LAHORE: The Lahore High Court has ruled that the tax on deemed income on immovable properties under Section 7E of the Income Tax Ordinance 2001 is unconstitutional.
In a 50-page judgment, Justice Shahid Jamil Khan declared that the market value of the immovable property as income is beyond the competence of federal legislators, and treating it as such is discriminatory under Article 25 of the Constitution.
Justice Khan allowed more than 1,000 petitions by taxpayers challenging the legislative competence of the federal government to levy the tax and the vires of Section 7E.
While he stated that the curative legislation is expected to bring the provisions of Section 7E within the spirit of taxing the capital value of assets, it should be harmonized with other provisions of the income tax ordinance.
The petitioners were represented by Salman Akram Raja, Saqib Jillani, Ahmad Qayyum, and other lawyers.
