Supreme Court of Pakistan
The Commissioner Inland Revenue v M/s MCB Bank Ltd.
Published on this website · Updated
Civil Appeal No. 1468 of 2018
Citation: Judgment dated 8 July 2026; reporter citation not stated
Case summary
The judgment in brief
The Supreme Court held that an IAS-19 pension-fund surplus recorded in MCB Bank's accounts is taxable only when actually repaid to the employer.
Question of law
The legal question
Can an IAS-19 actuarial surplus in an approved bank pension fund be taxed before actual repayment to the employer under the Income Tax Ordinance, 2001?
Court holding
What the Court decided
Rule 4 of Part II of the Sixth Schedule requires actual repayment to the employer before the relevant approved pension-fund surplus is deemed taxable income. Rule 9 of the Seventh Schedule applies that specific rule to banks where the banking rules are silent.
Result
Outcome and directions
Revenue's appeal dismissed; Lahore High Court judgment in favour of MCB Bank upheld. First leave question answered in the negative, second in the affirmative.
Practical effect
What the decision means in practice
Revenue's appeal dismissed; Lahore High Court judgment in favour of MCB Bank upheld. First leave question answered in the negative, second in the affirmative.
This summary states the immediate effect recorded in the decision. The original judgment and the facts of the particular case remain controlling.
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Precedent record
Authority and later treatment
- Publication
- Citation recorded: Judgment dated 8 July 2026; reporter citation not stated
- Primary source
- Primary judgment PDF held in the journal library
- Later treatment
- No later judicial treatment has yet been editorially verified for this record
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Independent analysis
Read Shahbaz Shah's legal commentary
The Supreme Court held that an IAS-19 pension-fund surplus recorded in MCB Bank's accounts is taxable only when actually repaid to the employer.
Read full commentary →