Cir Multan vs M/S Bank Al Habib Ltd

Stereo. H C J D A-38.

JUDGMENT SHEET

IN THE LAHORE HIGH COURT, MULTAN BENCH,

MULTAN

JUDICIAL DEPARTMENT

I.T.R. No.09 of 2026

The Commissioner Inland Revenue, Zone-II, LTO, Multan Versus M/s Bank Al-Habib Limited, Multan

JUDGMENT

Date of hearing: 06.10.2026.

Applicant by: Mr. Muhammad Suleman Bhatti, Advocate. Respondent by: Mr. Mansoor Beg, Advocate.

MUHAMMAD SAJID MEHMOOD SETHI, J.:- This consolidated judgment shall decide instant Reference Application under Section 133 of the Income Tax Ordinance, 2001 (“the Ordinance of 2001”), along with the connected cases i.e. I.T.R. Nos. 10, 12 & 13 of 2026, as common questions of law and facts are involved in these cases.

2.The following questions of law, asserted to have arisen out of the impugned orders, passed by the learned Appellate Tribunal Inland Revenue of Pakistan (Division Bench), Multan (“Appellate Tribunal”), have been pressed and argued for our opinion:-

I.T.R. NO. 09 OF 2026

A. Whether on the facts and in the circumstances of the case, learned ATIR was justified to hold that taxpayer is entitled to compute income as per Section 100A read with Seventh Schedule of the Income Tax Ordinance, 2001, excluding the application of Rule 9 of the Seventh Schedule of Income Tax Ordinance, 2001, which mandates that provisions of the Ordinance not specifically dealt with in the Schedule shall apply mutatis mutandis to banking companies? B. Whether the learned Appellate Tribunal was justified to allow the "charge for defined benefit plan and provision for compensated absences" on actuarial basis, ignoring the fact that the liability was contingent, unascertained and not actually paid, in violation of sections 34 read with rule 9 of the Income Tax Ordinance, 2001?

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C. Whether the learned Appellate Tribunal was justified in holding that foreign currency translation reserve is not taxable, despite the fact that the exchange gain credited to profit and loss account represents realization of income under sections 9 of the Ordinance?

D. Whether the learned ATIR was justified in deleting the addition on account of 'reversal of provisions' without appreciating that if a provision was previously allowed as a deduction, its reversal constitutes income under the Doctrine of Recoupment and Section 70 of the Ordinance? E. Whether, on the facts and in the circumstances of the case, the learned Appellate Tribunal was justified in law in holding that expenses cannot be allocated against the fixed or final income, despite the fact that expenditure attributable to final income is expressly apportioned under section 67 of the Income Tax Ordinance, 2001 and Rule 13 of Income Tax Rules, 2002, and in disregard of the settled law laid down by the Honorable Lahore High Court in 2005 PTD 2599?

I.T.R. NO. 10 OF 2026

A. Whether on the facts and in the circumstances of the case, learned ATIR was justified to hold that taxpayer is entitled to compute income as per Section 100A read with Seventh Schedule of the Income Tax Ordinance, 2001, excluding the application of Rule 9 of the Seventh Schedule of Income Tax Ordinance, 2001, which mandates that provisions of the Ordinance not specifically dealt with in the Schedule shall apply mutatis mutandis to banking companies? B. Whether the learned Appellate Tribunal was justified to allow the "charge for defined benefit plan and provision for compensated absences" on actuarial basis, ignoring the fact that the liability was contingent, unascertained and not actually paid, in violation of sections 34 read with rule 9 of the Income Tax Ordinance, 2001?

C. Whether the learned Appellate Tribunal was justified in holding that foreign currency translation reserve is not taxable, despite the fact that the exchange gain credited to profit and loss account represents realization of income under sections 9 of the Ordinance?

D. Whether, on the facts and in the circumstances of the case, the learned Appellate Tribunal was justified to hold once reversal is reduced from charge for the year, it cannot be taxed again, whereas the reversal against already availed tax relief is chargeable to tax upon its reversal, despite the fact that the provision was earlier allowed/deducted while computing taxable income, thereby attracting the provisions of section 70 and the doctrine of recoupment? E. Whether, on the facts and in the circumstances of the case, the learned Appellate Tribunal was justified in law in holding that expenses cannot be allocated against the fixed or final income, despite the fact that expenditure attributable to final income is expressly apportioned under section 67 of the Income Tax Ordinance, 2001 and Rule 13 of Income Tax

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Rules, 2002, and in disregard of the settled law laid down by the Honorable Lahore High Court in 2005 PTD 2599?

I.T.R. NO. 12 OF 2026

A. Whether on the facts and in the circumstances of the case, learned ATIR was justified to hold that taxpayer is entitled to compute income as per Section 100A read with Seventh Schedule of the Income Tax Ordinance, 2001 without adhering to the effect of Rule 9 of the Seventh Schedule of Income Tax Ordinance, 2001, which provides that provisions not specifically dealt with in the schedule shall apply mutatis mutandis to the banking companies?

B. Whether the learned ATIR was justified to allow the "charge for defined benefit plan, provision for compensated absences, and provision against other assets on assumption basis, ignoring the fact that the liability was contingent, unascertained and not actually paid, in violation of sections 34 read with rule 9 of the Income Tax Ordinance, 2001? C. Whether on the facts and in the circumstances of the case, learned ATIR was justified in holding that exchange difference on net investment in foreign branch is not taxable, despite the fact that exchange gains credited to profit and loss account represent realized income under section 9 read with Rule 9 of the 7th Schedule?

I.T.R. NO. 13 OF 2026

A. Whether on the facts and in the circumstances of the case, learned ATIR was justified to hold that taxpayer is entitled to compute income as per Section 100A read with Seventh Schedule of the Income Tax Ordinance, 2001 without adhering to the effect of Rule 9 of the Seventh Schedule of Income Tax Ordinance, 2001, which provides that provisions not specifically dealt with in the schedule shall apply mutatis mutandis to the banking companies?

B. Whether the learned ATIR was justified to allow the "charge for defined benefit plan, provision for compensated absences, and provision against other assets on assumption basis, ignoring the fact that the liability was contingent, unascertained and not actually paid, in violation of sections 34 read with rule 9 of the Income Tax Ordinance, 2001? C. Whether the learned ATIR was justified to allow the 'Provision for Diminution in the Value of Investment despite such provision not being an allowable expenditure under Rule 1(g) of the Seventh Schedule and ignoring the fact that the liability was contingent, unascertained and not actually paid, in violation of sections 34 read with rule 9 of the Income Tax Ordinance, 2001?

D. Whether on the facts and in the circumstances of the case, learned ATIR was justified in holding that exchange difference on net investment in foreign branch is not taxable, despite the fact that exchange gains credited to profit and

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loss account represent realized income under section 9 read with Rule 9 of the 7th Schedule?

BRIEF FACTS OF THE CASE

3.Briefly stated, the respondent-bank, a banking company, filed returns of income for Tax Years 2012, 2013, 2020 and 2022, which were treated as assessments under section 120(1) of the Income Tax Ordinance, 2001. The assessments were amended under sections 122(5A) and 122(9) of the Ordinance, resulting in additions on account of provisions for defined benefit plans and compensated absences, exchange differences on net investment in foreign branches, reversal of provisions, apportionment of expenditure under section 67, diminution in the value of investments and provisions against other assets. By way of illustration, in I.T.R. No.10 of 2026 (Tax Year 2013) the amended assessment dated 28.10.2015 determined income at Rs.10,295,752,721 and raised a demand of Rs.426,720,775. The appeals for Tax Years 2012 and 2013 were decided by the learned Appellate Tribunal Inland Revenue, Multan Bench, through orders dated 21.11.2025, after the learned Commissioner Inland Revenue (Appeals). The appeals for Tax Years 2020 and 2022 reached the Tribunal directly under section 126A and were decided through orders dated 11.12.2025. The Tribunal deleted or allowed various additions, principally holding that the respondent-bank’s income is governed by the special regime under section 100A read with the Seventh Schedule and that the department cannot invoke the general provisions of the Ordinance to disturb it. In I.T.R. Nos.12 and 13 of 2026 it also remanded the donations claims for determination of the tax credit under section 61. Its other findings, including those adverse to the respondent-bank and the remand of a particular item in the instant Reference Application, were left undisturbed. Aggrieved by the relief granted to the respondent-bank, the department has invoked the reference jurisdiction of this Court under section 133 of the Ordinance of 2001, raising common and connected questions of law concerning

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the applicability of Rule 9 of the Seventh Schedule and the tax treatment of the aforesaid items.

4.Learned counsel for the applicant-department contends that the learned Appellate Tribunal misconstrued the Seventh Schedule as an exclusive code and failed to give effect to Rule 9, which expressly incorporates, mutatis mutandis, the provisions of the Ordinance not specifically dealt with in the Schedule. He argues that the disputed deductions and adjustments could not lawfully be allowed without examining the applicable statutory requirements and that accounting classification or reliance upon earlier decisions could not substitute the requisite legal analysis. In support, he has reliance upon the order dated 10.12.2025 passed by this Court in I.T.R. No. 65 of 2024 titled Commissioner Inland Revenue, Zone-II, LTO, Multan v. M/s Bank Al- Habib Limited. Conversely, learned counsel for the respondent-bank supports the impugned orders, submitting that section 100A read with the Seventh Schedule constitutes a special regime for banking companies which cannot be displaced by the general provisions of the Ordinance. Reliance is placed upon Commissioner of Income Tax, Companies II, Karachi v. Messrs Oriental Dyes & Chemicals Co. Ltd. [1992 SCMR 763 = (1992) 65 TAX 254], order dated 19.03.2025, passed by the Hon’ble Supreme Court in C.P.L.A. Nos. 2623-L to 2628-L of 2018 titled Commissioner Inland Revenue, Lahore v. M/s Kohinoor Energy Limited, Lahore, Commissioner of Income Tax (Central Zone), Karachi v. Pakistan Security Printing Corporation Ltd., Karachi [(1985) 51 TAX 137], Commissioner Legal Division v. Civil Aviation Authority [(2008) 97 TAX 301], The Commissioner Inland Revenue v. M/s Mannowal Textile Mills Limited [2019 PTD 1811 = (2019) 120 TAX 565], Commissioner Inland Revenue v. M/s Prime Commercial Bank Ltd. [(2023) 127 TAX 29], Commissioner Inland Revenue v. M/s Allied Bank Limited [(2023) 127 TAX 147], Commissioner of Income Tax v. Prime Commercial Bank Ltd. [(2023) 127 TAX 215], order dated 11.04.2018, passed by a learned Division Bench of this Court in I.T.R. No. 43015 of 2017 titled Commissioner

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Inland Revenue v. M/s Kohinoor Energy Limited, order dated 18.09.2018, passed by a learned Division Bench of this Court in I.T.R. No. 224 of 2016 titled Commissioner Inland Revenue v. M/s. Kohinoor Energy Ltd., judgment dated 18.01.2023, passed by a learned Division Bench of this Court in P.T.R. No. 164 of 2013 titled Commissioner Inland Revenue v. M/s Soneri Bank Ltd. and judgment dated 20.02.2023, passed by a learned Division Bench of this Court in P.T.R. No. 181 of 2013 titled Commissioner Inland Revenue v. The Bank of Punjab.

5.We have heard learned counsel and examined the available record. Since common questions of law arise in these consolidated Reference Applications, the controversy is considered under the relevant heads, keeping in view the statutory framework, the binding precedents and the particular findings recorded by the learned Appellate Tribunal in each case.

APPLICABILITY OF RULE 9 OF THE SEVENTH SCHEDULE

6.The principal question concerning section 100A read with the Seventh Schedule is governed by the order dated 10.12.2025 passed by this Court in I.T.R. No. 65 of 2024 titled Commissioner Inland Revenue, Zone-II, LTO, Multan v. M/s Bank Al-Habib Limited, read with the judgment in Commissioner Inland Revenue v. M/s Allied Bank Limited [(2023) 127 TAX 147]. These authorities recognise that the special regime applicable to banking companies does not exclude the provisions of the Income Tax Ordinance, 2001, in respect of matters not specifically dealt with in the Seventh Schedule. Rule 9 expressly provides for the application, mutatis mutandis, of the remaining provisions of the Ordinance. The special regime must, therefore, be read harmoniously with Rule 9 rather than as an exclusive code insulating every item of income or expenditure from the general provisions of the Ordinance.

7.The order dated 10.12.2025 further clarifies that a deduction cannot be allowed merely by relying upon accounting treatment or decisions rendered under the repealed Income Tax Ordinance, 1979,

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without examining whether the corresponding deduction is permissible under the applicable provisions of the Ordinance of 2001. The decisions relied upon by the respondent-bank must be applied according to their respective ratios and the statutory framework governing the relevant tax years. Equally, Rule 9 does not authorise the general provisions of the Ordinance to override a matter specifically regulated by the Seventh Schedule. The applicability of Rule 9 is thus a question of law distinct from the ultimate admissibility of each disputed item.

8.Accordingly, the questions concerning the applicability of section 100A read with Rule 9 of the Seventh Schedule are answered in favour of the applicant-department and against the respondent- bank. This answer, however, does not by itself validate any particular addition or disallowance. Each disputed item must independently satisfy the statutory requirements applicable to the relevant tax year.

DEFINED BENEFIT PLANS AND COMPENSATED

ABSENCES

9.The claims relating to compensated absences and defined benefit plans require separate consideration. In Commissioner of Income Tax, Companies II, Karachi v. Messrs Oriental Dyes & Chemicals Co. Ltd. [1992 SCMR 763 = (1992) 65 TAX 254], the Honourable Supreme Court recognised the deductibility of an accrued liability arising under an enforceable entitlement, notwithstanding that payment had not yet been made. The Lahore High Court, in P.T.R. No. 164 of 2013, titled Commissioner Inland Revenue v. M/s Soneri Bank Ltd., decided on 18.01.2023, and P.T.R. No. 181 of 2013, titled Commissioner Inland Revenue v. The Bank of Punjab, decided on 20.02.2023, applied the relevant principles to claims concerning compensated absences under the Ordinance of 2001. These authorities do not permit a claim for compensated absences to be disallowed merely because the accrued liability remains unpaid.

10.The claim relating to a defined benefit plan must likewise be assessed according to the nature of the obligation and the applicable

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statutory provisions. The principle recognised in Oriental Dyes is that an accrued liability arising from an enforceable retirement benefit is not rendered inadmissible merely because its payment is deferred. An actuarial computation does not, by itself, make an otherwise enforceable liability contingent or unascertained. The relevant consideration is whether the liability has accrued, is reasonably ascertainable and satisfies the conditions for deduction under the applicable law. The decision in Messrs Telenor Pakistan (Pvt.) Ltd. v. Appellate Tribunal Inland Revenue, Islamabad and others (2024 PTD 619) must also be read in the context of the issue and circumstances considered therein.

11.The learned Appellate Tribunal's conclusion in favour of the respondent-bank on defined benefit plans and compensated absences is consistent with the governing principle that an accrued and reasonably ascertainable liability is not inadmissible merely for want of actual payment. Section 34 cannot, however, be excluded merely by invoking the special regime under section 100A and the Seventh Schedule; Rule 9 must be given effect to. Nevertheless, the department's challenge, as presented, does not establish that the relevant liabilities had not accrued or that the charges were otherwise inadmissible under the applicable law. No remand is, therefore, warranted on these two heads. The questions concerning defined benefit plans and compensated absences are answered in favour of the respondent-bank. This answer does not extend to the separate claims concerning provisions against other assets in I.T.R. Nos. 12 and 13 of 2026, which are dealt with independently below.

FOREIGN CURRENCY TRANSLATION RESERVE

12.The tax treatment of exchange differences arising from the translation of a net investment in a foreign branch depends upon the true nature of the transaction, the accounting entries and the applicable provisions of the Ordinance. The decisions in M/s Kohinoor Energy Limited, relied upon by the respondent-bank, arose in the context of a power-generation undertaking and the exemption

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invoked under clause 132 of Part I of the Second Schedule. They do not establish a general rule that foreign currency translation differences of a banking company are necessarily exempt from tax. Nor can an amount be held taxable merely because a related exchange gain has been recognised elsewhere in the accounts.

13.The record discloses a material factual controversy. In some of the connected cases, the assessing authority treated the disputed amount as involving an actual inflow not routed through the profit and loss account, whereas the respondent-bank characterises it as a translation adjustment relating to its net investment in foreign branches. The department's question, insofar as it proceeds on the assumption that the gain was credited to the profit and loss account, must be examined against the actual findings and accounting record. The learned Appellate Tribunal's conclusion that the amount was non- taxable cannot be sustained without resolving this controversy and applying section 9 and the other relevant provisions of the Ordinance, read with Rule 9 of the Seventh Schedule, where applicable.

14.The questions concerning foreign currency translation differences cannot be conclusively determined on the present record. The findings of the learned Appellate Tribunal on this issue are, therefore, set aside to the limited extent identified above, and the matters are remanded to the learned Appellate Tribunal for fresh determination in accordance with law. The learned Appellate Tribunal shall examine the relevant accounts, the nature of the transactions, whether any gain was realised, the actual treatment of the disputed amounts in the accounts and the applicability of section 9 and the other relevant provisions of the Ordinance, read with Rule 9 of the Seventh Schedule where applicable. The matters shall be decided independently on the evidence and after affording the parties an opportunity of hearing.

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REVERSAL OF PROVISIONS — I.T.R. NOS. 09 AND 10 OF

15.The principle governing the reversal of provisions is that an amount brought to tax upon reversal cannot be subjected to double taxation where the same amount had previously been allowed as a deduction and its tax treatment is established on the record. Section 70 and the authorities relied upon by the respondent-bank, including Soneri Bank and The Bank of Punjab, must be applied to the particular amounts and the relevant statutory provisions. The decisive question is whether the specific provisions reversed had previously been allowed as deductions or otherwise subjected to tax in the manner asserted by the respondent-bank. The mere existence of a reversal entry does not establish that essential factual premise.

16.The findings recorded by the learned Appellate Tribunal require verification because the treatment of the disputed reversals is not consistent across the relevant items. In particular, the record must establish whether the amounts reversed had previously been allowed as deductions or had otherwise been subjected to tax. The difference between Rs.164.880 million and Rs.168.880 million recorded in I.T.R. No. 09 of 2026 also requires reconciliation. On the figures reproduced in the Tribunal's order, the difference between the total provision of Rs.1,985.668 million and the actual charge to the profit and loss account of Rs.1,820.788 million is Rs.164.880 million. The arithmetical discrepancy does not, by itself, determine the prior tax treatment of the reversed amount.

17.The principle against double taxation is, therefore, recognised in favour of the respondent-bank, but the factual determination concerning the prior tax treatment of the disputed reversals cannot be sustained without verification. The findings on this head are set aside to the limited extent necessary, and the matters are remanded to the learned Appellate Tribunal to identify the amounts reversed, verify their previous treatment in the assessments and determine the issues afresh in accordance with section 70 and the applicable law. No

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amount shall be treated as taxable merely because it has been reversed, nor shall the benefit of the principle against double taxation be allowed without establishing its factual basis.

APPORTIONMENT OF EXPENDITURE UNDER SECTION 67

— I.T.R. NOS. 09 AND 10 OF 2026

18.The controversy concerning apportionment of expenditure requires consideration of section 67 of the Income Tax Ordinance, 2001, Rule 13 of the Income Tax Rules, 2002, and the judgment reported as Messrs Crescent Investment Bank Ltd. v. Income Tax Appellate Tribunal (2005 PTD 2599). In the latter case, this Court, while interpreting the Income Tax Ordinance, 1979, held that income falling under separate statutory heads could not be merged merely on the plea of composite business and that a taxpayer could not resist allocation of expenses attributable to exempt capital gains by relying upon its failure to maintain or produce the relevant accounts. The judgment, however, arose under the repealed Ordinance and concerned the treatment of capital gains under sections 15, 22, 27 and 28 thereof. It did not directly interpret section 67 of the Ordinance of 2001 or Rule 13 of the Income Tax Rules, 2002, in the context of a banking company governed by section 100A read with the Seventh Schedule. Its ratio must, therefore, be appreciated in its statutory context.

19.The question of allocation of expenses to dividend and capital- gains income under section 67 of the Ordinance, read with Rule 13 of the Rules, has already been considered by this Court in P.T.R. No. 181 of 2013 titled Commissioner Inland Revenue v. The Bank of Punjab decided on 20.02.2023. While deciding Question No. 8, the Court followed its earlier decisions in P.T.R. No. 53 of 2006 titled Commissioner Inland Revenue v. Prime Commercial Bank Ltd. and P.T.R. No. 529 of 2012 titled Commissioner Inland Revenue v. Allied Bank Ltd. and decided the question against the department. The same approach was adopted in P.T.R. No. 164 of 2013 titled Commissioner Inland Revenue v. M/s Soneri Bank Ltd. decided on 18.01.2023. These

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judgments directly address the department's objection to the deletion of expenses allocated to dividend and capital-gains income and are to be followed in the present references. The judgment in Crescent Investment Bank does not warrant a contrary conclusion, as it arose under the repealed Ordinance and a materially different statutory framework. Likewise, the insertion of Rules 6A and 6B by the Finance Act, 2014, does not, by itself, justify applying a different rule of apportionment to Tax Years 2012 and 2013. Accordingly, the questions concerning apportionment of expenditure under section 67 are answered against the applicant-department and in favour of the respondent-taxpayer.

DIMINUTION IN THE VALUE OF INVESTMENTS — I.T.R.

NO. 13 OF 2026

20.The claim for diminution in the value of investments must be determined under the Ordinance of 2001 applicable to Tax Year 2020. The earlier decisions relied upon by the respondent-bank, including those rendered under the repealed Income Tax Ordinance, 1979, cannot be applied without examining the corresponding provisions of the current Ordinance. The order dated 10.12.2025 passed in I.T.R. No. 65 of 2024 requires the learned Appellate Tribunal to determine the character and purpose of the investment, the nature of the claimed diminution and its admissibility under the applicable statutory provisions, including sections 20 and 21 and Rule 1(g) of the Seventh Schedule, to the extent relevant.

21.The learned Appellate Tribunal allowed the claim of Rs.1,650,116,278 without adequately resolving these matters. The department's objections that the provision is not allowable under Rule 1(g) and that the claimed liability is contingent, unascertained and unpaid require determination in the context of the applicable statutory provisions and the evidence on record. The claim cannot be allowed merely because similar accounting treatment was recognised in decisions arising under a different statutory regime, nor can it be rejected without examining the relevant facts and provisions. The

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finding of the learned Appellate Tribunal on this head is set aside, and the matter is remanded for fresh determination in accordance with the principles stated above, after affording the parties an opportunity of hearing.

PROVISIONS AGAINST OTHER ASSETS — I.T.R. NOS. 12

AND 13 OF 2026

22.The provisions against other assets, amounting to Rs.613,000 and Rs.450,000, were disallowed by the assessing authority on the ground that the claims had not been substantiated. The learned Appellate Tribunal relied upon authorities concerning other categories of provisions without adequately determining the nature of the disputed items or the evidence supporting them. A provision against other assets cannot automatically be equated with a provision for bad debts or a provision against advances, nor can it be disallowed merely because it is described as a provision. Its admissibility depends upon the applicable statutory provisions and the facts established on the record.

23.The findings on this head involve a mixed question of fact and law. The record does not permit a conclusive determination of the nature of the provisions and their admissibility under the relevant provisions of the Ordinance and the Seventh Schedule. The findings of the learned Appellate Tribunal are, therefore, set aside on this limited issue, and the matters are remanded for fresh determination after examination of the supporting material and the applicable statutory provisions, with an opportunity of hearing to both parties. This remand is confined to the provisions against other assets and does not disturb the answer in favour of the respondent-bank concerning defined benefit plans and compensated absences.

SECTION 124A OF THE ORDINANCE AND SECTION 24-A

OF THE GENERAL CLAUSES ACT, 1897

24.No separate question of law has been framed in the present Reference Applications concerning the learned Appellate Tribunal's treatment of section 124A of the Ordinance. The principle recognised

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in Soneri Bank must be applied according to its ratio and the statutory conditions governing its operation. In the absence of a properly referred question warranting interference, the finding of the learned Appellate Tribunal on this point is left undisturbed. Section 24-A of the General Clauses Act, 1897, requires the exercise of statutory powers in a reasonable, fair and just manner and, where applicable, for reasons to be recorded. It is not an independent ground for reopening every factual or legal finding of the learned Appellate Tribunal. The deficiencies identified in the present cases are addressed under the respective disputed heads. No separate answer adverse to the respondent-bank is warranted under section 24-A merely because the department disagrees with the Tribunal's reasoning.

NON-SPEAKING ORDER OBJECTION

25.The impugned orders contain detailed discussion of the disputed claims. The deficiencies identified in this judgment concern particular legal tests, factual inconsistencies and the need for further determination of specified items; they do not, as framed, establish that the entire orders are non-speaking. Those deficiencies have been addressed under the respective heads. The general objection concerning the adequacy of the Tribunal's reasoning does not warrant setting aside findings which are otherwise supported by binding authority or for which no independent error of law has been established.

CONCLUSION AND ORDER

26.For the foregoing reasons, the questions concerning the applicability of section 100A read with Rule 9 of the Seventh Schedule are answered in favour of the applicant-department and against the respondent-bank. The questions concerning defined benefit plans and compensated absences are answered in favour of the respondent-bank. In I.T.R. Nos. 09 and 10 of 2026, the questions concerning apportionment of expenditure under section 67 are also answered in favour of the respondent-bank. The findings concerning foreign currency translation differences, reversal of

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provisions, diminution in the value of investments and provisions against other assets are set aside to the limited extent identified above, and those matters are remanded to the learned Appellate Tribunal for fresh determination in accordance with law, after examination of the relevant record and applicable statutory provisions and after affording the parties an opportunity of hearing. The remand concerning provisions against other assets in I.T.R. Nos. 12 and 13 of 2026 is distinct from the answer in favour of the respondent-bank on defined benefit plans and compensated absences. The finding concerning section 124A is left undisturbed, and no separate adverse answer is warranted on the general objection under section 24-A or the non-speaking-order objection as framed.

27.Consequently, the four Reference Applications are partly allowed in the above terms. The impugned orders dated 21.11.2025 and 11.12.2025 are set aside only in respect of the specific matters remanded for fresh determination. The findings favourable to the respondent-bank on the heads answered in its favour shall remain undisturbed. No addition shall stand restored merely by reason of the answer concerning Rule 9; the tax treatment of each remanded item shall be determined by the learned Appellate Tribunal in accordance with this judgment.

28.A copy of this judgment shall be transmitted to the learned Appellate Tribunal under the seal of this Court in accordance with section 133(8) of the Income Tax Ordinance, 2001.

(Sultan Tanvir Ahmad) (Muhammad Sajid Mehmood Sethi) Judge Judge

APPROVED FOR REPORTING

Judge Judge

*A.H.S.*