| Case ID |
2ae25e51-8065-488f-9ebe-ac6fbfe71f35 |
| Body |
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| Case Number |
W.P. No. 32241 of 2015 |
| Decision Date |
Oct 10, 2017 |
| Hearing Date |
Sep 02, 2017 |
| Decision |
The court held that the impugned circulars issued by the Federal Board of Revenue (FBR) are ultra vires the Income Tax Ordinance, 2001, meaning they were issued without lawful authority and thus have no legal effect. The court clarified that the trustees of approved recognized Provident Funds, Approved Gratuity Funds, or Provident Pension Funds do not require an exemption certificate under Section 159 of the Ordinance to enjoy exemptions granted under Clause 47-B of the Ordinance. Consequently, the petitioners are not liable to the collection or deduction of advance income tax under various sections mentioned in the Ordinance, and the court emphasized the importance of recognizing the legislative intent behind the exemptions provided in the Ordinance. The decision signifies a crucial interpretation of tax law, particularly regarding the obligations of withholding agents and the exemptions applicable to specific funds. |
| Summary |
This case revolves around the interpretation of the Income Tax Ordinance, 2001, particularly concerning the exemptions applicable to trustees of recognized Provident Funds, Gratuity Funds, and Pension Funds. The Lahore High Court examined the legal implications of the Federal Board of Revenue's circulars, which mandated the production of exemption certificates for claiming tax exemptions under Clause 47-B. The court determined that such requirements were not only unnecessary but also contradicted the legislative intent, which aimed to exempt these funds from tax deductions. The judgment clarified that the obligations of withholding agents do not extend to requiring exemption certificates when the law explicitly exempts certain transactions. This ruling underscores the delicate balance between tax compliance and the rights of recognized funds, setting a precedent for future cases involving tax exemptions and administrative regulations. Keywords: Income Tax Ordinance, tax exemptions, Lahore High Court, Provident Funds, legal authority, withholding agents. |
| Court |
Lahore High Court
|
| Entities Involved |
Not available
|
| Judges |
SHAHID KARIM, JUSTICE
|
| Lawyers |
Mr. Mansoor Usman Awan,
Shahzeen Abdullah,
Hussain Ibrahim,
Muhammad Abubakar,
Mr. Syed Naveed A. Andrabi,
Ashiq Hussain Hanjra,
Barrister Saad Ehsan Warraich,
Muhammad Azam Zia,
Abbas Haider Hashmi,
Sarfraz Ahmad Cheema,
Dr. Ishtiaq Ahmad Khan
|
| Petitioners |
USMAN HASSAN & ANOTHER
|
| Respondents |
FEDERATION OF PAKISTAN & OTHERS
|
| Citations |
2018 SLD 51,
2018 PLJ 175
|
| Other Citations |
2016 PTD 1204
|
| Laws Involved |
Income Tax Ordinance, 2001,
Constitution of Pakistan, 1973
|
| Sections |
199,
53,
53(1)(d),
37,
159,
233,
100C,
150,
151,
159(1),
159(2),
47B,
53(1),
53(1)(a),
236-P,
Clause 57 of Part I of Second Schedule,
2(23A,
2(35C
|