| Case ID |
425f888a-ddaf-483f-8ebb-9cee61a0bddf |
| Body |
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| Case Number |
ITA No. 396/IB/2014 |
| Decision Date |
Dec 22, 2015 |
| Hearing Date |
Aug 26, 2015 |
| Decision |
The Appellate Tribunal Inland Revenue ruled in favor of the taxpayer, confirming the exemption under Clause 58 of the Income Tax Ordinance, 2001 for the tax years 2011 to 2013. The Tribunal found that the income generated by the Army Welfare Trust (AWT) was diverted at source to the Welfare and Rehabilitation Directorate of the Pakistan Army, thereby qualifying for tax exemption. The court dismissed departmental appeals related to minimum tax imposition and upheld the treatment of CNG operations income as business income, confirming prior decisions and emphasizing the legal obligation of AWT to utilize income for welfare purposes. |
| Summary |
In the case of ITA No. 396/IB/2014, the Appellate Tribunal Inland Revenue addressed appeals concerning the tax years 2011 to 2013, focusing on the tax status of the Army Welfare Trust (AWT). The Tribunal confirmed the exemption under Clause 58 of the Income Tax Ordinance, 2001, asserting that AWT's income was directed to the Welfare and Rehabilitation Directorate of the Pakistan Army, thus qualifying for tax exemption. The decision emphasized the nature of AWT's operations as welfare-based, dismissing appeals regarding minimum tax and the classification of CNG operations income as business income. This ruling aligns with previous judgments affirming AWT's status and tax treatment, marking a significant precedent in tax law concerning welfare trusts. The case reinforces the principles of income exemption for charitable and welfare organizations, particularly in the context of military welfare initiatives, and highlights the importance of proper legal frameworks to support such entities. |
| Court |
Appellate Tribunal Inland Revenue
|
| Entities Involved |
Army Welfare Trust,
Welfare and Rehabilitation Directorate of Pakistan Army
|
| Judges |
SHAHID MASOOD MANZAR, JUDICIAL MEMBER,
MUHAMMAD RIAZ, ACCOUNTANT MEMBER
|
| Lawyers |
Mr. Mohy-ud-Din Ismail, D.R,
Mr. Tahir Razzaque Khan, FCA
|
| Petitioners |
The Commissioner Inland Revenue, (Legal), Large Taxpayers Unit, Islamabad High Court
|
| Respondents |
M/s Army Welfare Trust, AWT Plaza, Saddar, RAWALPINDI
|
| Citations |
2016 SLD 271
|
| Other Citations |
2001 PTD (Trib.) 1243,
83 TAX (Trib.) 105,
2010 PTD 355
|
| Laws Involved |
Income Tax Ordinance, 2001
|
| Sections |
2(36),
113,
122,
234A,
Clause 58(2)(1) of Part I of Second Schedule,
Clause 58 of Part I of Second Schedule,
Clause 11(ix) of Part-IV of Second Schedule,
Clause (62) of Part I of the Second Schedule
|