Act/Law wise: Judgment of Supreme Court of Bangladesh (AD)



Income Tax Ordinance, 1984
Section/Order/ Article/Rule/ Regulation Head Note Parties Name Reference/Citation
Sections 16 CCC, 16, 17, 20, 28(1), 29....

Income Tax Ordinance, 1984
Sections 16 CCC, 16, 17, 20, 28(1), 29, 35, 37, 38, 42, 83(2) & sec. 2 (34), (46), (65)
The Constitution of Bangladesh, 1972
Articles 26, 27, 31, 40 and 42 r/w
Companies Act, 1994
Finance Act
Section 16 CCC of the Ordinance, 1984 is enacted for betterment of the people of the country and to prevent tax evasion–– The legislature suddenly incorporated Section 16 CCC in the Ordinance, 1984 through the Finance Act, 2011, imposing liability of paying minimum tax @ 0.50% on gross receipts for every company irrespective of its profit or loss in an assessment year from all sources; Previously similar provision was also incorporated in the Ordinance, 1984 as Section 16 CC through the Finance Act, 2006 which was subsequently omitted by Finance Act, 2008; The provision of newly inserted Section 16 CCC being inconsistent and contrary to the provisions of Sections 16, 17, 20, 28(1), 29, 35, 37, 38, 42, 83(2) and definition clauses (34), (46), (65) of Section 2 of the Ordinance, 1984 as such is in conflict and contradictory with the aim, spirit, purposes, object and basic concept of the Ordinance, 1984; The fundamental rights of the petitioners guaranteed under Articles 26, 27, 31, 40 and 42 of the Constitution have been grossly violated and thus impugned Section 16 CCC of the Ordinance, 1984 is liable to be declared violative of the fundamental rights enshrined in the Constitution and also relevant provisions of the Ordinance, 1984.
The court must, therefore, act within their judicial permissible limitation to uphold the Rule of Law and harness their power in public interest and if the intent and general operation of the impugned tax legislation is to adjust the burden with a fair and reasonable degree of equality, Constitutional requirement is satisfied and in this regard a taxation law enacted by the Parliament in accordance with law is not amenable to judicial review. It has been consistently held by this Division that in matters of policy decision of the Government the court requires restraint. ––Appellate Division is of the view that impugned Section 16 CCC is enacted for betterment of the people of the country and to prevent tax evasion and the enactment is not arbitrary, unreasonable, unfair as well as not violative of any of the provisions of the Ordinance, 1984 or of the Constitution. .....S. Alam Beg Manufacturing Mills Ltd. =VS= Ministry of Finance, BD, (Civil), 2023(1) [14 LM (AD) 344] ....View Full Judgment

S. Alam Beg Manufacturing Mills Ltd. =VS= Ministry of Finance, BD 14 LM (AD) 344
Sections 16 CCC, 16, 17, 20, 28(1), 29....

Income Tax Ordinance, 1984
Sections 16 CCC, 16, 17, 20, 28(1), 29, 35, 37, 38, 42, 83(2) & sec. 2 (34), (46), (65)
The Constitution of Bangladesh, 1972
Articles 26, 27, 31, 40 and 42
Fiscal policy and in exercise of the power of judicial review, court do not ordinarily interfere with the policy decisions–– It is a settled principle of law that a very wide latitude is available to the legislature in the matter of formulation of tax law i.e. fiscal policy and in exercise of the power of judicial review, court do not ordinarily interfere with the policy decisions, unless such policy could be faulted on the ground of mala-fide, arbitrariness, unreasonableness, unfairness etc. .....S. Alam Beg Manufacturing Mills Ltd. =VS= Ministry of Finance, BD, (Civil), 2023(1) [14 LM (AD) 344] ....View Full Judgment

S. Alam Beg Manufacturing Mills Ltd. =VS= Ministry of Finance, BD 14 LM (AD) 344
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.

Islami Bank Bangladesh Ltd vs Commissioner of Taxes 14 BLC (AD) 145
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.

Islami Bank Bangladesh Ltd vs Commissioner of Taxes 14 BLC (AD) 145
Section 29(1)(XXVII)

Per MA Matin J : (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.

Islami Bank Bangladesh Ltd vs Commissioner of Taxes 14 BLC (AD) 145
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

Islami Bank Bangladesh Limited-Vs.- The Deputy Commissioner of Taxes and another 6 ALR (AD) 213
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

Commissioner of Taxes -Vs.- Bangladesh Rural Advancement Committee (BRAC), 75, Mohakhali, Dhaka 14 ALR (AD) 1
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

Commissioner of Taxes =VS= Conference & Exhibition Mgmt Ser. Ltd. 8 LM (AD) 34
Section 44(4)(b), 2(20)(a), 2(65), 16

Income Tax Ordinance, 1984
Section 44(4)(b), 2(20)(a), 2(65), 16
Income Tax Act, 1922
Section 60(1)-(a)(3)
Constitution of Bangladesh
Articles 15, 17, 83
Private Universities Act, 1992/ 2010
Societies Registration Act, 1860
Companies Act, 1994
Section 28
The Trust Act, 1882
Private university is a juristic person— The observation of the High Court Division that tax on private universities will increase the education cost of the students is not correct, since income tax is a direct tax payable only when a private university earns income; In case of loss no tax is payable. —However, the writ-petitioner-respondent private universities may not be required paying tax if it enjoys tax exemption under any lawful arrangement. .....Ministry of Finance, Bangladesh =VS= North South University, (Civil), 2024(1) [16 LM (AD) 63] ....View Full Judgment

Ministry of Finance, Bangladesh =VS= North South University 16 LM (AD) 63
Sections 44(4)(b), 160

Income Tax Ordinance, 1984
Sections 44(4)(b), 160
Income Tax Act, 1922
Section 60(1)
Societies Registration Act, 1860
Tax exemption— The appellant university of this Civil Appeal No.74 of 2007 challenged the decision of the High Court Division relating to the Assessment Year 2004-2005, when Clause 1(a)(3) of the said SRO dated 31.12.1980 (as amended by the SRO dated 03.07.2002) was in full force of law. The appellant university of the Civil Appeal No.74 of 2007 asserts that the university is entitled to tax exemption for the Assessment Year 2004-2005 under the prevailing law which is Clause 1(a)(3) of the said SRO dated 31.12.1980 (as amended by the SRO dated 03.07.2002).
Whereas the rest of the Civil Appeal Nos.111-155 of 2021 do not essentially involved whether the respective universities are entitled to exemption under the said Clause 1(a)(3) of the said SRO dated 31.12.1980 (as amended by the SRO dated 03.07.2002). In the Civil Appeal Nos.111-155 of 2021, the respective universities challenged the authority of the Government to revoke the said exemption under Clause 1(a)(3) of the said SRO dated 31.12.1980 (as amended by the SRO dated 03.07.2002). The said exemption under Clause 1(a)(3) of the said SRO dated 31.12.1980 (as amended by the SRO dated 03.07.2002) was revoked or rescinded or abolished by dint of the SRO No.156-Ain/Income Tax/2007 dated 28.06.2007 and the respective university also challenged the authority of the Government exempting the private universities from tax to the tune of 10% by way of reducing the liability to pay tax to the tune of 15% under the SRO No.158-Ain/Income Tax/2007 dated 28.06.2007. Moreover, the tax assessment years involved in the said Civil Appeal Nos.111-155 of 2021 are all related to tax assessment years when the said Clause 1(a)(3) of the said SRO dated 31.12.1980 (as amended by the SRO dated 03.07.2002) was not in force. Hence, the points of law as well as facts of instant Civil Appeal No.74 of 2007 are distinguishable and different from Civil Appeal Nos.111-155 of 2021. .....East West University, Dhaka =VS= The Commissioner of Taxes, (Civil), 2024(1) [16 LM (AD) 115] ....View Full Judgment

East West University, Dhaka =VS= The Commissioner of Taxes 16 LM (AD) 115
Section 46A(1), 46A(2)(f)

Tax Exemption– Gazette notification was not operated by giving retrospective effect – Section 46A(1) of the Ordinance provides that if any undertaking which comes under the ambit of industrial undertaking, tourist industry or physical infrastructure facility set up in Bangladesh between 01.07.1995–13.06.2000 shall be exempted from the tax payable under the Ordinance. It is admitted that unit No.2 of the writ petitioner company has commenced its commercial operation on 16.06.1997. An application for tax exemption was filed on 10.12.1997 before the said undertaking was included within the ambit of the physical infrastructure facility by gazette notification on 01.12.1999. Due to this, the application was rejected lawfully. Moreover, the oil tank of the writ petitioner company applied for tax exemption on 12.06.2000 after the gazette notification comes into operation. The application was not made within the stipulated time as provided in Section 46A(2)(f) of the Ordinance. Section 46A(2)(f) of the Ordinance implicates that the application for approval of tax exemption is to be made within 180 days from the date of commencement of commercial operation or production. From the materials on record, it appears that the gazette notification was not operated by giving retrospective effect. Therefore, the rejection of the application was correct and proper. The oil tank in question is not entitled to get tax exemption in accordance with law. The nature of oil tanker comes within the ambit of the physical infrastructure facility in 02.12.1999, but unit No.2 of the writ petitioner company started its commercial operation on 16.06.1997 and made application for tax exemption on 12.06.2000, which is not within the statutory period of 180 days from the date of its commencement. As the oil tank in question was not within the purview of physical infrastructure facility at the relevant time when they made the application for tax exemption on 04.02.1988, the rejection of that application was legal. ...Ministry of Finance, BD =VS= Summit United Tanks Terminal Ltd., (Civil), 2021(1) [10 LM (AD) 181] ....View Full Judgment

Ministry of Finance, Bangladesh =VS= Summit United Tanks Terminal Ltd. 10 LM (AD) 181
Section 46A(2)(f)

The Income Tax Ordinance, 1984
Section 46A(2)(f)
The Income Tax Rules, 1984
Rule 59A (2)
The finance Act, 1995
The gazette notification was not operated by giving retrospective effect as such applications seeking exemption by the company were rejected justly and correctly by the NBR– From the SRO 354 dated 02.12.1999 it appears that the gazette notification was not operated by giving retrospective effect as such applications seeking exemption by the petitioner company were rejected justly and correctly by the NBR inasmuch as the ‘container terminal’ of the petitioner company was not entitled to get tax exemption before publication of gazette notification dated 02.12.1999. As the ‘container terminal’ in question was not within the purview of physical infrastructure facility when the petitioner company filed application seeking tax exemption and thus the NBR justly and legally rejected the application for exemption and also correctly rejected the review application dated 31.01.2000 seeking review of earlier order dated 18.10.1999 since there left no scope to review of that application by the NBR. Appellate Division holds that the SRO No.354-Ain/99 dated 02.12.1999 having effect from the date of its publication left no scope to allow tax exemption to the ‘Unit-2’ of the respondent company and the NBR justly and legally rejected the applications filed by the respondent company. The appeal is allowed. .....Ministry of Finance, Bangladesh =VS= Ocean Containers Ltd, Dhaka, (Civil), 2022(1) [12 LM (AD) 97] ....View Full Judgment

Ministry of Finance, Bangladesh =VS= Ocean Containers Ltd., Dhaka 12 LM (AD) 97
Section 50

There is no any unlawful term or condition within a contract the same is binding upon the parties thereto–– Appellate Division finds from the agreement between BAPA and Biman that there are clear terms and conditions, which are in no way unlawful and, therefore, the contract is binding on the parties. Thus, Biman could not unilaterally alter or vary terms of the contract in view of Article 1.3.1. ––Payment of income-tax by the employer is a benefit given to the employees by agreement and can be said to be a perquisite and is sometimes termed as fringe benefit as in the case of for example newspaper employees. There is nothing illegal in employer/employees reaching an agreement to provide the employees his tax free salary so long as the agreement is at arms length and the terms and conditions are not unlawful. There is nothing to preclude the parties to the contract from revising the contract after due negotiation. However, so long as the earlier contract exists with the clause within it not to vary or alter the terms thereof, either party cannot unilaterally vary or alter the terms. ––This Division does not find any merit in the instant civil petitions for leave to appeal, which are accordingly dismissed. .....Bangladesh Biman Air-lines Limited =VS= Intekhab Hossain, (Civil), 2023(1) [14 LM (AD) 229] ....View Full Judgment

Bangladesh Biman Air-lines Limited =VS= Intekhab Hossain 14 LM (AD) 229
Section 52

Income Tax Ordinance, 1984
Section 52
Income Tax Rules, 1984
Rule 16
Bank guarantee— FDRs are equivalent to cash margin— Charging commission at the rate of 0.50% on the entire amount of bank guarantees— Bank guarantee means a comfort, which is being given by issuing bank, to a party (beneficiary in whose favour the guarantee is issued) of losses or damages if the client (on whose behalf the guarantee is being used) fails to complete or comfort to the terms of agreement. By issuing a bank guarantee, the issuing bank is assuring payment of the certain amount of money (as specified in the bank guarantee) to the beneficiary in case of non-performance of a certain contract according to the terms and conditions contained in the same. Issuance of bank guarantee is a secured transaction as the client needs to mortgage the properties or cash in the form of FDR for issuing of same. The bank will not give guarantee without securing itself. Again, when the borrower provides equal amount of bank guarantee in the form of fixed deposit/call deposit, it is known as 100% cash margin since the fixed deposit can be closed immediately and the default if any can be set right without any delay and the bank need not provide any fund based loan for this purpose and for this characteristics the FDR must be treated as equivalent to 100% cash margin.
It appears from the record that the entire twenty five bank guarantees have been secured by the lien of those FDRs. Though Circular No.1750 dated 23.05.1992, which re-affirmed the Circular No.1667 dated 04.12.1990, stated that Janata Bank can issue a bank guarantee on the basis of commission @ প্রতি তিনমাস অথবা উহার ভগ্নাংশের জন্য $ ০.৭৫% হারে। সর্বনিম্ন $ ২০০/-, ১০০% গ্যারান্টি মার্জিন প্রদান করিলে শুধুমাত্র সার্ভিস চার্জ $ ২০০/- আদায়যোগ্য but the rate of commission was reduced at 0.50% as incorporated in the sanction letter. In the instant case, since entire twenty five bank guarantees have been secured by the FDRs as such the bank guarantees are secured by 100% cash margin. Again, since the bank guarantees are secured by the lien of those FDRs which can be encashed at any time as such the FDRs are equivalent to cash margin. So, the Janata bank is entitled to get Tk.200/- as service charge as per the chart attached with the Circular No.1750 dated 23.05.1992.
Appellate Division is of the view that the letter issued by the writ respondent no.10 claiming deduction of commission @ 0.50% on the entire secured amount cannot be treated as lawful deduction as such the judgment and orders dated 09.02.2014 and 10.02.2014 passed by the High Court Division in Writ Petition No.4715 of 2013 do not calls for any interference by this Division. .....Janata Bank Limited =VS= Sampriti Chakma, (Civil), 2024(1) [16 LM (AD) 50] ....View Full Judgment

Janata Bank Limited =VS= Sampriti Chakma 16 LM (AD) 50
Sections 83A, 2(23), 78, 93, 128, 131, 153, 158

Self-assessment method as per Section 83A of the Ordinance, 1984–– The authority of Assistant Commissioner of Taxes in imposing penalty Appellate Division holds that the provision of Section 131 of the Ordinance, 1984 authorizes the Deputy Commissioner of Taxes to impose any penalty as per Section 128 and the definition clause of Section 2(23) of the Ordinance, 1984, provides that the Deputy Commissioner of Taxes also include Assistant Commissioner of Taxes. Thus, the authority of the Assistant Commissioner of Taxes in imposing penalty cannot be said without jurisdiction. ––That the income tax authority on the basis of the information filed by the assessees detected the concealment of revenues by the assessees-respondents and imposed penalty under Section 128 of the Ordinance, 1984, but the High Court Division disregarding the aforesaid aspects set aside the judgment and order of the Taxes Appellate Tribunal. ––Appellate Division finds that the High Court Division decided the Income Tax Reference Applications No.298-302 of 2010, 374-379 of 2010, 316-319 of 2010 and 172-175 of 2010 with wrong assessment, which is not tenable in the eye of law and accordingly, all the appeals deserve to be allowed. .....Commissioner of Taxes, Dhaka =VS= A.K.M. Faizur Rahman, (Civil), 2023(1) [14 LM (AD) 159] ....View Full Judgment

Commissioner of Taxes, Dhaka =VS= A.K.M. Faizur Rahman 14 LM (AD) 159
Section 83(2)

Further notice under section 83(2) of the Income Tax Ordinance, 1984 was amendment and since no such requirement– Appellate Division notes that in the above mentioned decision of the High Court Division their Lordships were considering income tax return of the company concerned for the assessment year 1998-1999. The learned Attorney General pointed out that the provision relating to service of further notice under section 83(2) of the Income Tax Ordinance, 1984 has been amended several times. Up to July 1991 there was no requirement for a further notice under section 83(2) of the Income Tax Ordinance, 1984. By an amendment in the year 1994 the provision of service of a further notice was introduced and that again was taken away by another amendment in July, 1999. Hence, the provision of service of a further notice under section 83(2) existed between August, 1995 to July, 1999. Accordingly, the case of Mark Builders Ltd. cited above was correctly decided requiring a further notice to be served under section 83(2) because the case in question referred to Income Tax assessment year 1998-1999. However, since the requirement of further notice under section 83(2) was amendment and since no such requirement existed in the law since July, 1999, the decision relied upon by the High Court Division is not applicable in the facts of the instant cases because the references before us relate to assessment years 2006-2007, 2007-2008, 2008-2009, 2001-2002 and 2004-2005, 2005-2006 in Civil Petitions for Leave to Appeal Nos.4407-4409 of 2018, 3122 and 3478 of 2018 respectively. ...Commissioner of Taxes, Dhaka=VS=Hotel Purbani International Ltd. , (Civil), 2021(2) [11 LM (AD) 78] ....View Full Judgment

Commissioner of Taxes, Dhaka=VS=Hotel Purbani International Ltd. 11 LM (AD) 78
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

AC of Taxes =VS= BM Baker Hossain 3 LM (AD) 22
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

AC of Taxes =VS= BM Baker Hossain 3 LM (AD) 22
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

Abdul Kader Master Vs. Deputy Commissioner of Taxes & Ors 15 BLT (AD) 271
Section 120, 163(3)(f) and (g)

Wherever income and expenditure of public money is involved, the CAG has power and authority to conduct audit to ascertain the propriety, legality and validity of it.–– In view of Appellate Division’s decision as referred to above and the provisions of section 163(3)(f) and (g) of the Income Tax Ordinance,1984, this Division is of the view that the High Court Division was not correct to hold that the proceedings as initiated vide impugned notice under section 120 of the Income Tax Ordinance, 1984 and actions taken pursuant to that notice suffer from lack of jurisdiction. .....Ministry of Finance, Bangladesh =VS= Radiant Pharmaceuticals Ltd., (Civil), 2022(2) [13 LM (AD) 259] ....View Full Judgment

Ministry of Finance, Bangladesh =VS= Radiant Pharmaceuticals Ltd. 13 LM (AD) 259
Section 120 and 163 (3)

Constitution of Bangladesh,
Article 128 and
Income Tax Ordinance, 1984
Section 120 and 163 (3)
Whether audit report has any bearing upon the subjective opinion of assessing officer:
The Audit Department has been invested with the authority to inspect the accounts of Revenue Department. The Comptroller and Auditor General is authorized to direct any of his officers to conduct audit of tax receipts or refunds under section 163 (3)(g) of the Income Tax Ordinance. The High Court Division has opined that the CAG has got no jurisdiction to check the merit or demerit of subjective opinions of the assessing officers with regard to allowing or disallowing a particular claim of the concerned assessee. This view of the High Court Division is erroneous inasmuch as if the audit report does not have any bearing in the subjective opinion of the assessing officer, the very purpose of auditing pursuant to article 128 of the constitution is to be frustrated. If no action can be taken against any irregularities detected through auditing of accounts, auditing itself becomes unnecessary. In the instant case, for example, concerned DCT has allowed financial expenses of an amount of Tk. 575,49,249/- as demanded by the assessee which was not supported by annual report etc. and the audit report has detected this irregularity. If this irregularity as detected by the audit report does not trigger any proceeding under section 120 of the Income Tax Ordinance, 1984, the power conferred to the CAG under section 163(3)(g) of the same Ordinance becomes fruitless. …Bangladesh and ors Vs. Radiant Pharmaceuticals Ltd., (Civil), 16 SCOB [2022] AD 1 ....View Full Judgment

Bangladesh and ors Vs. Radiant Pharmaceuticals Ltd 16 SCOB [2022] AD 1
Section 120 and 163 (3)

Audit report prepared by the Local Audit Office of the CAG is one of the factors that enables the Inspecting Joint Commissioner to determine whether any order of Deputy Commissioner of Taxes is erroneous or not: Going through the provision of section 120 of the Income Tax Ordinance, 1984 we find that the Inspecting Joint Commissioner may call for and examine the record of any proceeding under this Ordinance if he considers that any order passed therein by the Deputy Commissioner of Taxes is erroneous in so far as it is prejudicial to the interests of revenue. Provisions of section 120 of the Income Tax Ordinance, 1984 read with section 163(3)(f) and(g) of the same Ordinance lead us to irresistible conclusion that audit report prepared by the Local Audit Office of the CAG is one of the factors that enables the Inspecting Joint Commissioner to determine whether any order of Deputy Commissioner of Taxes is erroneous or not. The audit report better equips the Inspecting Joint Commissioner to apply his discretion to detect errors committed by Deputy Commissioner of Taxes. Therefore, the allegation that the auditors of the CAG have acted like supervisory officers of concerned assessing officer is devoid of any substance. …Bangladesh and ors Vs. Radiant Pharmaceuticals Ltd., (Civil), 16 SCOB [2022] AD 1 ....View Full Judgment

Bangladesh and ors Vs. Radiant Pharmaceuticals Ltd 16 SCOB [2022] AD 1
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

Dhaka Insurance Ltd =VS= Commissioner of Taxes, Dhaka 1 LM (AD) 182
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.

BRAC vs National Board of Revenue 14 BLC (AD) 113
Section 160

Gift Tax Act, 1990
Section 3, 4(1)(chha), (Ja) and 12 r/w
Trust Act, 1882
Section 3 r/w
Income Tax Ordinance, 1984
Section 160
Get the benefit of exemption of tax under section 4(1)(chha) and (Ja) of the Gift Tax Act, 1990 read with section 3 of the Trust Act, 1882–– On a plain reading of Section 4(1) (ja) of the Act, 1990 Appellate Division has found that that if the gift is made to the son, daughter, father, mother, husband, wife, full brother or full sister of the donor, then the said gift shall be exempt from the gift tax or be excluded from the ambit of gift tax chargeable under section 3 of the Gift Tax Act, 1990. ––This Division is of the view that the High Court Division rightly held that the assessing officer (Extra Assessment Commissioner of Taxes) and the appellate authorities below did not commit any illegality in imposing gift tax as contemplated under section 3 of the Gift Tax Act, 1990 and in rejecting the claim of exemption; because, in view of the provisions of the Gift Tax Act, 1990, the claim of exemption of the assessee-applicant does not have any legal basis. .....Dr. Muhammad Yunus =VS= Commissioner of Taxes, Dhaka, (Civil), 2023(2) [15 LM (AD) 154] ....View Full Judgment

Dr. Muhammad Yunus =VS= Commissioner of Taxes, Dhaka 15 LM (AD) 154
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

Meghna Petroleurm Ltd. Vs Commissioner of Taxes 6 BLT (AD) 95
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

Mrs. Rani Bilkis Banu Chowdhury Vs. The Commissioner of Taxes 15 BLT (AD) 84
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

M/S Ali Garments Limited =VS= Commissioner of Taxes 9 LM (AD) 293
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

M/S Ali Garments Limited -Vs.- The Commissioner of Taxes 5 ALR (AD) 17
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.

Govt. of Bangladesh & Ors Vs. Iqbal Hasan Mahmood 16 BLT (AD) 313
Sections 165 and 166

Anti-Corruption Commission Act, 2004
Sections 26 and 27(1)
The Income Tax Ordinance, 1984
Sections 165 and 166
The Code of Criminal Procedure
Sections 235(2)/236/403
The Anti-Corruption Commission of offence where the wealth of a person is found not in proportionate to his known sources of income. The intention of the legislature behind the enactment of ACC Act, 2004 is prevent corruption–– It has been held that the Income Tax Ordinance is purely a law relating to prevention of tax evasion and realization of income tax, which is completely distinct offence unlike the present one which relates to corruption. ––It is evident that the offences under Sections 26 and 27(1) of the ACC Act, 2004 and Sections 165 and 166 of the Income Tax Ordinance, 1984 are completely separate and distinct and one is not dependant on others. Therefore, the present case under Sections 26 and 27(1) of the ACC Act, 2004 shall proceed independently. Although the petitioner was earlier acquitted in a case under Sections 165 and 166 of the Income Tax Ordinance, 1984 it will not put any embargo on the trial of the present case. .....Mirza Abbas Uddin Ahmed =VS= The State, (Criminal), 2022(2) [13 LM (AD) 643] ....View Full Judgment

Mirza Abbas Uddin Ahmed =VS= The State 13 LM (AD) 643
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

Mr. Akbar Hussain Vs. Taxes Appellate Tribunal & Ors 15 BLT (AD) 273
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

Mahua Khair -Vs- Amena Begum AliIspahani 1 ALR (AD) 169
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

Commissioner of Taxes -Vs.- Bangladesh Rural Advancement Committee (BRAC), 75, Mohakhali, Dhaka 14 ALR (AD) 1