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Court Cases | Ecenterpk.com
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Ecenterpk.com Education Center Pakistan

9Apr/150

Lahore High Court Order Regarding Income Tax of Heads and Principal

 

Form No:HCJD/C-121

ORDER SHEET

IN THE LAHORE HIGH COURT MULTAN BENCH MULTAN

JUDICIAL DEPARTMENT

 

Case     W.P.  No.296/2014.

 

District Headmasters/ Principals     VS   Federation of Pakistan, etc.

Association, Multan through its

President Syed Mehmood Nabi.

S.No. of order/    Date of order/   Order with signature of Judge, and that of parties or counsel,

Proceeding         Proceeding      where necessary

 

14.01.2015   Raja Naveed Azam, Advocate for the petitioner.

Agha. Muhammad Akmal Khan, advocate for the

respondents.

The petitioner through this writ petition has
challenged a clarification circulated by the Central
Board of Revenue/FBR Income Tax Department
dated 18.5.2005, whereby the tax rebate/reduction
granted to the full time teachers or researchers
employed in a non-profit education or research
institution recognized by the Higher Education
Commission, has withdrawn on the ground, that

the     teachers     who   are   performing   any

administrative or managerial job e.g. principals, headmasters, doctors vice chancellors etc. are not entitled to the aforesaid rebate.

  1. The record annexed with this petition was
    examined and scrutinized with assistance of the
    learned counsel for the parties.
  2. It is  found  from  the  record,  that  the
    respondent   department   i.e.   Income   Tax
    Department through a Circular No.3 of 2006 dated

11.7.2006 extended a favour to the members of the

 

 

 

W.P.No.296/2014.                        2

 

teaching faculty by giving 50% to 75% tax rebate on his income from salary. The relevant part of the aforesaid circular is reproduced as under:-

 

“GOVERNMENT OF THE PAKISTAN

(REVENUE DIVISION)

CENTRAL BOARD OF REVENUE

**

C.No.4(5)ITR/06                             Islamabad, July 11, 2006

Circular No.03 of 2006
(Income Tax)

Subject.   COMPUTATION OF INCOME TAX PAYABLE BY
THE  SALARIES  TAXPAYERS  FOR  TAX YEAR
2007  AND  DEDUCTION  OF  ADVANCE  TAX
FROM   SALARY   FOR   THE   TAX   YEAR
COMMENCING 1ST JULY 2006

Tax in the case of a salaried taxpayer shall be
computed in accordance with sections 12, 13 and 14 of Income
Tax Ordinance 2001, read with rules 2 to 7 of income Tax
Rules 2002.  A  salaried  taxpayer  means  where  salary
constitutes more than 50% of the total income. All perquisites,
allowances or benefits, [excepting those covered under Part-I
of the Second Schedule to the Ordinance], are to be included
in the salary and rate of tax prescribed in Part-I of the First
Schedule shall be applied for the tax year 2007 on the gross
figure. The taxation of salaried taxpayer is explained as under:

  1. REBATE FOR TEACHERS AND RESEARCHERS

POSTED IN GOVERNMENT INSTITUTIONS

A full time teacher or a researcher, employed in a non-profit education or research institution recognized by Higher Education Commission (HEC), a Board of Education or a University was entitled to a benefit, under Part III of Second Schedule to the Income Tax Ordinance 2001 and his tax liability stood reduced by an amount equal to 75% of tax payable on his income from salary.

This concession has now been extended to full time teachers and researchers employed in government training and research institutions also.”

  1. The petitioner who are full time teachers,
    welcomed the favour extended by the respondent
    department and  feel  comfortable  but  all  of  a
    sudden the respondent department through circular
    No.6 of 2013 dated 19.7.2013 made amendment in
    second schedule of the income tax and reduced the
    rebate from 75% to 40% and also excluded the
    teaching staff performing any administrative or

 

 

 

W.P.No.296/2014.                        3

 

managerial job. It is necessary to reproduce the
same:-

 

“GOVERNMENT OF THE PAKISTAN

(REVENUE DIVISION)

FEDERAL BOARD OF REVENUE

**

C.No.4(36)ITP/2013                  Islamabad, the 19 July, 2013

Circular No.6 of 2013
Income Tax

Subject.   FINANCE   ACT,         2013    -   EXPLANATION

REGARDING   IMPORTANT   AMENDMENTS
MADE IN THE INCOME TAX ORDINANCE, 2001

Salient features of the amendments made in the Income Tax Ordinance, 2001 through Finance Act, 2013 are explained as under:-

  1. AMENDMENTS IN SECOND SCHEDULE

In Second Schedule to the Income Tax Ordinance,
2001 some of the amendments made are as follows:

(a)…

(b)…

(c)…

(d) In Part-III in clause (2) reduction in tax liability of the tax payable on income from salary equal to 75% has been reduced to 40% in the case of:

(i) a full time teacher employed in a non profit
educational  institution  duly  recognized  by
Higher  Education  Commission,  a  Board  of
Education or a University recognized by the
Higher   Education   Commission,   including
government training institutions.

(ii)   a full time researcher employed in a research
institution duly recognized by Higher Education
Commission,  a  Board  of  Education  or  a
university recognized by the Higher Education
Commission,  including  government  research
institution.

(iii)     It is further clarified that a full time teacher

means a person employed purely for teaching
and  not  performing  any  administrative  or
managerial jobs e.g. principals, headmasters,

directors,        vice-chancellors,       chairmen,

controllers etc. similarly a full time researcher
means a person purely employed for research
job only in a research institution and such
institution  is  purely  performing  research
activities.”

 

  1. The respondent department did not restrain
    itself to this extend but also issued a clarification

 

 

 

W.P.No.296/2014.                        4

 

of additional 50% tax reduction in the case of full time teachers, which is reproduced as under:-

 

“GOVERNMENT OF THE PAKISTAN

CENTRAL BOARD OF REVENUE
INCOME TAX DEPARTMENT

….

MTU/2005/
May 18, 2005

District Accounts Officer Sherikhupura

Subject. Clarification of additional 50% tax reduction in the
case of full time teachers.

Reference Several applications No(s). Nil Dated May 18, 2005 by the District Sheikhupura

Head Masters.

It is to clarify that according to clause (2) part III of second
schedule of income tax ordinance 2001, is reproduced as

under:

“In addition to the reduction specified in sub-clause (i),
the tax payable by a full time teacher or a researcher,
employed  in  a  non  profit  education  or  research
institution including government training and research
institution duly recognized by a Board of Education or
a university or the University grants commission, shall
be further reduced by an amount equal to 50% of the
tax payable after the aforesaid reduction”

In order to qualify for tax reduction under the above noted provision, the following conditions have to be fulfilled:

  1. A full time teacher which means

   A  regular  employee      (full  time  faculty

member);

   Not  a  part  time  teacher   (visiting  faculty-

member);

According to code of action “Dastoor-ul-Amaal” issued by Education Department of Punjab.”

  1. Non profit education institution which means

  An institution which has been established not
to earn profit.

Since both of these conditions are met with in their cases.
Hence, Head Masters are eligible for this additional 50% tax
reduction.

(Ashraf Ahmed Ali)

Commissioner Income Tax ”

  1. Learned counsel for the petitioner submits
    that the  concession  given  by  the  respondent
    department in payment of income tax on salary has
    already been acted upon and the petitioner and
    others  are  practicing  the  same,  therefore,  the
    respondents  under  the  principal  of  loscus
    poenitentiae, cannot withdraw the same by any

 

 

 

W.P.No.296/2014.                        5

 

clarification  and  without  giving  any  right  of hearing to the petitioner/beneficiaries.

  1. In this case, the respondents department in
    fact, in a very clandestine manner, excluded the
    persons who although are teachers, teaching in an
    educational institution  i.e.  school,  college  or
    university but also performing administrative or
    managerial job.  The respondent department in fact
    has clarified the relevant provision in a manner so
    that the persons who although are teachers but
    performing managerial job too have been excluded
    which in any case cannot be the intention of the
    law maker at the time of granting this benefit to the
    petitioner.
  2. Now it is to be seen, whether a teacher i.e.
    headmaster, principal etc., can be excluded from
    the beneficiaries of the afore-referred notification
    on the  ground  they  are  also  performing  the
    managerial duty. In many educational institutions,
    the headmaster or the principal also teach the
    students and further if a teacher after some time
    promoted as headmaster and as the case may be, a
    lecturer as principal, cannot be excluded from the
    definition of a teacher. In fact the respondent
    department  has  made  a  novel  clarification  or
    interpretation, which in any case is against the
    principal of interpretation.
  3. The benefit and concession granted by the
    respondent department in the shape of rebate in
    payment of income tax on the salary, as admitted
    by the respondent has already been acted upon,
    therefore, the  right  accrued  in  favour  of  the

 

 

 

W.P.No.296/2014.                        6

 

petitioner by way of the aforesaid circular can in
any manner not be taken away or withdrawn.
Reliance is placed upon Arif Hussain Dar v. Board
of Revenue through Secretary, Muzaffarabad and
5 others (PLD 2002 Azad J&K 14), Aziz Ahmad v.
Provincial Police Officer (I.-G.P.) Punjab Lahore

and   6  others    (PLD   2005  Lahore   185)  and

Muhammad Nadeem Arif and others v. Inspector-
General of Police, Punjab, Lahore and others

(2011 SCMR 408). In PLD 2002 Azad J&K 14
(Supra), it was held that “the Policy or the Notification
cannot  override  the  Statutory  Rules  framed  by  the
Government under a Statute.” In PLD 2005 Lahore
185 (Supra) it was held that “The Departmental

circular is not more than a departmental instructions. The
Departmental circular/instruction even cannot be called a
rule. The Departmental circular are good enough for the
internal management and control but they cannot confer
a right or deprive a person of a right, which is only
possible on the basis of a statutory provisions or a rule
made by a competent authority under the concept of
delegated legislation, as held in Sub. Muhammad Asghar

  1. Safia Begum and others PLD 1976 SC 435.” In 2011
    SCMR 408, the  Hon’ble  Supreme  Court  of
    Pakistan held that “The learned High Court in the
    impugned judgment after quoting all the relevant rules
    and provisions of Police Act had given findings of fact
    that Office Order dated 23-2-2002/8-11-2002 was issued
    by the Inspector-General of Police without approval of the
    Government of the Punjab, therefore, the same has no
    legal sanctity. Section 12 of the Police Act confers power
    upon the Inspector-General of Police to frame rules after
    securing approval from the Government of the Punjab.”

Even otherwise, the learned counsel for the
respondent   could   not   refer   any   plausible

 

 

 

W.P.No.296/2014.                        7

 

explanation or rebuttal to the contention or claim agitated by the petitioner.

 

  1. In view  of  the  above,  the  impugned

notification is not sustain in law, resultantly, this petition is allowed. No order as to cost.

(Ali Akbar Qureshi)

Judge

*Jamshed *

Approved for reporting

Judge

for further detail about the judgement

http://sys.lhc.gov.pk/appjudgments/2015LHC986.pdf

Filed under: Court Cases No Comments
16Mar/150

Divorced Daughters and Unmarried Sisters also entitled for Family Pension, says Ombudsman Punjab

HANDOUT No. 149
Divorced Daughters and Unmarried Sisters also entitled for Family Pension, says Ombudsman Punjab
LAHORE, January 14,:
Punjab Government, following the directions of Ombudsman Punjab, has made amendment in Punjab Pension Rules according to which divorced daughter and unmarried sister of the deceased government employee would also be entitled for grant of family pension till life after his widow, infants and unmarried daughters. Punjab Finance Department has issued amended notification and copies of the same have been sent to all Administrative Secretaries, Heads of the Attached Departments, DCOs, Lahore High Court, Accountant General Punjab, All District Advisors of the Ombudsman Punjab and District Accounts Officers for compliance with effect from May 15, 2013.
According to details, Samina Gulnar Khanam, and Zubaida Bibi, divorced daughters of deceased government employees Fazal Hussain and Abdul Rahim respectively, lodged applications to Ombudsman Punjab that they had no regular source of income after the death of the their father and the payment of family pension was also stopped as they were not entitled for the same as per existing rules although they were dependent in their houses. In similar applications addressed to Ombudsman Punjab, Ms. Sakina Begum and Ata Bibi, unmarried sisters of late Shafqat Ara, and late Hajira Begum respectively pointed out that they were dependent in the home of their sisters which were government employees but payment of pension was stopped with their death. Ombudsman Punjab, Javed Mahmood directed Incharge Mohtasib Punjab Pension Cell Wazir Ahmad Qureshi to probe the issue and submit recommendations for appropriate amendments in existing rules. Ombudsman Punjab was told that as per Finance Department’s notification, the divorced daughter was entitled for grant of family pension till her re-marriage in 2013. Ombudsman Punjab observed that the widowed daughters and unmarried sisters of the deceased pensioners’ civil servant, wholly dependent and residing with the deceased pensioners, do face the similar agonies and miseries as the widowed daughter and unmarried sister of the late father and late brother. The categories of divorced daughters and unmarried sister are left with no regular income to support their livelihood, health care and social society after losing the shelter of father and brother, said the Ombudsman Punjab. The complainants lost necessities of life such as food, housing, education and medical relief. The safeguard for its citizen provided under Articles 9 and 38 of the Constitution made the State responsible to provide basic necessities of life such as food, housing, education and medical relief. The inclusion of widowed daughter in amended notification dated May 15, 2013 for the grant of family pension justified the implementation of the provisions of Constitution but the case of divorced daughter and unmarried sisters tended to commensurate with the case of widowed daughter, who already brought parallel to the unmarried daughter for the purpose of grant of family pension which is discriminate and prohibited under the provisions of article 25 of the Constitution of Islamic Republic of Pakistan. Ombudsman Punjab directed Punjab Government to make amendments accordingly to include the divorced daughter and unmarried sister as well in the Punjab Pension Rules.
*****
149

Filed under: Court Cases No Comments
14Mar/150

HANDOUT No. 154 Ombudsman Punjab asks AG & CGA to intervene in Double Pension issue

HANDOUT No. 154
Ombudsman Punjab asks AG & CGA to intervene in Double Pension issue
LAHORE, February 16:
Ombudsman Punjab Javed Mahmood has written letters to Auditor General of Pakistan and Controller General of Accounts Pakistan to intervene and play their constitutional role in providing legal right of double pension to the pensioners of 75 and above. He has pointed out that Auditor General of Pakistan and Controller General of Accounts Pakistan have been entrusted in Auditor General of Pakistan and Controller General of Accounts Ordinance 2001 to pre audit of pensions of government employees through out the country both should play their constitutional role in the issue as Federal Government as well as provincial governments of Khaiber Pakhtoonkha, Sindh and Balouchistan have already been paying double pension to the retired employees of 75 and above.
Punjab Finance Department is interpreting the judgment orders of Superior Courts according to its wish which tantamount not only to deride the haplessness of poor old pensioners but judgment orders also. Establishment of “Complaints Cell” at Lahore by Punjab Finance Department after judgment orders to restore double pension for the pensioners of 75 and above is illegal. This is pointed out in a letter written by the Ombudsman Punjab Office to Finance Secretary Punjab following the issue of arrears of double pension to retired government employees of 75 and above. Copies of the letter have also been forwarded to all Administrative Secretaries, Commissioners, Heads of Attached Departments, DCO’s, Accountant General Punjab and all DAOs, say the letters.
Pensioners Day was celebrated in all offices of Ombudsman Punjab today in this connection, a large number of retired govt. employees attended. Wazir Ahmad Qurseshi, Incharge Mohtasib Punjab Pension Cell, pointed out that Supreme Court of Pakistan in its judicial order on March 31, 2014, declared pensioners of 75 and above entitled for restoration of pension (double pension). Poor old pensioners had to fight their case at Punjab Services Tribunal, Lahore High Court, Federal Services Tribunal and Supreme Court of Pakistan and finally won. In compliance to the court orders Federal Govt. and provincial governments of KPK, Sind and Balouchistan started payment of pension arrears to the pensioners of 75 and above but retired employees of the Punjab could not get the fruits of the court orders. As the compliance of the orders of superior court was denied so poor pensioners again went into legal combat and filed a contempt of court petition at Lahore High Court. Punjab Finance Department agreed and ensured to pay legal arrears of pension to the retired government employees of 75 and above and submitted a payment plan according to which the cases of all the entitled pensioners were required to be taken up from February 01, 2015 as the court orders were in rem requiring not to go court by the individual pensioner. Finance Department Punjab, in place of issuing a notification following the court orders and making arrangements for smooth payment of arrears of pension, established a “Complaint Cell” at Lahore and directed the old pensioners of 75 and above to appear in the ‘cell’ and get their cases cleared before further processing. Directions to appear in centrally controlled Complaint Cell at Lahore, for scrutiny, personal hearing etc in old age with trouble and wastage of money blended with treatment of the staff of the “Cell”, would be nothing but apprehended mishandling of old aged respectable pensioners. In terms of provision of Controller General of Accounts Ordinance, 2001, it is the prerogative of the CGA, through its subordinate offices i.e. AG Punjab and the District Accounts Offices to exercise prescribed pre-audit checks on cases of restoration of commuted portion of pension before payment of arrears, so accrued, is paid by DAOs/TO Lahore. The functions of AG and DAOs have been attempted to be assumed by the “Complaint Cell” despite the fact that the “Complaint Cell” is not in possession of any of record needed for restoration of commuted portion of pension. According to rules the arrears of pension would by paid from the DAO from where already pension is being drawn. The real course of action, in terms of delivery of the benefits of the Judgment of court was the establishment of “Special Cell” in AG Punjab and DAOs in the Punjab, aimed at to ensure speedy, prompt and effective revision of pension of all pensioners without the personal visits of the pensioners.
*****
154 154-1

Filed under: Court Cases No Comments
14Mar/150

Proceedings in pension stopped in Ombudsman Offices

HANDOUT No. 156

Proceedings in pension stopped in Ombudsman Offices

 

LAHORE, February 27:

Lahore High Court has declared the payment of pensionary benefits to a retired government employee relates to the terms and conditions of the service of the employee which is ouster of the Ombudsman’s jurisdiction. Ombudsman Punjab, Javed Mahmood, in a circular to all District Advisors has directed all kind of proceedings in pending /under investigation cases pertaining to pension be stopped. He has also directed not to entertain or take up any new compliant about payment of pension.

*****

156156-Tickers

Filed under: Court Cases No Comments