Court bars FBR from recovering ‘disputed tax liability’ from Shifa Tameer-e-Millat University

Shifa Tameer--e-Millat University

ISLAMABAD: The Islamabad High Court has barred the Federal Board of Revenue (FBR) to adopt coercive measures for the recovery of “disputed tax liability” from Shifa Tameer-e-Millat University.

IHC Chief Justice Aamer Farooq in its order dated January 23 granted stay and directed the FBR not to adopt coercive measures for recovery of disputed tax liability from Shifa Tameer-e-Millat University.

The Shifa Tameer-e-Millat University through its counsel had challenged the decision of proceedings under section 140 of the Income Tax Ordinance, 2001.

The counsel for the petitioner contended that estimate was filed by the petitioner, however, in response thereto, demand has been generated, which is not tenable in light of law settled by the court on May 5, 2016 in case titled `M/s Pak Telecom Employees Trust Vs Federation of Pakistan, etc.”

The counsel for the Shifa Tameer-e-Millat University submitted that the FBR has issued notice under section 147 of Income Tax Ordinance, 2001 (Ordinance, 2001) for payment of advance tax of Rs27.8 million pertaining to the second quarter of tax year 2024.

They claimed that Shifa Tameer-e-Millat University is a non-profit entity and had an exemption certificate issued under section 2(36) of Ordinance, 2001 of the FBR till the tax year 2019.

The entity applied for the exemption certificate for the tax year 2024 which was rejected by the FBR on December 14, 2023 due to non-availability of the PCP report against which petitioner would have filed an appeal before chief commissioner.

The counsel submitted that the petitioner is not undertaking any commercial or profit making activities and is purely involved in charitable activities for poor and needy people and its income is not subject to taxation and the petitioner is entitled to 100% tax credit under section 100/C of Ordinance, 2001.

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