| Case ID |
43fa292a-8935-46ee-96fb-1c316b012077 |
| Body |
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| Case Number |
Civil Appeals Nos. 605-K, 606-K of 1990, 12-K of 1 |
| Decision Date |
Apr 04, 1993 |
| Hearing Date |
Jan 24, 1993 |
| Decision |
The Supreme Court of Pakistan ruled on several important legal provisions concerning income tax exemptions and the application of the Income Tax Ordinance, 1979. The court found that the interest earned by insurance companies on Khas Deposit Certificates and Defence Savings Certificates was part of their profits and gains and thus subject to tax. The court clarified that despite the provisions of the Second Schedule, which exempt certain incomes from taxation, the specific provisions governing the computation of profits for insurance companies take precedence. The decision emphasized the importance of the statutory framework governing tax assessments and the limitations of administrative interpretations by the Central Board of Revenue. |
| Summary |
This case revolves around the interpretation of the Income Tax Ordinance, 1979, particularly focusing on the taxation of income earned by insurance companies from Khas Deposit Certificates and Defence Savings Certificates. The Supreme Court examined the provisions of the ordinance that allow exemptions under certain conditions. It was determined that the income generated from these certificates was indeed taxable as it constituted part of the insurance companies' profits and gains. The court also addressed the administrative directives issued by the Central Board of Revenue and clarified that such directives cannot override the clear statutory provisions of the law. The ruling underscores the court's stance on the supremacy of legislative frameworks over administrative interpretations in tax matters, reinforcing the principle that tax liabilities must be assessed based on established legal standards rather than fluctuating administrative opinions. This case serves as a crucial reference point for future interpretations of tax laws concerning insurance companies and their obligations under the Income Tax Ordinance, 1979. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
Central Board of Revenue,
Central Insurance Co.
|
| Judges |
NASIM HASAN SHAH,
AJMAL MIAN,
MUHAMMAD AFZAL LONE
|
| Lawyers |
Nasim A. Farooqui, Advocate Supreme Court,
Fazal Ghani Khan, Advocate Supreme Court,
Mansoor Ahmad Khan, Senior Advocate Supreme Court,
M.G. Hasan, Advocate,
Shaikh Haider, Advocate Supreme Court,
S.M. Abbas, Advocate-on-Record
|
| Petitioners |
M/s CENTRAL INSURANCE CO. and others
|
| Respondents |
THE CENTRAL BOARD OF REVENUE, ISLAMABAD and others
|
| Citations |
1993 SLD 85,
1993 PTD 766,
(1993) 68 TAX 86,
1993 SCMR 1232,
1993 SCC 1049
|
| Other Citations |
The Commissioner of Income Tax v. R.G. Chapman PLD 1985 SC 329,
Life Insurance Corporation of India v. Commissioner of Income-tax, Delhi and Rajasthan (1964) 51 ITR 773,
Assessee v. Department (1964) 10 Taxation 95,
Pandyan Insurance Co. v. Commissioner of Income-tax, Madras 1965 PTD-475,
Lakshami Insurance Co. Ltd. v. Commissioner of Income-tax, New Delhi 1972 PTD 233,
Commissioner of Income-tax, Bombay City II, Bombay v. New India Assurance Co. Ltd. 1972 PTD 458,
Commissioner of Income-tax, Bombay City II 'Bombay v. New India Assurance Co. Ltd. (1969) 71 I.T.R. 761,
Lakshmi Insurance Co. Ltd. v. Commissioner of Income¬ Tax, New Delhi (1969) 72 I.T.R. 474,
Lakshmi Insurance Co. Ltd., Lahore v. Commissioner of Income-tax, Punjab, Delhi and N.-W.F.P. Provinces, Lahore AIR 1950 Lah. 234,
Commissioner of Income-tax v. National Insurance Co. Ltd. (1986) 159 ITR 314,
Commissioner of Income-tax, Central, Karachi v. Messrs Alpha Insurance Co. Ltd. and another PLD 1981 SC 293,
Messrs Habib Insurance Co. Ltd. v. Commissioner of Income-tax (Central), Karachi PI.D 1985 SC 109,
Commissioner of Income-tax (Central) Zone 'A', Karachi v. Phoenix Assurance Co. Ltd. (1991) 64 Taxation 173,
Commissioner of Income-tax, Karachi v. Messrs Queensland Insurance Co. Ltd., Karachi 1992 SCMR 539
|
| Laws Involved |
Income Tax Ordinance, 1979,
Constitution of Pakistan, 1973
|
| Sections |
136,
185(3),
8,
134,
17,
4,
5,
137,
14,
3,
3(a),
26,
26(b),
29,
65(1)(a),
65(1)(b),
Second Schedule, item No.(72),
Fourth Schedule, R.5,
10(7)
|