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Civil Petition for Special Leave to Appeal No. 560 to 570 of 1975, decided on 25th February, 1981.

(On appeal from the judgment and order of the Lahore High Court dated 22nd April, 1975, in T. Rs. Nos. 170 to 175 and T. Rs. Nos. 179 to 183 of 1973).

‑‑‑ S. 10(2) (xvi) read with Constitution of Pakistan (1973), Art. 185(3) Leave to appeal‑Question whether petitioner's claim falls under S. 10(2) (xvi) of Act as claimed, or hit by provisions of S. 10(2) (xvi), held, requires further examination‑Leave to appeal granted.‑[Leave to appeal].

S. M. Zafar, Senior Advocate and Y. H. Zaidi, Advocate‑on‑Record for Petitioner (in all cases).

Nemo for Respondent (in all cases).

Date of hearing : 25th February, 1981.

Heard learned counsel. The restoration applications are allowed.

The common question in these petitions is whether the petitioner's case falls under section 10 (2) (xvi) of the Income‑tax Act, 1922. And, for the purpose of these petitions it is sufficient to state that the petitioner has been running a school and subsidizing two other schools for the benefit of the children of its employees. We were also informed that this was in order to meet a demand of the employees, who had threatened to raise an industrial dispute. In this background, the petitioner claimed the right for the assessment years 1955‑56 to 1965‑66 to set off the expenses thus incurred on its three schools against the income for the aforesaid years under section 10 (2) (xvi) of the Income‑tax Act. The Income‑tax Officer rejected this claim on the ground that the expenses could not be allowed; because they fell under section 10 (2) (xvi) (al. The petitioner challenged these orders before the income‑tax Appellate Tribunal, which accepted its contention. Therefore, the Department referred the ques tion to the Lahore High Court and a Division Bench of the Lahore High Court after examining the case‑law carefully (we say so with respect) held that the petitioner was not entitled to the benefit of section 10 (2) (xvi) of the Income‑tax Act.

Mr. Zafar challenged the validity of this view and the question whether the petitioner's claim falls under section 10 (2) (xvi), as claimed by it, or is hit by the provisions of section 10 (2) (xvi) (a), as held by the learned Judges, requires further examination. Accordingly, we grant leave.

The appeals arising out of these petitions will be heard together and will be made ready on the present record with liberty to the parties to file additional documents, if any. A sum of Rs. 5,000 should be deposited as security for all the petitions.

Leave granted.

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