| Case ID |
0bcf5529-02f5-4960-80f9-9ed56a0d252f |
| Body |
View case body. Login to View |
| Case Number |
Civil Appeal No. 87 of 1964 |
| Decision Date |
Jan 14, 1966 |
| Hearing Date |
|
| Decision |
The Supreme Court of Pakistan in its ruling emphasized that the imposition of penalties under section 28 of the Income Tax Act is applicable to dissolved firms and their partners. The court rejected the argument that the dissolution of a firm exempts it from penalties, asserting that the expression 'assessment' within the context of section 44 is comprehensive enough to include penalty proceedings. The judgment clarified that penalties for deliberate concealment of income could be levied on partners of a dissolved firm, reinforcing the notion that dissolution does not eliminate tax obligations. The court ultimately dismissed the appeal and upheld the penalties imposed by the Income-tax Officer. |
| Summary |
In this landmark case, the Supreme Court of Pakistan addressed the critical issue of tax liability for dissolved partnerships under the Income Tax Act, 1922. The court ruled that even after dissolution, partners remain liable for penalties associated with tax assessments. This case underscores the importance of compliance with tax regulations and the consequences of concealment of income. The decision highlights significant legal principles regarding tax assessments and penalties, making it a pivotal reference for tax law practitioners. The implications of this ruling are substantial for firms considering dissolution as a strategy to evade tax responsibilities. Legal professionals must be aware that dissolution does not absolve partners from their tax obligations, particularly concerning penalties for income concealment. This ruling serves as a cautionary tale for businesses and advocates alike, emphasizing the need for transparent financial practices. The case also sets a precedent for future tax-related disputes, reinforcing the applicability of tax laws to dissolved entities. Keywords: tax liability, dissolved partnerships, income concealment, tax regulations, legal principles. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
Muhammadi Oil and General Mills,
Income Tax Officer, A Ward
|
| Judges |
A. R. CORNELIUS, C.J.,
S. A. RAHMAN,
FAZLEAKBAR,
HAMOODUR RAHMAN,
MUHAMMAD YAQUB ALI
|
| Lawyers |
Javed Hashmi, Advocate High Court,
Asad Hussain Zaidi, Advocate Supreme Court,
Abdul Haque, Advocate Supreme Court,
M. B. Khizar Tamimi, Attorney
|
| Petitioners |
MUHAMMADI OIL AND GENERAL MILLS, LYALLPUR
|
| Respondents |
THE Income Tax OFFICER, A WARD, LAYALLPUR
|
| Citations |
1966 SLD 72,
1966 PLD 519,
1966 SCC 256
|
| Other Citations |
C. A. Abraham v. Income-tax Officer, Kottayam and another A I R 1961 S C 609,
In the matter of Messrs Abdul Karim, Karamat Ullah 1962 P T D 920
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
22(4),
22(4A),
23,
23(2),
28,
44
|