Law:

Section: 161,12(6),149(2),205,12(8),205

(a) Income Tax Ordinance (XLIX of 2001)---Ss. 161, 12(6), 149(2) & 205---Failure to pay tax collected or deducted---Voluntary Separation Scheme---Deduction of tax at average/concessoinal rates---Assessee in default---Appeal---Validity---Deductoin of withholding tax had to be made by 30th June of the relevant year---Option for,assessment at average/concessional rates had to be filed by 30th September of the relevant year by the taxpayers, who were the retiring employees of assessee company---Duties and functions of Company (withholding agent) and retiring employees were totally different---Company was required to make deduction of tax according to law but failed to do so---Company made deduction of tax according to the liability of retiring employees after working out on the basis of their options for assessment at average/concessional rates---Withholding tax was not deducted according to prescribed rates, rather deducted on reduced rates after taking into account the reduced liability Of-each employee on the basis of their options for assessment of their income on such rate---Tax deduction was made on concessional/ average rates and not according to prescribed rates, the default was established on record that tax was not deducted on prescribed rates. Central Exchange Bank Limited v. CIT (1951) 2 Tax 121 (H.C. Pak.); CIT v. National Taj Traders AIR 1980 SC 485; AIR 1976 SC 314; AIR 1963 SC 1062; 1982, ALI 1140; India United Mills Ltd., v. CEPT AIR 1955 SC 79 at 82; Commissioner of Income Tax, North Zone, Lahore v. Warris Silk Weaving and Knitting Mills, Gujranwala (1972) 28 Tax 181 (Lah.); 2006 PTD (Trib.) 288 and 2003 PTD 2689 ref. (b) Income Tax Ordinance (XLIX of 2001)--- ---S.12(8)---Salary---Notice to elect the amount to be taxed at average/concessional rate---Company claimed that options of employees were filed with different functional units of the Income Tax Department---Claim was not supported with any evidence, because no proof was brought on record in its support---Options collected by Company were sent in bulk to the Commissioners of various regions but there was no proof of their receipt in the respective regions---Even postal or courier…

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