| Case ID |
0040e916-ebac-49c3-996e-05cbe0730f12 |
| Body |
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| Case Number |
Civil Appeals Nos.352 and 523 of 1980 |
| Decision Date |
May 06, 1991 |
| Hearing Date |
Mar 12, 1991 |
| Decision |
In this case, the Supreme Court of Pakistan addressed two appeals concerning the interpretation of the 'previous year' under section 2(11) of the Income Tax Act, 1922. The court ruled that the Income Tax Officer has the discretion to allow changes in the previous year while safeguarding revenue interests. It was determined that the length of the previous year does not necessarily have to be 12 months, especially for newly established businesses. The court emphasized that once an assessee chooses a previous year, they cannot change it without consent from the Income Tax Officer. The appeals were allowed, affirming the Income Tax Officer's decision to impose conditions on changing the previous year. |
| Summary |
This landmark decision by the Supreme Court of Pakistan clarifies the provisions of the Income Tax Act, 1922, particularly regarding the definition and flexibility of the 'previous year' in relation to corporate taxation. The ruling establishes that newly formed businesses have the option to choose a previous year that is less than 12 months, thus allowing for greater adaptability in financial reporting. The court also underscored the authority of the Income Tax Officer to impose conditions on such changes to prevent revenue loss. This case is significant for tax practitioners and businesses in Pakistan, as it provides clarity on the procedural aspects of income tax assessments and the discretion allowed to tax authorities. Keywords such as 'Income Tax Act', 'previous year', 'tax assessment', 'Supreme Court of Pakistan', and 'corporate taxation' are crucial for understanding the implications of this ruling and are trending in legal discussions. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
COMMISSIONER OF Income Tax, LAHORE,
Messrs NOORANI CALANDERING AND FINISHING MILLS, LYALLPUR
|
| Judges |
SAAD SAOOD,
JAN,
ABDUL SHAKURUL SALAM,
MUHAMMAD RAFIQ TARAR
|
| Lawyers |
Ch. Muhammad Ishaque, Advocate Supreme Court,
M. Aslam, Advocate-on-Record
|
| Petitioners |
COMMISSIONER OF Income Tax, LAHORE
|
| Respondents |
,
Messrs NOORANI CALANDERING AND FINISHING MILLS, LYALLPUR
|
| Citations |
1991 SLD 143,
1991 PTD 830,
(1991) 64 TAX 69
|
| Other Citations |
Not available
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
2(11)
|