Act/Law wise: Judgment of Supreme Court of Bangladesh

ALL A B C D E F G H I J K L M N O P Q R S T U V W X Y Z



Income Tax Ordinance, 1984
Section/Order/Article/Rule/Regulation Head Note
Section 29(1)

Per MM Ruhul Amin J : (agreeing)—The basic and essential conditions on which Zakat becomes obligatory are not at all applicable to the petitioner, and, as such, the petitioner bank is not required to pay Zakat and hence not entitled to get exemption under section 29(1) of the Income Tax Ordinance, 1984 on account of payment of Zakat The review petitions are accordingly, liable to be dismissed. Islami Bank Bangladesh Ltd vs Commissioner of Taxes 14 BLC (AD) 145. ....View Full Judgment

Section 29(1)(XXVII)

Per Justice Md Ruhul Amin CJ (delivered the main judgment) —The payment as claimed by the petitioner on the head of 'Zakat' on behalf of the depositors or account holders for flourishing of the business has no nexus to carry on his business and, as such, the exemption claimed in respect of the amount said to have been paid on the head 'Zakat' does in no way come within the provision of section 29(1) (XXVII) of the Ordinance. Such payment, termed as 'Zakat', by the corporate body, on behalf of its depositors/customers, cannot be considered to have been made towards 'Zakat' which said to have led to flourishing of its business and for that cannot be considered covered by the provision of section 29(1)(XXVII) of the Ordinance. Islami Bank Bangladesh Ltd vs Commissioner of Taxes 14 BLC (AD) 145. ....View Full Judgment

Section 29(1)(XXVII)

Per MA Matin } : (agreeing)—Since the petitioners are under no obligation to pay any zakat as juridical persons they are also not authorised to pay zakat on behalf of their account holders and therefore, they are not entitled to any exemption of taxes from their income within the meaning of section 29(1)(XXVII) of the Income Tax Ordinance, 1984. Islami Bank Bangladesh Ltd vs Commissioner of Taxes 14 BLC (AD) 145. ....View Full Judgment

Sections 29(1) and 44

Zakat as a concept and a pillar of Islam is not applicable to a juristic person like bank.
The Appellate Division observed that the High Court Division came to a finding that the petitioner/company was not entitled to get any benefit of deduction of income from business on Zakat expenditure as it did not fall within the ambit of section 29(1) (XXVII) of the Ordinance. The High Court Division further found that the petitioner was not entitled to any exemption on the basis of the guidelines of the Bangladesh Bank which was not applicable in case of assessee-bank. Therefore, the High Court Division concluded that the Tribunals committed no error law in passing the orders impugned before it and rather the Tribunals had taken correct decision in the matter. Accordingly, both petitions are dismissed.
Islami Bank Bangladesh Limited-Vs.- The Deputy Commissioner of Taxes and another(Syed Mahmud Hossain J) 6 ALR (AD) 2015 (2)213 ....View Full Judgment

Section 33

Whether the assessee has invested a portion of the income in profitable businesses, the profit is also utilized for charitable purposes, and there¬fore, it is entitled to exemption in accordance with Part A of the Sixth Schedule.
The Appellate Division held that the submission of the learned counsel is devoid of substance. Though the assessee has created the trust for charitable purposes, it has been carrying on commercial business which are beyond the main object for which the trust was created. If a trust was created for charitable purposes and it entered into business with trust property, such business is not directly related to the objective of the trust. The business is carried on to meet the expenses of the employees of trust or for the livelihood of some other persons, but the proviso has restricted the scope and general exemption. More so, after the amendment of para¬graph 1, the assessee cannot get the benefit of exemption, inasmuch as, it failed to show that the in-come has been derived from the house property only. The explanation made it clear that sub-paragraph (1) shall not apply in the case of NGO registered with NGO affairs Bureau. The trust has been registered under the Societies Registration Act and registered with the NGO Bureau, and therefore, it will not get the benefit of paragraph 1, Part I of the said schedule. On perusal of the returns submitted by the assessee the Deputy Commissioner of Taxes came to the conclusion that the assessee transferred BRAC Printer’s income from taxable ac¬count to non-taxable account; that the income from Arong Craft Project was not correct and added the income under section 33 of the Ordinance. We find no infirmity in the assessment.
Commissioner of Taxes -Vs.- Bangladesh Rural Advancement Committee (BRAC), 75, Mohakhali, Dhaka (Civil) 14 ALR (AD) 01-09 ....View Full Judgment

Section 35(3)

The provision in section 35 (3) of the Ordinance, 1984 does not exonerate the assessee from supplying evidence in support of the claims for allowances/deductions– Section 35(3) of the Ordinance indeed directs the assessee to furnish a copy of the trading account, profit and loss account and the balance sheet of the income year certified by a Chartered Accountant, but that does not obviate the requirement to provide evidence in support of the claims made by the assessee. We reiterate the finding of the High Court Division in the decision reported in 58 DLR 531 that accounts audited by a firm of Chartered Accountants cannot be said to be sacrosanct. When the tax authority indicates that any claims are disallowed on account of lack of verifiable evidence, it is incumbent upon the assessee to satisfy the tax authority by providing necessary supporting evidence. The provision in section 35 (3) of the Ordinance, 1984 does not exonerate the assessee from supplying evidence in support of the claims for allowances/deductions. The appeal is allowed. The judgement and order by the High Court Division is set aside. …Commissioner of Taxes =VS= Conference & Exhibition Mgmt Ser. Ltd., (Civil), 2020 (1) [8 LM (AD) 34] ....View Full Judgment

Section-92

Recover taxes–
Both the appeals are disposed of and the impugned judgment delivered by the High Court Division is set aside and the proceedings of the Special Cases pending before the Special Judge, Dhaka abated and the appellant is at liberty to recover taxes from the heirs of respondent No. 1 of both the appeals as per section 92 of the ordinance. .....AC of Taxes =VS= BM Baker Hossain, (Civil), 2017 (2)– [3 LM (AD) 22] ....View Full Judgment

Section 92

We are of the view that the legal representatives shall be liable to pay tax or other sum payable under Ordinance but the liabilities of the legal representatives under this Ordinance shall be limited to the extent to which the estate of the deceased is capable of meeting the liability. .....AC of Taxes =VS= BM Baker Hossain, (Civil), 2017 (2)– [3 LM (AD) 22] ....View Full Judgment

Section 93

Re opening the assessment earlier accepted by the authority.
The provision in section 93 of the Income Tax J Ordinance is that when in finalizing the assessment certain fact or facts is/are escaped notice of the authority or in other words income which ought to have been disclosed by the assessee in his Income Tax return but he did not do so and that later on said nondisclosure comes to the notice to the Income Tax Authority and that having had that fact been before the Authority at the time of finalizing the assessment, the assessment would have been otherwise, then in that situation to avoid loss of revenue the provision of section 93 of the Income Tax Ordinance authorizes the Income Tax authority to reopen the assessment which has been finalized earlier and thereupon finalize the assessment taking into the consideration the new facts. Abdul Kader Master Vs. Deputy Commissioner of Taxes & Ors 15 BLT (AD)271 ....View Full Judgment

Sections 154 (2) and 60

The Appellate Division found that the High Court Division observed that the questions raised were absolutely questions of fact which required to be proved with the help of evidence. The High Court Division came to a finding that both the appellate forum below had given concurrent findings in this matter and that it was not inclined to interfere with the forum created under section 160 of the Income Tax Ordinance, 1984. The High Court Division noted that even the very demand notice issued on 29.11.2006 clearly stood against the contention of the learned Advocate for the petitioner. Therefore, the High Court Division concluded that the question formulated in this reference was answered in the affirmative and in favour of the respondents and against the assessee-applicant-petitioner. Accordingly, this civil petition is dismissed. .....Dhaka Insurance Ltd =VS= Commissioner of Taxes, Dhaka, (Civil), 2016-[1 LM (AD) 182] ....View Full Judgment

Section 158(2)

The provision of sub­section (2) of section 158 of the Income Tax Ordinance as amended by the Finance Act, 2000 will be applicable to the pending cases. BRAC vs National Board of Revenue 14 BLC (AD) 113. ....View Full Judgment

Section 160

Read with The Income Tax Act, 1922, Section-23(3)
The appellant was assessed under Section 23(3) of the Income Tax Act, 1922 for the accounting year ended on 30 June, 1981 and the assessment year 1981-82. The Deputy Commissioner of Taxes, while making the said assessment treated a sum of Tk 8,15,79,411.00 as a windfall profit in the hands of the assessee appellant and added the same to its total income—Held: We are of the view that having regard to ‘the principles enunciated by the Judicial Committee in the case of Raja Bijoy Singh Dudhuria (supra) and the Indian Supreme Court in the case of CIT Vs Sitaldas Tirathdas (and followed by the Kerala High Court (supra) with which we are in agreement, there can be no hesitation in holding in the facts of the case before us that the price differential or the windfall profit having been credited in favour of the BPC under a Govt. decision before it became an income in the hands of the appellant, The principle of diversion of income by overriding title is fully attracted. The disputed amount never reached the appellant as its income. The obligation of the appellant was not to be discharged out of its own income but the amount was to be treated at its origin as income to the credit of the BPC. [Para-23] Meghna Petroleurm Ltd. Vs Commissioner of Taxes 6 BLT (AD)-95 ....View Full Judgment

Section 160

In taxation matter reference is to be made out of final decision/judgment passed by the Taxes Appellate Tribunal. Since in the instant case, the Appellate Tribunal rejected the appeal on the ground of limitation and the reference having not been made on point of limitation, the High Court Division rightly refused to answer the question raised. Mrs. Rani Bilkis Banu Chowdhury Vs. The Commissioner of Taxes 15 BLT (AD)84 ....View Full Judgment

Section 160, 160(4), 161 (2)

Section 160 of the Ordinance does not provide for any such action. Clearly it is for the assessee to formulate any point of law and make the reference to the High Court Division in the prescribed form. Under section 161 (2) the High Court Division is required only to hear and decide the question of law raised and, therafter, deliver its judgement stating the grounds on which the decision is founded. No question of law arose in the reference the respondents were not required to admit or deny the reference. ...M/S Ali Garments Limited =VS= Commissioner of Taxes, (Civil), 2020 [9 LM (AD) 293] ....View Full Judgment

Sections 160 and 161(2)

Section 160 of the Ordinance clearly provides that it is for the assessee to formulate any point of law and make the reference to the High Court Division in the prescribed form. Under section 161 (2) the High Court Division is required only to hear and decide the question of law raised and, therafter, deliver its judgement stating the grounds on which the decision is founded.
M/S Ali Garments Limited -Vs.- The Commissioner of Taxes 5 ALR (AD)2015(1) 17 ....View Full Judgment

Section 165 and 166

read with Emergency Power Rules, 2007 Rule-15
Held: we are of the view that failure to initiate proceeding for assessment or the pendency of the assessment proceeding cannot operate as a bar to the institution of any criminal prosecution for offences punishable under Chapter XXI of the Ordinance. Govt. of Bangladesh & Ors Vs. Iqbal Hasan Mahmood 16 BLT (AD) 313. ....View Full Judgment

Section 173

read with Section —3
Whether the Commissioner of Taxes being not a party before the Tribunal had locus Standi to file the application under section 173 of the Income Tax Ordinance
The Appellate Tribunal may amend any order passed by it to correct any error apparent from the record either of its own motion or the matter being brought to its notice by any other Income Tax Authority —Commissioner of Taxes is included as one of the income tax authorities and as such we are of the view that the matter has been brought to the notice of the Tribunal by an authorised authority and as such there is no error in this regard. Mr. Akbar Hussain Vs. Taxes Appellate Tribunal & Ors 15 BLT (AD)273 ....View Full Judgment

Section 184

The law regarding getting the necessary Income Tax Clearance Certificate was amended on 30.06.1992 by section 8(21) of the Finance Act, 1992 (Act No. 21 of 1992) when section 184 of the Income Tax Ordinance 1984 was abolished. From then on it was necessary only to pay 6 percent of the sale price at the time of registration. Even at this point the purchaser did not take any step towards completion of the contract. The liquidated damage is payable by the purchaser.
Mahua Khair -Vs- Amena Begum AliIspahani 1 ALR (AD)169 ....View Full Judgment

Sixth Schedule, Part A [Paragraph 1(1)]

Even the trust’s objects are cheritable, the presence of ancilliary or secondary object of non-cheritable nature does not prevent taxation – if among several objects of trust, the trust carries on trade or business, it can do so subject to the condition of relaxation with prior permission and not otherwise.
The Appellate Division held that essential conditions to create a cheritable trust are (a) a declaration which is binding on the settlor; (b) setting apart definite property and the settlor depriving himself of the awarship thereof; (c) statement of the objects for which the property is thereafter to be held i.e. beneficiaries. If a fund is collected for cheritable purposes found a portion thereof to contain real elements of trust present therein as management, its nature and utilization of the said amount will be entirely be taken within assessee’s volition and not be exempted from taxation. In the definition clause of ‘charitable purpose’ though the words ‘not involving the carrying on of any activity for profit’ have not been used in the manner the Indian definition has been used, a plain reading of this definition vis-a-vis the amendment made to paragraph 1(1) to the Sixth Schedule, Part A, the intention of the legislature is clear that the trust may carry on activity of profit for limited purpose, that is to say, any in-come derived from operation of micro credit by a trust which is registered with NGO Bureau and that if any income is not applied to cheritable purposes and is accumulated or set apart must be not exceeding ten years, and to be invested with intimation of the Deputy Commissioner of Taxes mentioning the purpose of accumulation in government or other security approved by the government or Post Office savings account.
Commissioner of Taxes -Vs.- Bangladesh Rural Advancement Committee (BRAC), 75, Mohakhali, Dhaka (Civil) 14 ALR (AD) 01-09 ....View Full Judgment