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Income‑tax Case No. 36 of 1974, decided on 8th November, 1983.

‑‑ Ss. 10(2) & 222(3)‑‑Rebate‑‑Assessee not declaring dividends at time of filing of return Assessee declaring dividends before assessment could; be finalized by filing revised return and claiming rebate on account of dividends declared‑Income‑tax Officer not allowing claim of rebate on account of dividend, as there was no omission or wrong statement in original return and dividend declared much after filing of return‑‑Held, as assessment had not been finalized and claim for rebate made in revised return, assessee was entitled to rebate.

Nasrullah Awan for Applicant.

A. A. Shareef for Respondent.

Date of hearing : 8^th November, 1983.

‑‑ This application under section 66(l) of the Income‑tax Act, 1922 relates to assessment tear 1;967‑68 of the assessee/respon dent. For the year in question the original return was filed by the assessee on 30‑9.1967, which was later revised on 11‑10‑1967. This revised return was filed after adjusting profit under section 10(2)(vii) of the income‑tax Act. On 26‑9‑1968 a second revised return was filed in which the assessee inter alia claimed rebate in super‑tax at the rate of 15 per cent on distribution of dividend. The dividend was declared late in June, 1968. According to the Income‑tax Officer this rebate could not be entertained if it was made by the due date for the filing of return, by which date the contents are completed and final liability is determined. The Income‑tax Officer was further of the view that under section 22(3) of the Income‑tax Act a revised return could only be made if there was some omission or wrong in the original return and as there was no omission or wrong statement in the original return and the dividend was declared much after the filing of return, the assessee could not claim rebate by filing the revised return. The claim of rebate on account of the dividend was disallowed. The assessee filed an appeal before the Income‑tax Appellate Tribunal, Karachi Bench, Karachi. By the order of Income‑tax Appellate Tribunal dated 23‑8‑1978 the claim of rebate of 15 per cent on dividend made by the assessee was allowed. The Commissioner of income‑tax has filed this application seeking the decision on the following question:

"Whether on the facts and in the circumstances of the case, the Tribunal was justified in directing the Income‑tax Officer to allow the super‑tax of 15 per cent. admissible on distributed profits on account of dividends declared in subsequent accounting year "

We have heard Mr. Nasrullah Awan, learned counsel for the Income‑tax Commissioner and Mr. A. A. Sharif, learned counsel for the assessee.

2. In this case at the time the original return was filed, the dividends for the year in question had not been declared. However, before the assessment could be finalized by the Income‑tax Officer, the dividends were declared out of the profits of the relevant accounting year and as such the revised return was filed claiming rebate on account of the dividends declared. In Part II of the V Schedule of the Finance Act, 1967 it is provided that in the case of a company a rebate of 15 per cent shall be allowed on so much income of a company for the relevant year as has been distributed as dividends to the share‑holders. Learned counsel for the Commissioner of Income‑taxi Officer has not challenged the factual position that in this case the dividends had been declared out of the profits of the assessee for the accounting year in question. Under the law, therefore, the assessee was entitled to the rebate and as the assessment had not been finalized and the claim for rebate was made in a revised return, the Income‑tax Appellate Tribunal rightly decided that the assessee was entitled to the rebate.

3. In the circumstances, the question referred to in this application is decided in the affirmative.

There will be no order as to costs

M. A. K. Question decided in affirmative.

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