M. MAHBOOB AHMAD, C J.-- This Reference has been made by the Income Tax Appellate Tribunal, Lahore to answer the following three questions:- ((I)) "Whether dividend received by the applicant from the Company enjoyed Tax Holiday under Section 15 BB is liable to be taxed in the hands of the applicant ?
(ii) "Whether sub-section (4AA) added by Finance Ordinance, 1972 is ultravires and whether said income which was exempt when received by the assessee could be retrospectively made taxable?"
(iii) "Whether additional tax could be lawfully levied under Section 45A and whether there is any section for this levy under the Charging Section of the Act namely sections 3 and 55 of the Act and whether the order imposing additional tax is not appealable ?"
The first two questions stand conclusively decided by the Supreme Court of Pakistan in cases reported as Commissioner of Income Tax and others v Mst. Surriya Forooq and others (1987 SCMR 1297) and Commissioner of Income Tax (East), Karachi v. Ebrahim D. Ahmad (1982) 45 Tax 282 (H.C.Kar.) = (PLD 1982 Karachi 470).
2. As regards the first question, it has been held that the dividend received by the assessee from the profit of a Company which enjoyed exemption of tax under Section 15BB is not liable to be taxed in the hands of the assessee/shareholder as well.
3. The second question has also been adequately dealt with in the judgment of the Karachi High Court cited above to which we have respectfully agreed in Tax Reference No. 305/1972 and accordingly the answer to question No. 2 would be that sub-section (4AA) added by virtue of Finance Ordinance, 1972 would not operate retrospectively.
4. Adverting now to the 3rd question, we may refer to M. Shakeel Saigol v. Income Tax Officer (Companies) etc. Reported as (1976) 33 Tax 237 (H.C. Lah.) = (PLD 1976 Lahore 616) wherein Section 45A of Income Tax Act 1922 was held to be not suffering with any infirmity. Nothing has been urged before us to show that the view as expressed in PLD 1976 Lahore 616 referred to above can be differed with. Resultantly the answer to third question is that additional tax could be lawfully levied under Section 45A of the Income Tax Act, 1922. This Reference is disposed of accordingly with no order as to costs.