ISLAMABAD: The Islamabad High Court (IHC) has directed the Federal Board of Revenue (FBR) not to adopt coercive measures for recovery of disputed tax liability against Shifa Tameer-e-Millat University.

The IHC chief justice in his latest order granted stay and directed the FBR not to adopt coercive measures for recovery of disputed tax liability against the said 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.

The counsel of Shifa Tameer-e-Millat University in its petition submitted that the 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 organisation and had an exemption certificate issued u/s 2(36) of Ordinance, 2001 till the tax year 2019.

The organisation 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 non-availability of PCP report against which the petitioner will file an appeal before the chief commissioner.

They submitted before the court that the 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 per cent tax credit u/s 100C of Ordinance, 2001.

Copyright Business Recorder, 2024