SC rejects DHA plea for income tax exemption

ISLAMABAD: The Supreme Court rejected four civil appeals from the Defence Housing Authority (DHA), Islamabad, challenging the denial of income tax exemption under Section 49 of the Income Tax Ordinance, 2001. The court ruled that DHA does not qualify as a "local authority" for this purpose, following the Islamabad High Court's January 14, 2019, ruling.

Justice Siddiqui authored the decision. The appeals stemmed from tax references filed in 2012, with DHA filing returns for tax years 2005 to 2008, asserting exemption under Section 49(2) due to its status as a local authority. The assessments were initially treated as assessments under Section 120. Subsequently, amendments under Section 122(5A) deemed them erroneous and detrimental to revenue, as DHA did not meet the criteria for "local authority".

Syed Tanseer Tassaduq Bukhari contested that DHA was a statutory authority with public and local powers, advocating a broader interpretation of "local authority". However, the court affirmed the high court's decision, concluding that DHA did not possess the requisite legal attributes to qualify as a local authority and thus, was ineligible for the exemption.