Islamabad: The Islamabad High Court suspended the application of forty percent additional tax on windfall income of banks till December 8 and sought a response from the FBR and other parties.
The application filed by the private bank was heard by Islamabad High Court Justice Sardar Ejaz Ishaq Khan. Salman Akram Raja and Asad Ladha Advocate appeared for the petitioners and told the court that on November 21, 2023, the government issued an SRO No. 1588(1) under Section 99D of the Income Tax Ordinance, 2001 under which the banks An additional tax of 40% is levied on fund fall income which is due by November 30.
The lawyers argued that Section 99D of the Income Tax Ordinance 2001 empowers the federal government to levy a tax ranging from 0 to 40 percent which is contrary to Article 77 of the Constitution.
The petitioners’ lawyers said that this SRO was issued by the caretaker federal government, which has no authority to impose new taxes. Under Section 99D, the matter of additional tax must be presented in the National Assembly, the notification of additional tax must be present in the National Assembly, if the National Assembly is present, it is possible that the notification of additional tax If the National Assembly does not support the additional tax, the tax will not apply.
He requested the court to set aside the notification of 40% additional tax levied on windfall income as illegal and suspend the notification pending the decision of the petition.
After hearing the preliminary arguments of the petitioners’ lawyers, the court issued a notice to the parties and suspended the notification till December 8. During the hearing, FBR’s lawyer Osama Shahid Advocate received the notice.
The court also issued a directive to issue a notice to the Attorney General for assistance on the constitutional issue.