Law: Income Tax Ordinance, 2001

Section: 153,155,149,161,165

[Income Tax Ordinance (XLIX of 2001)]...........Sections 153, 155, 149, 161 read with 205, 165,,. Order-in-Appeal,, Return,, Expenses,, Claim as BTL,.. Withholding agent,, Deduction,, Default,, Non-deduction of tax,.. Assessment,, Addition,.. Appeal before CIR(A) which was rejected, hence the instant appeal,.. Legal as well as factual objections were raised by the appellant,, It is well settled that collection/deduction cannot be avoided on assumptions,, It was noted by the Tribunal that the action of the Taxation officer was without identifying the parties from whom and how much tax was required to be deducted, it was also not determined the total amounts claimed as BTL whereas as per contention of the appellant most of the expenses incurred were petty cash and below the threshold limit of withholding tax, the logical conclusion was that no tax liability was to be created against tax-payer in default, the original and alternate liability to pay tax was of the recipient and the responsibility of the deducting or collecting the advance tax was saddled on the payer,.. The Tribunal further noted that this Tribunal in so many cases has held that " without identifying names and addresses of the parties of persons from whom and how much tax was to be deducted, provisions of Section 161, Income Tax Ordinance, 2001 could not be invoked Taxation Officer could not appreciate that the tax referred to be deducted under Section 161, Income Tax Ordinance, 2001 had to be of some indentified taxpayer/person and a tax-payer could be declared personally liable only after establishing that he was a withholding agent, who failed to withhold the tax from transaction, liable to such tax---Taxation Officer had misunderstood the spirit of Section 161, Income Tax Ordinance, 2001, as he himself had observed in his order under Section 161 that proceedings were initiated to ascertain the compliance level; he could only see whether withholdings, as per return and statutory statement was made or not and that any transaction, liable to withholding, deduction under Section 161, Income Tax Ordinance, 2001 unless the tax-payer was a withholding agent that a particular transaction was liable to…

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