1. ' SALEEM AKHTAR, J.--For the assessment year 1967-68 and 1968-69 the respondents declared a consolidated amount as excess income under M.L.R. 32 of1969. They claimed rebate as provided by Section 5 of the Finance Act, 1968 which was refused by the Income Tax Officer on the ground that the export rebate could be allowed on the tax levied on income from the export but the respondents' income could not be co-related to that source. It was further observed that the notification issued by the Central Board of Revenue in pursuance of M.L.R. 32 of 1969 prohibited "allowance of any deduction or exemption in respect of the excess income declared by an assessee". In appeal the Appellate Assistant Commissioners maintained the assessment order. The respondents challenged the order before the Appellate Tribunal where relief was granted. The Department then filed application under section 66 (1) of the Income Tax Act and the following question has been referred by the Tribunal:- "Whether on the facts and in the circumstances of the cases, the Income-tax Appellate Tribunal was justified in directing to allow Export Rebate on the Excess Income under M L R 32 ' Mr. Nasarullah Awan has contended that as M.L.R. 32 does not permit any reduction, the respondents are not entitled to claim rebate. Mr. Iqbal Naeem Pasha has contended that the prohibition under M.L.R. 32 is in respect of rebates, deductions and exemption which are admissible under the Income Tax Act.
2. There is no dispute that the assessment relates to the excess income declared under M.L.R. 32, which prescribes a procedure for assessment. Where a consolidated declaration has been made by the assessee the total amount shall be divided by the number of years and the assessment for the relevant year shall be made on the average annual income to be determined by the Assessing Officer. Para. 3 (ii) of M.L.R. 32 reads as follows:- "3(ii) Where a consolidated statement of income has been filed, such solidated income shall be divided by the number of years to which it pertains subject to a maximum of nine years. The assessm ent, or reassessm ent as the case may be, shall be made for the relevant assessment years on the average annual income so determined, in accordance with sub paragraph (i) above, No allowance shall, however, be made for any rebate, deduction or exemption admissible under the Income-tax Act, 1922, in respect of such income, which shall be treated as -taxable income".
3. ' The respondent has claimed reduction in the Income Tax & Super Tax in terms of Section 9 (5) of the Finance Act.
4. 1968.
5. The word "rebate' has not been defined either in M.L.R. 32 or in the Income Tax Act. However, according to Chamber's 20th Century Dictionary it means "to reduce, to abate, to dull, to blunt, to repay a part of, discount, repayment or draw-back" Therefore by giving rebate a concession is granted to the assessee. Section 9 subsection (5) of the Finance Act provides that if the given conditions are satisfied then any profit or gain derived from the export of goods out of Pakistan, the tax including super-tax payable by him in respect of such profits and gains shall be reduced by an amount specified therein. Rebate is thus claimed under the provisions of Finance Act, 1968 which is independent of any provision of the Income Tax Act. The prohibition under M.L.R. 32 is in respect of such rebate, deduction or exemption which are admissible under the Income Tax Act 1922. In the present case the source of Income, has not been disputed or challenged any-where on record. The rebate is obviously in respect of the declared income, arising from export and has not been claimed under the Income Tax Act. Therefore the prohibition under M.L.R. 32 will not apply.
6. A reference has been made to paragraph 6 (bb) of Circular No, M.L.R 32 of 1969 in which provides that the assessee will not be granted allowance of any deduction or exemption. It has been contended that as it does not speak of rebate it cannot be allowed. The Rules framed under M.L.R.
7. 32 cannot override the provision of M.L.R.
32. The provisions of M.L.R. 32 are clear inasmuch as they prohibit grant of such rebate, allowance or exemption which are admissible under the Income Tax Act. The rebate claimed by the respondents does not fall in that category and therefore, they are entitled to the rebate under the Finance Act 1968. We answer the Question in the affirmative.