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SHC bars tax dept from taking action against M/s KAL Aviation (FZE)

SHC bars tax dept from taking action against M/s KAL Aviation (FZE)

KARACHI: The Sindh High Court (SHC) has restrained the tax department from taking any coercive action against the petitioner till next date of hearing on a constitutional petition filed by M/s KAL Aviation (FZE), seeking tax exemptions in view of a treaty between Pakistan and UAE.

During the hearing of the petition, a two-member bench headed by Justice Munib Akhtar also issued notices to the tax department and the deputy attorney general, directing them to file their respective para wise comments on the next date of hearing.

Earlier, counsel for the petitioner stated that he is a non-resident entity earning income by way of leasing aircraft to resident entities in Pakistan. However, tax authorities have issued notices to the petitioner for recovery of disputed amount for tax year 2011, 2012, 2013 and 2015 without considering facts.

He further submitted that income of the petitioner earned by way of aircraft lease charges are exempt in view of article 8 of the tax treaty executed between Pakistan and UAE, for avoidance of double taxation.

Citing Chairman Federal Board of Revenue, Commissioner Inland Revenue, Appeals-III, Audit Range-B, Zone-IV, Corporate Regional Tax Office, Additional Commissioner Inland Revenue, Appeals-III, Audit Range-B, Zone-IV, Corporate Regional Tax Office as respondents, petitioner pleaded the court may restrain them from taking any coercive measures till final order of this petition.