Legal Case Summary

Case Details
Case ID 30cd1323-2b84-47bd-bfed-560eb773812d
Body View case body.
Case Number Writ Petition No. 9766 of 2011
Decision Date Jun 21, 2016
Hearing Date
Decision The Lahore High Court ruled that the Income Tax Ordinance, specifically Section 153, does not apply to contractors operating in the Federally Administered Tribal Areas (FATA). The court found that the federal government's order regarding withholding tax on payments made to contractors executing contracts within the Tribal Areas was without jurisdiction due to the provisions of Article 247 of the Constitution. Consequently, the court disposed of the constitutional petition in favor of the petitioners, affirming their exemption from income tax obligations as they operate in an area where the ordinance has not been extended. The decision emphasized the lack of lawful authority for the imposition of such taxes on businesses in the Tribal Areas.
Summary This case revolves around the applicability of the Income Tax Ordinance, 2001, particularly Section 153, concerning contractors in the Federally Administered Tribal Areas (FATA). The Lahore High Court addressed the legality of a government order mandating withholding tax deductions from contractors receiving payments from settled territories while executing contracts in tribal areas. The court concluded that the Income Tax Ordinance had not been extended to these areas as per Article 247 of the Constitution of Pakistan, rendering any tax claims illegitimate. This ruling underscores the importance of jurisdictional authority in tax law and offers clarity on the tax obligations of businesses operating in tribal regions. The case references prior judgments that support the non-applicability of the ordinance in similar contexts, highlighting the court's reliance on established legal precedents. Keywords such as 'Income Tax Ordinance', 'Constitution of Pakistan', 'Federally Administered Tribal Areas', and 'withholding tax' are critical for understanding the implications of this ruling for contractors and the federal government.
Court Lahore High Court
Entities Involved Federal Board of Revenue, Messrs TA. Industries
Judges MUHAMMAD SAJID MEHMOOD SETHI, J
Lawyers Qamar-uz-Zaman Butt, Agha Ahmad Khan, Tariq Manzoor Sial, Malik Muhammad Tariq Rajwana, Malik Muhammad Hussain Rajwana
Petitioners 2 others, MUHAMMAD AKBAR LEGHARI
Respondents 4 others, The FEDERATION OF PAKISTAN through Revenue Division, Islamabad
Citations 2016 SLD 1207, 2016 PTD 2371
Other Citations 2008 PTD 1563, 2008 PTD 1547, 2003 PTD 1913, 2003 PTD 2083
Laws Involved Income Tax Ordinance, 2001, Constitution of Pakistan, 1973
Sections 153, 247