The Commissioner of Income Tax Zone "A" Karachi vs M/s. Combined
This matter involved appeals filed by the Commissioner of Income Tax against the respondent regarding the imposition of income tax on deemed interest. The core legal question concerned the retrospective application of tax liability on such interest. During the proceedings, the counsel for the appellant clarified that the department did not intend to charge income tax on the deemed interest retrospectively, but rather sought to apply the tax effective from 1st July, 1976, under the provisions of the Repealed Income Tax Act, 1922. The respondent's counsel expressed no objection to this proposed modification. Consequently, the Supreme Court of Pakistan disposed of the appeals in accordance with the statement made by the appellant's counsel, holding that the tax liability on the interest of the loan would be effective from 1st July, 1976. This judgment establishes that tax authorities may limit the application of tax levies to specific prospective dates when conceded by the department, thereby resolving the dispute regarding the temporal scope of the tax assessment.
- Can tax authorities limit the application of tax on deemed interest to a specific prospective date?
- Is the Income Tax Act, 1922 applicable to the calculation of tax liability on deemed interest from 1st July, 1976?
- Income Tax Act, 1922
ORDER
IFTIKHAR MUHAMMAD CHAUDHARY, C.J.---Learned counsel appearing for the appellant contended that the department had not charged income tax on the deeming interest retrospectively but with effect from 1st July, 1976 as the Repealed Income Tax Act, 1922, therefore instead of dilating upon other points of the case, the appeals be disposed of the with the observation that the tax will be charged from by the department from the respondent with effect from 1st July, 1976 on the interest of loan.
2. Mr. Iqbal Salam Pasha learned counsel appearing for respondent in Civil Appeals Nos. 1443-1446 of 1996 had no objection if the appeals are disposed of in these terms. Order accordingly, the appeals are disposed of in view of the statement so made by the learned counsel for the appellant No order as to costs.