COMMISSIONER INLAND REVENUE, DISTRICT ZONE, REGIONAL TAX OFFICE, RAWALPINDI vs Sh

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COMMISSIONER INLAND REVENUE, DISTRICT ZONE, REGIONAL TAX OFFICE, RAWALPINDI VS Sh. IKRAM ELLAHI Ss. 131 & 133---Reference application, filing of---Assailing findings of Appellate Tribunal Inland Revenue---Relevant question not proposed before the High Court---Department filed Reference Application as the Appellate Tribunal Inland Revenue ('the Tribunal'), while vacating orders of both the authorities below, deleted the addition made by the Assessing Officer under S. 111(1)(d) of the Income Tax Ordinance, 2001 ("issue-in-hand")---Validity---Memo of instant reference application, undeniably, revealed that findings of Appellate Tribunal were not assailed through instant Reference Application by proposing any question(s) on issue-in-hand---When certain observations on some issue / question are not challenged in a Reference Application before the High Court, it clearly signifies that such observations have attained finality---In the present case, question regarding retrospective application of S.111(1)(d) of the Ordinance 2001, was not available for adjudication---The finality of such decisions establishes vested rights, thereby reinforcing the need for diligence in addressing legal matters within the prescribed timelines---Reference Application, filed by the Department, was dismissed, in circumstances. Citation Name: 2025 PTD 137 LAHORE-HIGH-COURT-LAHOREBookmark this Case COMMISSIONER INLAND REVENUE, DISTRICT ZONE, REGIONAL TAX OFFICE, RAWALPINDI VS Sh. IKRAM ELLAHI S.111(1)(d) [as inserted through the Finance Act, 2011]---Retrospective effect, lack of---Department filed Reference Application as the Appellate Tribunal Inland Revenue ('the Tribunal'), while vacating orders of both the authorities below, deleted the addition made by the Assessing Officer under S. 111(1)(d) of the Income Tax Ordinance, 2001---Validity---Section 111(1)(d) of the Income Tax Ordinance, 2001, was inserted through the Finance Act, 2011 with prospective effect and came into force w.e.f. 01.07.2011---Whereas the present matter pertained to tax year 2010, thus, no retrospectivity can be given to it---As a basic principle of interpretation of statutes, tax statutes operate prospectively unless clearly indicated by the legislature, therefore, retrospectivity cannot be presumed---A statute or any amendment thereto ordinarily operates prospectively unless, by express enactment or necessary intendment, retrospective operation has been given to it---Refence Application, filed by the Department , was dismissed , in circumstances. Citation Name: 2025 PTD 137 LAHORE-HIGH-COURT-LAHOREBookmark this Case COMMISSIONER INLAND REVENUE, DISTRICT ZONE, REGIONAL TAX OFFICE, RAWALPINDI VS Sh. IKRAM ELLAHI Ss.111(1)(b), 111(1)(d) & 122(5)---Concealed income---Suppression of sales, allegation of---"Chargeable to tax"---Scope---Show-Cause Notice, issuance of---Department filed Reference Application as the Appellate Tribunal Inland Revenue ('the Tribunal'), while vacating orders of both the authorities below, deleted the addition made by the Assessing Officer under S.111(1)(d) of the Income Tax Ordinance, 2001 ('the Ordinance 2001')---Argument of the Applicant / Department was that show-cause notice should have been issued under S. 111(1)(b) of the Ordinance, 2001 instead of S. 111(1)(d) of the Ordinance, 2001--Validity---Dispute-in-hand i.e. suppression of sales came within the ambit of S. 111(1)(d) of the Ordinance, 2001---Clause (d) of S. 111(1) of the Ordinance, 2001 confers a power on the Commissioner to bring to tax unearthed income i.e. income which was concealed by either suppression of sales or production or any amount chargeable to tax---Words "chargeable to tax" apply to the entirety of sub-clause (i) i.e. also to the suppressed production and / or sales---If "any amount" can be brought within the scope of sub-clause (i) only if, and to the extent, that it is "chargeable to tax" (i.e. constitutes "income" properly so called), then production and sales must be given the same treatment---Thus, it is only production or sales chargeable to tax that can be brought within the ambit of cl. (d) to S. 111(1) of the Ordinance, 2001---Taxpayer is exposed to the same tax liability in respect of the income that has escaped assessment, or has been suppressed i.e. taxpayer is liable to tax on the "net" amount, or "income" properly so called---Answer to the purposed question was in affirmative i.e. against applicant-department and in favour of respondent-taxpayer---Reference Application, filed by the Department, was dismissed, in circumstances.

COMMISSIONER INLAND REVENUE, DISTRICT ZONE, REGIONAL TAX OFFICE, RAWALPINDI vs Sh — 2025 PTD 137 LAHORE-HIGH-COURT-LAHORE

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