Law: Income Tax Ordinance, 1979

Section: 8,50(4),50(4)(a),52

(a) Income Tax Ordinance (XXXI of 1979)--- ----S. 52---Liability of persons failing to deduct or pay tax---Rate of tax---Contention of Revenue was that deduction of tax for turnkey power projects should be at 8% and not 4% in respect of a contract was incorrect---ECC directive as accepted by the Federal Board of Revenue had already settled the issue with regard to such contract---Contention of the taxpayer seemed to be correct in submitting that Revenue was unnecessarily reopening a dispute which had been long settled. (b) Income Tax Ordinance (XXXI of 1979)--- ----S. 52---Liability of persons failing to deduct or pay tax---Jurisdiction of Assessing Officer of the recipient or the payer---Where original assessment was framed on 15-9-1998 the operative which held the field was 1999 PTD 4037 in terms whereof the jurisdiction under S.52 of the Income Tax Ordinance, 1979 only vested with the Assessing Officer of the recipient and not the payer---Assessments were framed by the Assessing Officer of the assessee/payer whereas for the purposes of S.52 of the Income Tax Ordinance, 1979, before amendment, the jurisdiction vested with the Assessing Officer of the recipient---All original assessment orders dated 15-9-1998 were void---Section 52 of the Income Tax Ordinance, 1979 was amended by Finance Act, 1999, which was only effective from 1-7-1999--- Amendment was in the shape of an explanation to S.52 of the Income Tax Ordinance, 1979 which was noted by the High Court in a case reported as 2001 PTD 570 in which, by majority of two against one, it was held that after the amendment by Finance Act, 1999 for the purposes of S.52 of the Income Tax Ordinance, 1979, the jurisdiction to treat a person as an assessee in default lay with the Assessing Officer of the payer and not the recipient---Amendment to S.52 of the Income Tax Ordinance, 1979 was retrospective in nature, but this only meant that on 1-7-1999 (i.e. the date on which S.52 of the Income Tax Ordinance, 1979 was amended by Finance Act, 1999) if the assessments were not framed for the years prior to the Finance Act, 1999, S.52 of the Income Tax Ordinance, 1979 would be applicable to even those prior years---Judgment…

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