COMMISSIONER OF INCOME TAX VS PAK CHINA CHEMICALS (AOP), 2017 PTD-LAHORE-HIGH-COURT-LAHORE 768 (2017)

Income Tax Ordinance (XXXI of 1979) [since repealed]---

----Third Sched. Rr. 5A, 5B & 5C---Depreciation allowance---Association of Persons (AOP)---Whether the term 'industrial undertaking' as used in Rr. 5A, 5B & 5C of the Third Schedule to the Income Tax Ordinance, 1979 included an Association of Persons (AOP)---Rule 5B of the Third Schedule to the Income Tax Ordinance, 1979 was applicable to industrial undertakings; R. 5C of the Schedule, applied to only those industrial undertakings as referred to in R. 5A---Rule 5A of the Schedule was applicable only to the industrial undertakings owned and managed by a company---Association of Persons(AOP) being not a limited company, therefore, it was not entitled to the benefit of R.5C of the Third Schedule of Income Tax Ordinance, 1979.

Sarfraz Ahmad Cheema, with Asim Ahmad CIR LTU-I and Dr. Ishtiaq Ahmad CIR, LTU for Applicant.

ORDER

C.M. No.468 of 2016

This is an application for restoration of the titled Reference, which was dismissed for non-prosecution on 02.03.2015.

C.M. No.469 of 2016

2.This is an application for condonation of delay in filing the application for restoration of the titled Reference.

3.For the reasons stated in the CMs duly supported with an affidavit, both the applications are allowed, the delay is condoned and the titled Reference is restored to its original number and is fixed for hearing today with the consent of the learned counsel for the Applicant.

Main Case

4.This is a Reference under Section 133 of the Income Tax Ordinance, 2001.

5.Following question of law is proposed for our opinion, which is asserted to have arisen out of order dated 12.12.2006 passed by the Income Tax Appellate Tribunal Lahore Bench, Lahore ("Appellate Tribunal"):--

"Whether on the facts and circumstances of the case the term "Industrial Undertaking" as used in Rules 5A, 5B and 5C of the Third Schedule to the RO, 1979 includes an "AOP"?

6.The impugned order finds that Rule 5B of the Income Tax Ordinance, 1979 ("Ordinance") is applicable to industrial undertakings. Therefore since the Respondent is an industrial undertaking, the Assessing Officer was not justified to hold that the facility could not be availed by the Respondent. With respect to Rule 5C of the Ordinance, the impugned order finds that the benefit is available to only those industrial undertakings as referred to in Rule 5A of the Ordinance. Rule 5A is applicable only to the industrial undertakings owned and managed by a company. Since the Respondent was not a limited company, therefore, it was not entitled to the benefit of Rule 5C of the Ordinance.

7.We have heard the learned counsel for the Applicant and find that the question of law as argued by the Applicant does not arise in this case as the interpretation given by the Appellate Tribunal is clearly in accordance with law.

8.Under the circumstances, we decline to exercise our jurisdiction. Reference application is decided against the Applicant Department.

9.Office shall send a copy of this order under seal of the Court to the Appellate Tribunal as per Section 133(5) of the Income Tax Ordinance, 2001.

MWA/C-1/L Reference answered.