PAK TELECOM MOBILE LIMITED vs FEDERAL BOARD OF REVENUE (FBR) Ss — 2025 PTD 757 ISLAMABAD

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PAK TELECOM MOBILE LIMITED VS FEDERAL BOARD OF REVENUE (FBR) Ss. 74(1), 177 & 214C & Second Schedule , Cl. 105a [as inserted by Finance act, 2022]---Insertion of a new amendment under Clause 105a in the Second Schedule ('Clause 105a') of Income Tax Ordinance, 2001 ('the Ordinance, 2001')---audit proceedings, applicability of---"Tax year"---Scope---"Preceding four tax years"---Scope---Contention of the Petitioner (Pak Telecom Mobile Limited) was that after the insertion of Clause 105a, the Department could not seek audit of the petitioner for the tax year 2018 , as the audit of the petitioner had already been conducted for the tax year 2017, which culminated in the tax year 2021---Validity---Said (new) Clause 105a, was inserted by the Finance act, 2022, meaning thereby that the audit of an income taxpayer could not be conducted in the tax years 2021, 2020, 2019 and 2018---The said promulgated provision Clause 105a in the Income Tax Ordinance, 2001, was provided under the Chapter of Exemptions from applicability of certain provisions, which reflected that it was a kind of concession or benefit and provided that audit under S. 177 of the Ordinance, 2001 and audit under S. 214C of the Ordinance, 2001 shall not apply to a person whose income tax affairs had been audited in any of the "preceding four tax years" ; which clearly provided that the said exemption or concession was only available if the taxpayer had been audited in any of the preceding four tax years while the word "tax year" was defined under S. 14(1) the Ordinance of 2001---The new amendment referred to "preceding four tax years" and it meant the audit of a particular tax year and not the date or year in which the audit was completed---Therefore, petitioner's selection of audit for tax year 2018 (notwithstanding its completion in the year 2021) would be of the tax year 2018 and not of the tax year 2021 to claim any benefit of Clause 105a---It was immaterial when the audit was completed as it would remain an audit for a particular tax year and it was only that tax year (2017 in the present maner) which was relevant for calculating the period of concession under Clause 105a---The finalization of the audit in a particular tax year was not at all relevant nor was it provided in Clause 105a---Record of the petitioner reflected that the audit for the tax year 2017 was conducted and concluded in the year 2021, meaning thereby that no audit/proceedings under S.177(1) of the Ordinance, 2001 were conducted for any of the preceding four years as per the mandate of S. 105a of the Ordinance, 2001 ; hence, the petitioner could not claim the benefit provided under the new amendment under Clause 105a in the Second Schedule of the Ordinance, 2001 introduced through the Finance act, 2002---Constitutional petition, filed by taxpayer / company, being merit-less, was dismissed, in circumstances.

PAK TELECOM MOBILE LIMITED vs FEDERAL BOARD OF REVENUE (FBR) Ss — 2025 PTD 757 ISLAMABAD

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