I.T.A. No.2245/KB of 2001, decided on 9th April, 2002 VS I.T.A. No.2245/KB of 2001, decided on 9th April, 2002, 2002 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2302 (2002)

(a) Income‑tax‑‑‑

‑‑‑‑Bank employee‑‑‑Compensation; Leave encashment; G. P. Fund and Medical Allowance‑‑Taxability‑‑‑Taxability under such heads was upheld by the Tribunal.

(b) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑S. 14 & Second Sched., Part I, Cl. (26)‑‑‑Exemption‑‑‑Pension commutation‑‑‑Addition made under the head pension commutation was deleted by the Tribunal as such amount had been received out of pension fund approved by the Commissioner of Income‑tax and the same was covered by exemption available under Cl. (26) of the Second Sched of the Income Tax Ordinance, 1979.

(c) Income Tax Ordinance (XXXI of 1979)--‑‑

‑‑‑‑Second Sched., Part I, Cl. (26A)‑‑‑Exemption‑‑‑Benevolent fund‑‑ Taxability‑‑‑Addition made in respect of benevolent fund was set aside by the Tribunal with the direction to verify the bona fides of the certificate and if it was proved that the payments had been received from a fund established .as per provision of C1.26(A) of the Second Sched. of the Income Tax Ordinance, 1979 then the same may be allowed‑‑ Consequential relief, if any, was also allowed.

Abdul Tahir Ansari, I.T.P. for Appellant.

Inayatullah Kashani, D.R. for Respondent.

Date of hearing: 9th April, 2002.

ORDER

The appellant through this appeal has objected to the impugned order of the learned AAC on the following grounds:‑‑‑

(1)That the learned AAC as well as the DCIT passed the order without keeping in view the facts of the case and not abide the order with law.

(2)That the learned AAC/Assessing Officer has erred is treating the pension and benevolent fund of the appellant as not exempted, while same is exempted under the rule of law.

(3)That the learned AAC and learned DCIT has avoided the validity of the agreement between Department and Assessee as per circular.

(4)That the learned AAC/DCIT not computed the income on three years average basis as per circular.

(5)That the learned AAC/DCIT was prejudious in granting Medical Allowance and avoid the rule and law in this regard.

(6)That the order passed by the learned AAC/DCIT is printing per pharma assessment order which is not the judicial order.

(7)That the learned AAC and as well as the learned DCIT has not given sufficient time to argue our case.

(8)That the learned AAC/DCIT has not given any heed to the house property mark‑up on loan and as well as Zakat. While the both are exempted in law.

(9)That the appellant craves permission to add, alter or amend the grounds of appeal during the course of proceedings.

2. On perusal of the above said grounds, we have found that the grounds are to the extent vague, non‑specific and argumentative but the learned representative of the assessee at the very outset submitted that the issue involved in the instant appeal are already decided by this Tribunal. He has in this respect placed before us the order, dated 12‑1‑2002 deciding sixteen appeals filed by sixteen ex‑employees of United Bank Limited of the same Circle titled as:‑‑

(1) I.T.A. No.2196/KB/DB of 2001

(Assessment year 1998‑99)

(2) I.T.A. No.2193/KB/DB of 2001

(Assessment year 1998‑99)

(3) I.T.A. No.2195/KB/DB of 2001

(Assessment year 1998‑99)

(4) I. T. A. No. 2094/KB/DB of 2001

(Assessment year 1998‑99)

(5) I. T. A. No. 2204/KB/DB of 2001

(Assessment year 1998‑99)

(6) I.T.A. No.2087/KB/DB of 2001

(Assessment year 1998‑99)

(7) I.T.A. No.2086/KB/DB of 2001

(Assessment year 1998‑99)

(8) I.T.A. No.2095/KB/DB of 2001

(Assessment year 1998‑99)

(9) I.T.A. No.2096/KB/DB of 2001

(Assessment year 1998‑99)

(10) I.T.A. No.2097/KB/DB of 2001

(Assessment year 1998‑99).

(11) I.T.A. No.2090/KB/DB of 2001

(Assessment year 1998‑99)

(12) I.T.A. No.2092/KB/DB of 2001.

(Assessment year 1998‑99)

(13) I,.T.A. No.2091/KB/DB of 2001

(Assessment year 1998‑99)

(14) I.T.A. No.20,89/KB/DB of 2001

(Assessment year 1998‑99)

(15) I.T.A. No.2088/KB/DB of 2001

(Assessment year 1998‑99)

(16) I.T.A. No.2093/KB/DB of 2001

(Assessment year 1998‑99)

Under section 63

(1)Mr. Muhammad Rafiq Bhutto, Ex‑employee United Bank

Limited, Sukkur.

(2)Mr. Muhammad Suleman, Ex‑employee United Bank Limited,

Sukkur.

(3)Mr. Muhammad Shoaib, Ex‑employee United Bank Limited,

Sukkur.

(4)Mr. Abdul Jabbar Memon, Ex‑employe UBL, Sukkur.

(5)Mr. Abdul Haleem Ansari, Ex‑employee United Bank Limited,

Sukkur.

(6)Mr. Abdul Ghani Sheikh, Ex‑employee United Bank Limited;

Sukkur.

(7)Mr. Abdul Mansoor, Ex‑employee United Bank Limited,

Sukkur.

(8)Mr. Liaquat Ali Memon, Ex‑employee, United Bank Limited;

Sukkur.

(9)Mr. Ahmed Khan, Ex‑employee United Bank Limited, Sukkur.

(10)Mr. Azhar Ali Khan, Ex‑employee ‑ United Bank Limited, Sukkur.

(11)Mr. Saleem Akhtar, ex‑employee United Bank Limited, Sukkur.

(12)Mr. Liaquat Ali Pathan, Ex‑employee United Bank Limited, Sukkur.

(13)Mr. Muhammad Farooq Rauf Ex‑employee United Bank Limited, Sukkur.

(14)Mr. Muhammad Rafiq. Ex‑employee UBL, Sukkur.

(15)Mr. Abdul Qayoom, Ex‑employee United Bank Limited, Sukkur.

(16)Mr. M. Shahid, Ex‑employee United Bank Limited,

Sukkur Appellants.

versus

The Special Officer of Income Tax Circle‑II,

Sukkur ..Respondent

According to the learned counsel, the case of the present appellants are identical to the above‑referred decision of this Tribunal. In this case also the amount received as golden hand shake scheme has been taxed by the Department and the issue of tax liability has been decided in the light of relief provided by the Hon'ble High Court. In view of the Hon'ble High Court judgment while upholding the taxability of the amount by way of compensation package under the golden hand shake scheme, the liability should be directed to be re‑computed in accordance with the decision of the Hon'ble High Court at Lahore. In respect of addition made on account of payment received by benevolent fund, this Tribunal has set aside the addition in this respect for fresh adjudication by the Assessing Officer after verifying the bona fide of the certificate submitted by the appellant, as on behalf of the assessee certificate issued by the Operation Manager, United Bank Limited certifying that the payments were received from benevolent fund established under Central Employees Benevolent Fund and Group Insurance Act. Learned counsel has submitted that this issue may please be set aside in accordance with the decision of this Tribunal with the direction as made in that order. Regarding taxability of amount received by way of commutation of pension, learned counsel has submitted that the Tribunal has already deleted the addition made under this head for the reason that the payments received out of pension fund are approved by the Commissioner of Income Tax, Companies‑I, Karachi under Part II of 6th Schedule to the Income Tax Ordinance, 1979 vide approval No. JUD‑I S(76)/E.T./97‑98/409, dated 11‑8‑1997.

3. On the other hand, Mr. Inayatullah Kashani, learned Represntative of the department is supporting the impugned orders of the officers below. We have heard learned Repiesentatives of both the parties and have also perused the impugned order of the learned AAC, assessment order, the order of this Tribunal referred by the learned counsel for the appellant, dated 12‑1‑2002. We have found that as far the taxability of:‑‑

(1) Compensation;

(2) Leave encashment;

(3) G. P. Fund: and

(4) Other benefits, (Medical).

this Tribunal has already following the decision of the Hon'ble Lahore High Court held to be taxable, therefore, the taxability under these heads is upheld. Regarding pension commutation, we have found that this Tribunal has deleted the addition in this respect as the amount in this respect had been received out of pension fund approved by the Commissioner of Income Tax, Companies‑1, Karachi under Part‑II of the Second Schedule vide approval No. JUD‑1/S(76)/E.T/97‑98/409, dated H 11‑8‑1997. As the amount have been received under an approved pension fund scheme covered by exemption available under clause (26) of the Second Schedule, the addition in this respect is deleted. Regarding benevolent fund, we have found that the Tribunal has already set aside the addition in this respect for fresh adjudication by the Assessing Officer, as the appellants have submitted the certificate which has also been submitted before us issued by the Operation Manager, United Bank Limited indicating that the payments were received from benevolent fund C established under the Central Employees Benevolent Fund and Group Insurance Act. The addition in this respect, therefore, is set aside, for fresh adjudication by the Assessing Officer after verifying the bona fide of the certificate. It is directed that if it is proved that the payments had been received from a fund established as per the provision of clause 26(A) of the Second Schedule of the Income Tax Ordinance, 1979 then the same may be allowed. The Assessing Officer is also directed to allow consequential relief if any to the appellant.

4. The appeal is allowed to the extent and in the manner as indicated above.

C.M.A./M.A.K./318/Tax(Trib.)Order accordingly.