COMMISSIONER INLAND REVENUE vs PRIME COMMERCIAL BANK LTD — 2023 PTD 997 LAHORE-HIGH-COURT-LAHORE

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COMMISSIONER INLAND REVENUE VS PRIME COMMERCIAL BANK LTD. Ss. 120, 122, 133 & 171(1)---Reference---Refund---Compensation---Scope---Authorities allowed compensation for the period starting from three months after receipt of appellate order and rejected the claim for period during which order under S. 120 of Income Tax Ordinance, 2001, was operative---In appeal, Commissioner (Appeals) allowed compensation for the year as well against which the authorities filed an appeal before Appellate Tribunal Inland Revenue---Validity---Authorities did not dispute that compensation was due on account of delayed refund---Only dispute was regarding one of the periods in question for which compensation was denied---Provision of S.171(1) of Income Tax Ordinance, 2001, was clear and unequivocal, which had obliged the Commissioner to pay to taxpayer a further amount by way of compensation where refund due to taxpayer was not paid within three months of the date on which it had become due---Two forums below were right in holding that for the purpose of S.171(1) of Income Tax Ordinance, 2001, refund became due on the date of assessment order made under S.120(1) of Income Tax Ordinance, 2001---High Court decided question of law in favour of respondents / taxpayers---Reference was dismissed, in circumstances. Ss.122 & 133---Reference---assessment order, amendment of---audit---Selection of case---authorities were aggrieved of order passed by appellate Tribunal Inland Revenue setting aside amendment of assessment order---Validity---If audit was conducted and discrepancies were noted by Taxation Officer, that would clearly constitute definite information to clothe Taxation Officer with the power to amend or further amend assessment order in respect of a tax year---appellate Tribunal Inland Revenue relied upon extraneous circumstances to uphold order of Commissioner (appeals) in stating that there was no definite information with the department for amendment of assessment order---High Court decided question of law in favour of authorities as Taxation officer issued notice in terms of S.122(9) to respondents / taxpayers who had power to pass order of amendment of assessment---Reference was allowed, in circumstances. Ss.122, 133 & 151(1)---Banking Companies Ordinance (LVII of 1962), 5(c)---Reference---Assessment order, amendment of---Banking company---State Bank of Pakistan, status of---Dispute was with regard to amount of loan agreement executed by respondent / tax payer and State Bank of Pakistan---Validity---Loan agreement was with State Bank of Pakistan, therefore, it was not covered by exclusion of 151 (1)(d) of Income Tax Ordinance, 2001, as State Bank of Pakistan was not a banking company or a development financial institution by any stretch of imagination nor by the definition of the term "banking company" as given in Banking Companies Ordinance, 1962--- Such factual aspect was not determined by three forums below and for such purpose matter was to be referred back to Taxation Officer to determine precisely the nature and sweep of loan agreement only to the extent whether it had been executed with a banking company or a development financial institution as defined in Income Tax Ordinance, 2001---If such was not the case, respondents / tax payers were not entitled to exception given in S.151(1)(d) of Income Tax Ordinance, 2001---High Court set aside the order passed by Appellate Tribunal Inland Revenue and remanded the matter to Taxation Officer to conduct such inquiry---Reference was allowed accordingly.

COMMISSIONER INLAND REVENUE vs PRIME COMMERCIAL BANK LTD — 2023 PTD 997 LAHORE-HIGH-COURT-LAHORE

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