Law: Income Tax Ordinance, 2001

Section: 11,11(1)(b),161,205,114(5),107,129(5),22 1,152(5),239

Income Tax Ordinance (XLIX of 2001),.. Sections 11(1)(b), 161, 205, 114(5), 107, 129(5), 221, 152(5), 239,. Income Tax Ordinance (XXXI of 1979),.. Sections 50(3), 168, 62, 78,.. Non-resident, resident tax-payer,.. Withholding Tax,.. Non-deduction,.. Ex-parte order,.. The Appellant was a Joint Venture of two non-resident members along with two resident members namely,.. The appellant entered into two agreements for international tenders with WAPDA on 19/12/1995,.. The assessing officer was of the view that the interest paid by the appellant to six non-resident Italian banks was subject to withholding tax deductions, under the provisions of Section 50(3) of the repealed Income Tax Ordinance, 1979,.. DCIR, passed six ex-parte orders under Section 205, Income Tax Ordinance 2001, pertaining to assessment years 1996-97 to 2001-2002, declaring appellants as resident AOP, and assessee in default in terms of Section 161 of the Income Tax Ordinance 2001, for non deduction of withholding tax on payments of interest made to six non-resident banks against loans obtained for purchase of machinery outside Pakistan and its import for the execution of project,.. Appeals before learned CIR(A), dismissed, hence the instant appeals,.. Show-cause Notice,..Appellant representatives submitted that the impugned Show-cause Notice and consequent orders under Sections 161/205 of the Income Tax Ordinance 2001 for alleged default of deduction of tax on the payments of interest made to non-resident banks outside Pakistan, under Section 50(3) of the repealed Ordinance, were void ab-initio and nullity in the eyes of law, the first point of argument was that the vital difference between Section 50(3) and other sub-Sections of Section 50 of the repealed Ordinance was, that Section 50(3) is attracted only if the income of non-resident recipient of payment is chargeable to tax in Pakistan,.. According to appellant's representative, action for alleged default under Section 50(3) of the repealed Ordinance, 1979 could not have been initiated without showing that the income of the non-resident banks was chargeable to tax under the provisions of the repealed Ordinance, it was pointed out that it is an…

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