1. ' SALEEM AKHTAR, J.--The respondent is one of the Directors of Kohinoor Group of Companies.
2. During the assessm ent year 1969-70 he derived income inter-alia from dividend earned on shares of a company whose income was exempt under section (15BB) of Income Tax Act till the assessm ent year 1970-71. The Income-tax Officer, however, added the dividend income of Rs,60,122 to his total income. The respondent challenged this order before the Appellate Assistant Commissioner who allowed exemption from tax on the said dividend income. The department then filed appeal and the Tribunal maintained that order. After the decision of the Tribunal the provisions of section 15-BB were amended and a new subsection (4-AA) was added to that section which provide as follows:- "Nothing contained in this section shall be deemed to exempt from tax any dividend paid, credited or distributed or deemed to have been paid, credited or disbursed by a company to its share- holders out of the profits or gains exempt from tax under this section."
3. ' The Income-tax Officer then issued a notice under section 34 of the Income-tax Act, but he did not comply with that notice. The Income-tax Officer then issued notice under section 22, subsection (4) of Income-tax Act whereupon the respondent appeared and objected to the reopening of the case inter alia on the plea that it was barred by time. The Income-tax Officer did not accept this contention and reframed the assessment including the dividend income derived from company enjoying tax-holiday, as well. Appeal filed by the respondent was dismissed by the Appellate Assistant Commissioner but the appeal filed before the Tribunal was allowed. The department then filed application under section 66 (1) of the Income-tax Act. The Tribunal has referred the following question:- "Whether in the facts and circumstances of the case, the Income-tax Officer acted within jurisdiction in re-opening the assessment under section 34 of the Income-tax Act, in respect of assessm ent year 1969-70 for subjecting to tax the dividend income from 'tax-holiday company which had already been held to be exempt from tax by this Appellate Tribunal prior to the introduction of the subsection (4-AA) of section 15-BB with retrospective effect?"
4. We have heard the learned counsel for the parties. The respondent has referred to Commissioner of Income-tax (East) Karachi v. Ebrahim D.Ahmed 1982 PTD 130. The learned counsel for the parties have raised same arguments which were pressed in the referred case. We have gone through the exhaustive judgment in which it has been held that operation of subsection (4-AA) of section 15-BB of the Income-tax Act could not go beyond 20th Dec., 1971. We respectfully follow the observations made in this judgment and hold that the present case relates to assessment year 1969-70 and will not fall within the operation of subsection (4-AA) of section 15-BB.
5. ' We therefore, answer the question in the negative.