Federal Constitutional Court Strikes Down Section 7E of Income Tax Law

In a major legal development, the Federal Constitutional Court has issued its first significant ruling against the government by declaring Section 7E of the Income Tax Ordinance null and void.

The constitutional bench dismissed all appeals filed by the Federal Board of Revenue (FBR) seeking the restoration of Section 7E. The court also declared all actions taken by the FBR under the controversial provision invalid.

Section 7E had imposed taxes on certain immovable properties, including plots that were not under active use, leading to widespread criticism and legal challenges from property owners across the country.

Earlier, the Peshawar High Court, Balochistan High Court, and Islamabad High Court had ruled against Section 7E, declaring it unconstitutional. However, the Islamabad High Court and Lahore High Court had previously upheld the law as constitutional.

The Federal Constitutional Court accepted the appeals filed by citizens against the decisions of the Islamabad and Lahore High Courts, effectively overturning those rulings.

Chief Justice Aminuddin Khan announced the short verdict during the hearing in Islamabad. Legal experts are describing the decision as a landmark judgment with significant implications for Pakistan’s taxation and property sectors.

Further details are expected after the release of the detailed judgment.