2013/2015 Suit M/s. A.F Ferguson & Co., & Others. (Plaintiff) V/S Pakistan & Others. (Defendant)

2013/2015 Suit M/s. A.F Ferguson & Co., & Others. (Plaintiff) V/S Pakistan & Others. (Defendant) Sindh High Court

Bench: Hon'ble Chief Justice Mr. Justice Muhammad Junaid Ghaffar(Author) Order Date: 09-AUG-19

In all these Suits the claim of the Plaintiffs was to the effect that in terms of Section 92 of the Income Tax Ordinance, 2001 there is no compulsion or restriction that it is only the firm which can file its return and pay taxes on the income, as at the same time, the partners of the firm are also qualified to file their return and pay the tax accordingly and in that situation the firm would not be liable to pay any tax on the income on which the partners have already paid the tax. According to the Plaintiffs, Section 92 does not prohibit the partners from paying tax on their income as against the same by the firm. Their further case was that the inverse of what is provided in Section 92 is permitted as not being prohibited or restricted; however, the contention of the Plaintiffs is held to be misconceived as this would defeat the intention of the legislature and would rather amount to do legislation in favour of the Plaintiffs. The law as it stands today provides a clear mechanism and the principle of taxation which has to be applied on the firm, whereas, nothing could be read into the said provision . It is settled law that the function of the Courts is only to expound and not to the legislate. In view of such position, all Suits have been dismissed by holding that the firm i.e. the Plaintiff No. 1 in all these Suits was required to file its return and pay the tax accordingly; and not the partners individually in respect of the income received from the association of persons or the firm; and once the tax is paid by the firm, then the partners are not required to pay any tax on such income.