ABDUL ALEEM KHAN FOUNDATION vs COMMISIONER INLAND REVENUE, CTO, LAHORE Ss

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

ABDUL ALEEM KHAN FOUNDATION VS COMMISIONER INLAND REVENUE, CTO, LAHORE Ss. 2(36)(c), 100C, 122(1) & 122(4)---Income Tax Rules, 2002, Rr. 211 to 217---Societies Registration Act (XXI of 1860), Preamble---Non-Profit Organization---Tax credit, claim of---Restrictions / conditions---Scope---Appellant-taxpayer / NPO (having been registered in Pakistan under the Societies Registration Act, 1860, as a Non-Profit Organization) filed appeal against concurrent tax credit disallowing orders passed against it---Whether the tax credit available under S. 100C of the Income Tax Ordinance, 2001, ('the Ordinance, 2001') is subject to any restrictions or conditions?---Validity---From the definition of a Non-Profit Organization (NPO) givenunder S. 2(36)(c) of the Ordinance, 2001, it is clear that it includes welfare institutions established for welfare purposes, formed/registered under any law as an NPO, and approved by the Commissioner of Inland Revenue (CIR) in the prescribed manner, as described in Rr. 211 to 217 of the Income Tax Rules, 2002---It is imperative to mention here that no organization or institution can enjoy the status of an NPO unless it receives approval from the CIR under the provisions of the law---Once an organization is declared an NPO under S. 2(36)(c) of the Ordinance, read with Rr. 211 to 217 of the Income Tax Rules, 2002, it may claim the tax credit under S. 100C of the Ordinance, subject to the fulfillment of certain conditions specified under the said section---From the provisions under S. 100C of the Ordinance 2001 , it is clear that non-profit organizations, trusts, or welfare institutions are entitled to claim the benefit of the tax credit under S. 100C of the Ordinance 2001, subject to the fulfillment of the conditions outlined therein, along with the approval granted by the CIR under S. 2(36) (c) of the Ordinance, read with Rr. 211 to 217 of the Income Tax Rules, 2002---In the present case, pertinently, the Department accepted the taxpayer's status as an NPO for the two Tax Years (2015 and 2017 ) and allowed the tax credit under S. 100C for those years, as evidenced by the respective orders; even, for 2016 ('the tax year under consideration'), the taxpayer's claim for the tax credit under S. 100C of the Ordinance 2001 was accepted in audit proceedings passed under S. 122(1) of the Ordinance, 2001---However, the said claim had been rejected without providing any plausible reasons on record under the impugned order passed under S. 122(4) of the Ordinance, 2001---Nevertheless, the taxpayer had obtained approval under S. 2(36) of the Ordinance, 2001, as evidenced by the relevant letter and the taxpayer's NPO status was officially recognized by the Department---Consequently, the tax credit under S. 100C was granted for Tax Years 2015 and 2017, even, for the tax year under consideration, the taxpayer's claim for the tax credit under S. 100C of the Ordinance 2001 was accepted vide order having been passed under S. 122(1) of the Ordinance, 2001---Undisputably, the taxpayer is a foundation registered under the Societies Registration Act, 1860, and operates in accordance with the provisions of the Societies Act, 1860 as a non-profit organization---Moreover, there is no allegation that the taxpayer has misused the foundation's funds or properties, or that any of its members have benefited from surplus funds or profits accruing to the foundation---Thus, the appellant is legally entitled to the full 100% tax credit under S. 100C of the Ordinance 2001, as no violation has been committed by the appellant that could impede or disqualify the appellant from availing the credit under the law---Documents (including bank statements and certificate issued by Contributor /Donor ) submitted by the Appellant establish that the taxpayer received an amount of Rs. 169,898,000 from its Contributor/Donor as a voluntary contribution/donation through proper banking channels , confirming that the funds were received through proper banking channels---Appellate Tribunal Inland Revenue annulled impugned orders passed by the Authorities below being illegal, without jurisdiction and against the facts of the case, in circumstances---Appeal, filed by taxpayer was allowed, in circumstances.

ABDUL ALEEM KHAN FOUNDATION vs COMMISIONER INLAND REVENUE, CTO, LAHORE Ss — 2025 PTD 1357 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN

Case information

Judgment text as reported

Other judgments reported in 2025 PTD