KARACHI: The Sindh High Court (SHC) dismissed a reference application filed by the Commissioner Inland Revenue through Kashif Nazeer against M/s Dawood Islamic Bank Limited (Burj Bank).
On 13 April 2021, a two-member bench, comprising Justice Muhammad Junaid Ghaffar and Mr Justice Agha Faisal heard the case.
After the hearing, court passed a detailed order and observed that “through this Reference Application, the Applicant has impugned Order dated 25.11.2015, passed by the Appellate Tribunal, Inland Revenue, Karachi in ITA No. 936/KB/2013 (Tax Year 2009) arising out of an amended assessment order under section 122(1)(5) of the Income Tax Ordinance, 2001.
Learned counsel for the applicant has read out the relevant finding of the learned tribunal as well as of the assessing officer and submits that the forums below have not appreciated the law, as according to the officer the respondent had failed to charge interest on amounts disbursed to the associates while it paid profit on debt on the amount received from them; and lastly, per learned Counsel, the matter ought to have been remanded for an appropriate treatment instead of annulling the same.
Court observed that perusal of the aforesaid finding reflects that apparently the assessing officer under some misconception treated the repayment of the deposits of SSGC as loan advanced by the bank to SSGC without charging of interest/mark up and worked out the same as per formula adopted by him in his amended assessment order under section 122(5) of the Ordinance by treating it as income chargeable to ITRA No.74 of 2016 Page 3 of 3 tax under section 108/109 of the Ordinance; and he was confronted by the Tribunal with these factual aspect and his wrong treatment to such a transaction and was unable to give satisfactory explanation to support such treatment given by him in his Order.
We have confronted the learned counsel for the applicant on this aspect of the matter and he has argued that in that case matter ought to have been remanded instead of annulling the amended assessment order. However, we are afraid this is not a correct approach. There isn’t any question of law apparently in this matter, whereas, the Applicant has not been able to justify its treatment as above; hence, it appears to be merely a factual question and does not require interference by us in our Reference Jurisdiction.
Accordingly, this reference application, being misconceived, is hereby dismissed in Limine. Let copy of this order be sent to Appellate Tribunal Inland Revenue (Pakistan) at Karachi, in terms of sub-section (5) of Section 133 of Income Tax Ordinance, 2001.
