The Islamabad High Court has barred the Federal Board of Revenue (FBR) from adopting coercive measures for recovery of disputed tax liability from Shifa Tameer-e-Millat University.
The Chief Justice Islamabad High Court in his order dated January 23, 2024, granted a stay and directed the FBR not to adopt coercive measures for recovery of disputed tax liability against Shifa Tameer-e-Millat University.
Through the instant petition, the petitioner has challenged the decision of proceeding under section 140 of the Income Tax Ordinance, 2001.
The Counsel for the petitioner inter alia contended that an estimate was filed by the petitioner, however, in response thereto, demand has been generated, which is not tenable in light of law settled by this Court vide judgment dated 05.09.2016 in the case titled `Mis Pak Telecom Employees Trust Vs. Federation of Pakistan, etc.”
The counsel of Shifa Tameer-e-Millat University in its petition submitted that FBR has issued notice u/s 147 of Income Tax Ordinance, 2001 (Ordinance, 2001) for payment of advance tax of Rs. 27.8 million pertaining to the second quarter of the tax year 2024.
They claimed that Shifa Tameer-e-Millat University is a Non-Profit Organization and had an exemption certificate issued u/s 2(36) of Ordinance, 2001 till the tax year 2019.
The organization applied for the exemption certificate for the tax year 2024 which was rejected by the Respondent Department vide order dated December 14, 2023, due to the non-availability of a PCP report against which Petitioner will file an appeal before the Chief Commissioner.
They submitted before the court that Petitioner is not undertaking any commercial or profit-making activities and is purely involved in charitable activities for poor and needy people hence its income is not subject to taxation and Petitioner is entitled to 100 percent tax credit u/s 100C of Ordinance, 2001.