KARACHI: Pakistan Tax Bar Association (PTBA) has requested the Chairman Appellate Tribunal (Inland Revenue) to form a larger bench in view of conflicting judgments passed by Appellate Tribunal in respect of rental income.
Pakistan Tax Bar Association are writing you this letter with a lot of distress in respect of the conflicting Orders of the Divisional Benches of the Appellate Tribunal, Inland Revenue on a similar issue/controversy, which is regarding the taxability of the income of the Pakistani tax residents from UAE, a letter addressed to Chairman ATIR said.
It said that Divisional Bench at Lahore Registry decided a Case No. ITA 4299/LB/2022 in respect of Tax Year 2022 vide its Order dated 08.09.2022, annulled the order of the taxation officer and held that the rental income and capital gain from the properties located in UAE are not taxable in Pakistan. On the contrary, the Divisional Bench at Islamabad Registry, decided a Case No. ITA 1524/IB/2021 for the tax year 2017 vide its Order dated 07.11.2022, has held that rental income and capital in respect of properties located in the UAE are taxable in Pakistan.
Now, the Divisional Bench at Lahore Registry has once again decided a case vide its Order No. ITA No. 2460/LB/2024 dated 23-10-2024 has once again held that the rental income and capital gain from the properties located in UAE and UK are not taxable in Pakistan, the PTBA letter points out.
The above inconsistencies has meant that there is no certainty around the taxability of rental income and capital gain for properties located in Pakistan. Therefore, we are writing to you with the request to constitute a larger bench, pursuant to the powers vested in you under Rule 3(2) of the Appellate Tribunal Inland Revenue (Functions) Rules, 2023, as the larger bench of this Learned Tribunal has already held that in case of conflicting decision by the benches of equal strength which is bound to create complications, confusion and ciaos which will result in uncertainty and would be ultimately disastrous to the administration of justice reported as [(1997) 75 TAX 108 (Trib,)]. Therefore, we would request to treat the instant matter as an “exceptional circumstance” which requires the formation of a larger bench, it added seeking indulgence by Chairman ATIR to constitute a larger bench will help create certainty and clarity for taxpayers going forward.