The Lahore High Court on Friday suspended notices for the recovery of agriculture income tax issued to hundreds of individuals for the period prior to promulgation of Finance Act 2013. The petitioners had challenged the tax recovery notices issued by district collectors for the year 2012.
The court also sought replies from the district collector, Federal Board of Revenue, federal and Punjab governments by June 26. Petitioners counsel Muhammad Ajmal Khan argued that the district collector of the provincial government had no powers to collect the agriculture income tax for the period prior to promulgation of Finance Act, 2013. He said the government inserted a section 3-B in Punjab Agricultural Income Tax Act 1997 giving retrospectively effect, which was a violation of settled tax laws and statutes.
He pointed out that all the tax laws envisaged that any amendment in the law will have prospective effect, but not retrospective. However, he said, the government had been issuing notices for the tax recovery to the petitioners while relaying and misinterpreting a Supreme Court judgment. He further argued that the agricultural income was exempted under the provisions of Income Tax Ordinance, 2001.
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