Law: Income Tax Ordinance, 2001

Section: 4A,4K,113,113(1),113(3),221

Law: Income Tax Ordinance, 2001

Section: 4A,4K,113,113(1),113(3),221

Income Tax Ordinance, 2001 (XLIX of 2001 - Sections: 4A, 4K, 113 & 221 - Rectification of mistakes - Appellant fled false and misleading statement in return of income - Minimum Tax charged on his income and also surcharge on minimum tax liability by assessing officer - Confirmation of treatment by CIR(A) in appeal - Validity - Appellant disclosed gross profit as per accounts of more than 300 million - Errors found after examining its deemed assessments - Show Cause Notice issued by DCIR - Reply to show cause notice on account of non - application of section 113, due to gross loss, found incorrect - Order passed u/s 221 - Tax charged u/s 113 on declared turn over together with surcharge on minimum tax liability - Appeals rejected by CIR(A) - Challenge to - Whether failure of application of any provision of law falls under purview of rectification - Held yes - Whether scope of rectification cannot be limited to arithmetical error and any mistake of law which is glaring and floating on surface can be rectified - Held yes - Whether departmental action to invoke provisions of section 221 was correct treatment and findings of CIR(A) on issue in reference to case laws relied upon by taxpayer are endorsed and consequently appeals on this issue fail in both years - Held yes - Whether standard from classification of various heads of expenses and their respective placement not only possess strength of As, GAAP, IFRs but Companies Ordinance, Income Tax Ordinance and other enactments of state led compliance institutions relying on financial statements - Held yes - Whether taxpayer is trade and as such not involved in any manufacturing activity, so expense of depreciation would be indirect in his case, but on contrary it claims depreciation as direct expense - Held yes - Whether term gross refers to total amount received as result of some activity whereas bet refers to amount left over after all deductions are made - Held yes - Whether declaration of debtors / creditors / inventory etc. fortify findings of two officers below that taxpayer is trade and not commission Agent, therefore, for levy of minimum tax, turnover of taxpayer should be same as is defined vide section…

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