KARACHI: Trustees of Karachi Port Trust (KPT) approached the Sindh High Court (SHC) and filed a constitutional petition against show cause notices and seeking exemption from payment of income tax pursuant to section 49(I) of the ordinance 2001.
On 6 November 2020, counsel for the petitioner stated that Additional Commissioner (Audit-III) Inland Revenue, Range-D-III has issued illegal show cause notices dated October 02, 05, 07, and 08,2020 under section 122 (9) red with 122(5A) of the income tax ordinance, 2001.
He further submitted that through the impugned show cause notices, the respondent has conveyed its intention to amend the petitioner’s assessment and charges tax on its income in contravention of section 49(I) and/ or section 100C of the ordinance, 2001, the petitioner is exempt from payment of income tax since it is the alter ego and adjunct of the federal government performing inter alia, function in connection with the affairs of the federation.
He argued that without prejudice to the foregoing, the petitioner holds all income generated from port-related activities and all other money in trust and the same are used solely for the purposes of welfare activities and charitable purposes, it is, therefore, entitled to 100% tax credit under section 100C (2)(e) of the ordinance 2001.
He further argued that the impugned show cause notices are illegal and contrary to the provisions of the ordinance 2001, it is, therefore, liable to be set aside.
Citing chairman FBR, CIR, Audit-III, LTO and additional commissioner Audit-III as respondents, petitioner pleaded the court to declare the impugned show cause notice are illegal and liable to be quashed and also declare that the petitioner is exempt from payment of income tax pursuant to section 49(I) of the ordinance 2001.
