The COMMISSIONER INLAND REVENUE, ZONE-II, REGIONAL TAX OFFICE, LAHORE vs SHAZIA ZAFAR Fiscal statute

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The COMMISSIONER INLAND REVENUE, ZONE-II, REGIONAL TAX OFFICE, LAHORE VS SHAZIA ZAFAR Fiscal statute---Applicability---All fiscal statutes apply prospectively unless specifically and expressly provided otherwise. Ss.111, 122 & 133---Unexplained income or assets---Separate notice, issuance of---Words "…the person offers no explanation…" and "…or the explanation offered by the person is not, in the Commissioner's opinion, satisfactory…"---Scope--- Dispute was with regard to additions made by authorities under S.111 of Income Tax Ordinance, 2001--- Appellate Tribunal Inland Revenue deleted such additions on the plea that a separate and specific notice was required for addition under S.111 of Income Tax Ordinance, 2001---Validity---If instances / categories of unexplained income and assets, detailed in S.111 of Income Tax Ordinance 2001, emerged to Commissioner, he was required to invite explanation from taxpayer, confronting information collected that its case would come within the head(s) specified in S.111(1) of Income Tax Ordinance, 2001, before adjudging the matter---Specific word "notice" was not introduced in S.111 of Income Tax Ordinance, 2001 but words "…the person offers no explanation…" and "…or the explanation offered by the person is not, in the Commissioner's opinion, satisfactory…" connoted that notice was the proper mechanism to call for explanation from taxpayer---Notice and corresponding non-satisfactory elucidation were prerequisites to make addition under S.111 of Income Tax Ordinance, 2001 otherwise addition was legally unsustainable owing to non-compliance of law---High Court maintained order passed by Appellate Tribunal Inland Revenue and replied the questions in negative---Reference was dismissed accordingly. Change in law---Retrospective effect---Scope---Change in substantive law, which divests and adversely affects vested rights of parties should always have prospective application, unless by express word of the legislation and/or by necessary intendment/implication, such law has been made applicable retrospectively---Courts lean against giving retrospective operation where no vested rights or past transactions prejudicially affect or exist---No legislation operates retrospectively if it touches a right in existence at the time of passing of legislation---Rights of parties are to be decided according to law existing when action began unless provision made to contrary---Where statute itself does not make its operation retrospective, it would not be reasonable to claim that by necessary implication it has retrospective operation.

The COMMISSIONER INLAND REVENUE, ZONE-II, REGIONAL TAX OFFICE, LAHORE vs SHAZIA ZAFAR Fiscal statute — 2022 PTD 1942 LAHORE-HIGH-COURT-LAHORE

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