WARTSILA PAKISTAN (PVT.) LTD. vs COMMISSIONER INLAND REVENUE, LTO, 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.

WARTSILA PAKISTAN (PVT.) LTD. VS COMMISSIONER INLAND REVENUE, LTO, LAHORE Ss. 4C, 4C(2), clause (i), 154 & 233---"Commission" income---Super tax, chargeability of---Scope---Appellant( taxpayer/company), accruing foreign indent commission, filed income tax return for tax year 2023 which, upon scrutiny, revealed that the taxpayer failed to discharge the liability of payment of super tax under S. 4C of the Income Tax Ordinance, 2001 ('the Ordinance, 2001')---Contention of the appellant was that the word 'Commission' used in clause (i) of S.4C(2) refers to Commission envisaged in S. 233 and not of S.154 of the Ordinance, 2001; and that its income does not exceed the threshold of Rs.150,000,000/- therefore is not liable to chargeability under S.4C of the Ordinance, 2001---Whether appellant's income for the tax year 2023 exceeds the threshold of 150 million or not for the purpose of chargeability of tax under S. 4C as per income defined in the provision of S. 4C of the Ordinance 2001 ?---Held: Section 4C of the Ordinance provides for determination of tax liability under said provision which indicates that super tax shall be charged on high earning persons at the rates specified in Division IIB of Part I of First Schedule---Subsections (4) & (5) of S. 4C also empowers the Commissioner to determine the super tax liability and to recover the same from the taxpayer---Super tax, by its very nature, related to an additional duty of income tax and such charge had been recognized to exist independent of income tax---From perusal of S. 4C subsection (2), it can be safely gathered that for the purpose of computing income for levy of super tax, income shall be the sum of (i) profit on debt, dividends, capital gains, brokerage and commission (ii) taxable income (iii) imputable income and (iv) income computed other than brought forward depreciation, amortization and business losses ---Examination of S. 4C(2)(i) reflects that word "commission" has been given independent of any classification---Contention of the appellant was misconceived as the word 'Commission' used in clause (i) of S. 4C(2) refers to Commission envisaged in S. 233 and not S. 154 because the Legislature has not made any bi-furcation or such classification ; nor did the Officer Inland Revenue (OIR) make any such observation in said regard rather he just added the commission income for the purpose of charging super tax---Without any explicit reference to any particular provision, giving the word "commission "a restrictive meaning in terms of S.233 of the Ordinance, 2001 is uncalled for ---The most appropriate interpretation of S. 4C of the Ordinance, 2001 is that commission income shall not be included as imputable though may be subject to Final Tax Regime and is required to be included under cls. (i) of S. 4C(2) of the Ordinance, 2001 as a sum in the taxpayer's income for the purpose of charging super tax---Appellate Tribunal Inland Revenue upheld the impugned order---Appeal, filed by taxpayer/company, being merit-less was dismissed.

WARTSILA PAKISTAN (PVT.) LTD. vs COMMISSIONER INLAND REVENUE, LTO, LAHORE Ss — 2025 PTD 1707 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN

Case information

Judgment text as reported

Other judgments reported in 2025 PTD