NASIR ASLAM ZAHID, J.--1. This judgment will dispose of Income Tax Cases Nos. 68/71, 69/71, 782/72 and 162/74. In all these four cases, the applicant is Haji Ibrahim Ishaq and the respondent is the Commissioner of Income Tax and identical questions are before us for our opinion and which are as follows:-- "(1) Whether in the facts and circumstances of the case the Tribunal is right in holding that the applicant assessee is not entitled to claim immunity from income-tax in respect of income arising and accruing in Swat State under Articles 223 and 242 of the Constitution of the Islamic Republic of Pakistan, 1962?
(2) Whether in the facts and circumstances of the case the Tribunal is right in holding that as the residential status of the applicant had to be determined for assessing property income, the same status has to be assigned for the purpose of subjecting the income arising in Swat State?
(3) Whether in the facts and circumstances of the case the Tribunal is right in holding that as Swat State is a part of Pakistan and sub-section (2) of Section 1 of the Income Tax Act, 1922 extends to the whole of Pakistan, residence in Swat State would mean residence in Pakistan?
(4) Whether in the facts, and circumstances of the case the Tribunal is right in holding that the applicant-assessee was "resident and ordinary resident" in Pakistan within the meaning of those phrases in Sections 4-A(a) (ii), 4-A(iii) and 4-B of Income Tax Act, 1922?
(5) Whether in the facts and circumstances of the case the Tribunal is right in holding that the applicant was maintaining a dwelling house in Pakistan because his wife has a house in Karachi wherein a telephone in the name of the assessee is installed?
(6) Whether in the facts and circumstances of the case the Tribunal is right in holding that the Income Tax Officer has categorically stated that the applicant was carrying on business of selling emerald in Pakistan at places like Rawalpindi etc.?
(7) Whether in the facts and circumstances of the case the Tribunal is right in holding that sales of emerald were made in Pakistan and whether this finding is based on any evidence or material on record?
(8) Whether in the facts and circumstances of the case the Tribunal is right in placing onus on the applicant to prove that the emerald extracted from mines in Swat State were not sold in Pakistan?
(9) Whether in the facts and circumstances of the case the Tribunal is right in holding that even if the applicant be taken to be non-resident he would be still liable to tax in Pakistan.
2. The main question which arises in these cases is regarding the effect of Articles 223 and 242 of the 1962 (Pakistan) Constitution on the applicability to Swat of the Income-tax Act, 1922. Section 1(2) of the Income-tax Act, prescribes that the Act extends to whole of Pakistan, and although no one can argue that Swat was or is not a part of Pakistan. Mr. Ali Athar contended that Income Tax Act did not apply to Swat and he referred to Article 223 of the 1962 Constitution which is as follows:- "223.-(1) Notwithstanding anything in this Constitution, no Central Law or Provincial Law shall apply to a Tribal Area or to any part of a Tribal Area unless the Governor of the Province in which the Tribal Area is situated, with the previous approval of the President, so directs, and in giving such a direction with respect to any law, the Governor, may direct that the law shall, in its application to a Tribal Area or to any specified part of Tribal Area, have effect subject to such exceptions and modification as may be specified in the direction.
(2) The Governor of a Province may, with the previous approval of the President, make regulations for a Tribal Area or any part of an area situated in the Province, and any regulation so made may repeal or amend any Central Law or Provincial Law or any other law in force in the area.
(3) The President may, at any time, by Order, direct that the whole or any part of a Tribal Area shall cease to be a Tribal Area, and any such Order may contain such incidental and consequential provisions as may appear to the President to be necessary and proper, but before making any Order under this clause, the President shall ascertain, in such manner as he may consider appropriate, the views of the people of the area concerned.
(4) This Article shall not be construed as limiting in any way the executive authority of the Republic or of a Province in relation to a Tribal Area."
According to the above Article of the 1962 Constitution, no central law was to apply to any tribal area unless the Governor of the Province in which the tribal area was situated, with the previous approval of the President, so directed. Then a reference was made by Mr. Ali Athar to the definition of "tribal area" in Article 242 of the said Constitution, which included the State of Swat. Learned counsel had contended that in the face of these provisions, for the assessment years in question, Income-tax Act was not applicable to Swat as there was no direction of the Governor as contemplated in Article 223 for application of the Income-tax Act to Swat. This point had arisen on the date of hearing fixed on 7th December, 1981, when learned counsel for the Commissioner of Income-tax taken time to obtain instructions and the cases were then adjourned to 10th December, 1981, when arguments of both learned counsel were heard. Mr. Nasrullah Awan, learned counsel for the Commissioner informed us that there was no direction issued by the Governor as contemplated by Article 223 till the period covered by the assessment years in question expired. It may be mentioned here that I.T.C. 68/71 relates to assessment year 1962-63, I.T.C. 69/71 to 1963/64, I.T.C. 782/72 to 1966-67 and I.T.C. 166/74 to 1967-68. In the circumstances we are of the view that Income-tax Act, 1922 was not applicable to Swat for the assessment years in question.
3. The second main point which arises in these cases is that if the Income-tax Act was not applicable to Swat for the period in question, whether income accruing from any source in Swat was liable to tax under the Income-tax Act irrespective of the fact whether the assessee was a resident of a place in Pakistan but outside Swat. The contention of Mr. Ali Athar was that as during the period in question Income-tax Act was not applicable to Swat, an assessee, who might be resident in Karachi or any other place in Pakistan outside Swat, would be taxable in respect of income occurring to him in Pakistan outside Swat, but income accruing to such assessee from any source in Swat would be totally exempt from tax under the Income-tax Act. We are not inclined to agree with this contention of learned counsel as we are of the view that an assessee, who was ordinarily resident in a place in Pakistan but outside Swat, would be subject to tax not only in respect of income accruing to him in Pakistan outside Swat but also income accruing to him from sources in Swat. Such an assessee being a resident of an area, to which the Income-tax Act applied would be subject to tax under the Income-tax Act and his income from Swat would also be taxable. However, if the assessee was not ordinarily resident of any area in Pakistan to which Income-tax Act applied, any income accruing to him from sources in Swat would not be taxable as the Income-tax Act at that time was not applicable to Swat. In this connection reference may be made to Section 4(1) of the Income-tax Act whereunder the total income of a person ordinarily resident of a place in Pakistan to which the Income-tax Act applies includes not only income accruing to him in Pakistan but also in respect of income accruing to him from outside Pakistan. In the instant case, if instead of the income accruing from Swat, the assessee had derived income from sources outside Pakistan, for instance from Dubai or U.K., the assessee, if ordinarily resident of Pakistan, would have been taxed in respect of such income derived by him from sources in Dubai or U.K. In such a case, it would not have been open to the assessee to argue that as income tax law is not applicable to Dubai or U.K., and admittedly the Pakistan Income-tax law is not applicable to such countries, income accruing from sources in Dubai or U.K. Would not be liable to tax.
4. The other question that arises for our consideration in the present References is whether the assessee was a resident or ordinarily resident in Pakistan. The relevant provisions in the Income-tax Act in this regard are Sections 4-A and 4-B which are reproduced here:~ "4-A. For the purposes of this Act-
(a) any individual is resident in Pakistan in the year if he-
(i) is in Pakistan in that year for a period amounting in all to one hundred and eighty-two days or more; or
(ii) maintains or has maintained for him a dwelling place in Pakistan for a period or periods amounting in all to one hundred and eighty-two days or more in that year, and is in Pakistan for any time in that year; or
(iii) having within the four years preceding that year been in Pakistan for a period of or for periods amounting in all to three hundred and sixty five days or more, is in Pakistan for any time in that year otherwise than on an occasional or casual visit;
(b) a Hindu undivided family, firm or other association of persons is resident in Pakistan unless the control and Management of its affairs is situated wholly without Pakistan; and
(c) a Company is resident in Pakistan in any year if (i) it is a company registered under the Companies Act, 1913 or formed under a Central Act having in each case its registered Office in Pakistan or (ii) the control or management of its affairs is situated wholly in Pakistan in that year.
4-B. For the purposes of this Act--
(a) all individual is "not ordinarily resident" in Pakistan in any year if he has not been resident in Pakistan in nine out of the ten years preceding that year or if he has not during the seven years preceding that year been in Pakistan for a period of, or for periods amounting in all to, more than two years;
(b) a Hindu undivided family is deemed to be ordinarily resident in Pakistan if its manager is ordinarily resident in Pakistan;
(c) a Company, firm or other association of persons is ordinarily resident in Pakistan if it is resident in Pakistan".
The finding of the Income Tax Tribunal as regards the resident status of the assessee is as follows: "The appellant could not deny that at least the wife of the assessee maintains a dwelling house where a telephone is installed in the name of the appellant. This fact by itself shows that a part of the wife's residence is reserved as a dwelling place for the assessee appellant. Since this definitely gives him right to live in Pakistan and, therefore, within the meaning of Section 4-A (a)(ii) a residence is maintained for him in Pakistan for more than 180 days, he becomes a resident of Pakistan and as his residence for the 9 years out of the 10 previous years is not denied, he automatically becomes resident and ordinarily resident of Pakistan. We would hold that the assessee was liable to tax for all his income in and outside Pakistan."
The above facts mentioned in the order of the Income Tax Appellate Tribunal are admitted and, therefore, we see no reason to take the view that the assessee was not resident or ordinarily resident in Pakistan.
5. In view of the above discussion we answer the 9 questions which arise out of these References as follows:--
(i) Question No. 1 is answered in the affirmative as we are of the opinion that in the facts and circumstances of the case, where the assessee was ordinarily resident of Karachi, the Tribunal was right in holding that the assessee was not entitled to claim immunity from income-tax in respect of the income arising and accruing to him in Swat;
(ii) Question No. 2 is also answered in the affirmative as the Tribunal had come to the correct conclusion that the assessee was ordinarily resident of Karachi;
(iii) Question No. 3 is answered in the negative. We are of the view that as at the time in question Income Tax Act was not applicable to Swat, residence in Swat State could not -mean residence in Pakistan within the meaning of the provisions of the Income Tax Act;
(iv) In view of our observations in this judgment. Question No. 4 is answered in the affirmative. The Tribunal was right in holding that the assessee was resident and ordinarily resident in Pakistan within the meaning of Sections 4-A (a)(ii), 4-A (iii) and 4-B of the Income Tax Act;
(v) Question No. 5 is also answered in the affirmative as in the facts and circumstances of the case the Tribunal was right in holding that the assessee was maintaining a dwelling place in Pakistan as his wife had a house in Karachi where a telephone in the name of the assessee was installed;
(vi) Question No. 6 is answered in the negative as in the assessment orders of the assessment years in question the Income Tax Officer has not stated that the assessee was carrying on business of selling emerald in Pakistan at places like Rawalpindi etc.;
(vii) Question No. 7 is also answered in the negative as there was no evidence before the Income Tax authorities for the assessm ent years in question that sales of emerald were made in Pakistan outside Swat.
(viii) Question No. 8 answered in the negative. The Tribunal was not right in placing the onus on the assessee to prove that the emeralds extracted from mines in Swat State were not sold in Pakistan,
(ix) Question No. 9 is answered in the negative. The Tribunal was not right in holding that even if the assessee was a non-resident he would still be liable to tax in Pakistan. According to our view, for the assessm ent years in question when Income Tax Act was not applicable to Swat, a person, who was not resident or ordinarily resident of any place to which the Income Tax applied, would not be liable to tax in respect of income accruing to him in a place where the Income Tax Act, did not apply.
There will be no orders as to costs.