax 500
33. Notice issuance of show-cause notice 501
34. Notices held in abeyance by the High Court in its Constitutional jurisdiction till value/price of concentrate used by tax-payer was determined by a Valuation Committee 501
35. Notification No. SRB-3-416/2014 dated 17-04-2014 501
36. Notification S.R.O. 530(I)/2005 dated 6.6.2005 502
37. Notification S.R.O. 77(I)/95 dated 19-01-1995 ("SRO 77"), as amended by S.R.O. 87(I)/96 dated 30-01-1996 502
38. Notification SRO 462(I)/88 dated 26.06.1988 ('SRO 462/88'). SRO 482(I)/92 dated 14.05.1992 ('SRO 482/92') 503
39. Notification SRO 482(I)/92 dated 14.05.1992 ('SRO 482/92') 504
40. Notification SRO 531(I)/88 dated 26.06.1988 ('SRO 531/88') 504
41. Notification SRO 612(I)/94 dated 14.06.1994 505
42. Notification SRO No. 1125(I)/2011 dated 31-12-2011 (as amended vide SRO No. 491(I)/2016 dated 30-06-2016) 506
O
43. Order passed by Appellate Tribunal set aside by the High Court 506
44. Output tax of Electricity Distribution Supply companies (DISCOs) 507
P
45. Posting of Inland Revenue Officers at premises of tax payer 507
46. Pre-conditions for maintainability of appeal 509
47. Presumptive tax regime 509
48. Provincial laws on Sales Tax on services 509
R
49. Reclamation of used transformer oil carried out by Pakistan WAPDA Foundation ('appellant') for WAPDA 510
50. Recovery of tax not levied or short-levied or erroneously refunded 510
51. Reference to the High Court 511
S
52. Sales Tax and with-holding tax 511
53. Sales Tax on services imposed by the Provincial Government 512
54. Sales Tax—collection of 512
55. Sales Tax—exemption from 513
56. Sales Tax—levy of 513
57. Sales Tax—refund of 514
58. Scope and payment of Sales Tax 514
59. Scrutiny or re-examination of record 514
60. Show cause notice—issuance of 515
61. Sterilization of syringes or other medical/surgical products 515
62. Subsidiary/sister concern relationship—Not proved 515
63. Suit for recovery of advance income tax and Sales Tax paid by the supplier on import of tractors 516
T
64. Tax fraud—Offences and penalties 516
65. Taxable supplies made to unregistered persons 517
66. Taxable supplies to be charged at zero percent 517
67. Time period was mandatory 517
V
68. Value Addition Tax (VAT)—levy of 517
69. Value of taxable service—interpretation of 519
W
70. Whether any time limit for adjustment of input tax 519
________________
SALES TAX––CASE-LAW
(HIGH COURTS—JUDGMENTS)
A
1. Access to information/record—right of 529
2. Access to premises of registered persons 530
3. Access to record and documents 530
4. Access to record and documents of taxpayer 530
5. Access to record and documents—Pre-conditions 531
6. Adjudication by Customs Appellate Tribunal 531
7. Adjustment of input tax in excess of ninety per cent 532
8. Advance tax deductible on electricity consumption 532
9. Allegation of evasion of tax and tax fraud 533
10. Allowable deduction 533
11. Alternative Dispute Resolution ("ADR") mechanism under the Sales Tax Act, 1990 534
12. Amendment was introduced in law to file electronic invoices 534
13. Amount recoverable with notice—Limitation 534
14. Appeal/Reference to the High Court 535
15. Application for grant of interim injunction 535
16. Application for registration 536
17. Appointments to public sector organization 536
18. Arrears of Sales Tax—recovery of 537
19. Assessment and audit 538
20. Assessment giving effect to any order 538
21. Assessment of Sales Tax—Determination of tax liability 539
22. Assessment of tax and recovery of tax not levied or short levied or erroneously refunded 540
23. Assessment of Tax 541
24. Audit and adjudication—Distinction 541
25. Audit Officer—role of 541
26. Authorized officers to have access to premises—stocks—accounts and records 542
B
27. Bail before arrest—confirmation of 542
28. Beneficial notification—application of 543
29. Blacklisting and suspension of registration 543
30. Bogus Sales Tax return 545
C
31. Classification of goods—Determination 545
32. Clerical and arithmetical errors 546
33. Collection of advance tax on the amount of electricity bill 546
34. Commencement of the Finance Act, 2006 546
35. Commission on sales—Trade discount 547
36. Commissioner—duty of 547
37. Commissioner—jurisdiction of 547
38. Condonation of time-limit 548
39. Conduct of inquiries by Sales Tax Authorities 549
40. Confidential communication with legal advisors 549
41. Constitution of Pakistan, Art. 199 550
42. Constitutional jurisdiction of High Court 550
43. Constitutional petition 551
44. Constitutional petition—Change of opinion 553
45. Consultation with Chief Justice 554
D
46. Deduction of Sales Tax on advertisement services 554
47. Deductions not allowed 555
48. Default surcharge/additional tax 555
49. Default surcharge—Input tax adjustment 556
50. Definite information obtained from audit or otherwise 557
51. Delegation of powers conferred on Commissioner to subordinate officer 557
52. Delegation of revisional jurisdiction by the Commissioner 558
53. De-registration—blacklisting and suspension of registration 558
54. Determination of Sales Tax liability 559
55. Determination of value for the purposes of excise duty 561
56. Dismissal for non-prosecution—Restoration 562
57. Disputed question of fact 562
58. Distinction between nature and scope of powers under Ss. 25 & 72B of Sales Tax Act, 1990 563
59. Distinction in procedure to be made on basis of supplies—not persons 563
60. Doctrine of "Reading Down"—Applicability 564
61. Doctrine of res judicat
