Law: Income Tax Ordinance, 2001

Section: 128(5),153(1)(b),153(7)(b),161,205

Income Tax Ordinance, 2001 (XLIX of 2001) - Sections 128(5), 153(1)(b), 153(7)(b), 161 & 205 - SRO 586(I)/91, dazed 30-6-1991 - Failure to pay tax collected or deducted - Withholding agent - Payment for goods and services - Default in withholding tax - Contention of taxpayer that no tax was to be deducted at source on payment to persons who produced exemption certificates and that was not deductible in light of different exemptions under Clause (i), (ii), (vi ), (ix), (x), (xii), and (xv) of SRO 586(I)/91, dated 30-6-1991 and also u/s 149, 151, 155 of Income Tax Ordinance, 2001 - It was also stated that taxpayer has deducted tax and deposited into Govt. Treasury, where it was deductible - Issuance of Notice u/s 161 by DCIR, wherein it was conveyed that Tax was not deducted u/s 153(1)(b) on all manufacturing expenses, profit and loss expenses showing taxpayer defaulter of withholding tax and to charge Tax @ 6% which was to be deducted u/s 153(1)(b) - Failure to furnish documents/evidence to ascertain veracity of contention of taxpayer for non-deduction of tax at source - DCIR held that Taxpayer was in default u/s 153(1)(b) and charged Tax u/s 161(1)(a) @ 6% on consolidated amount of all expenses - CIR(A), in appeal deleted additions made in certain manufacturing expenses and profit and loss expenses - In respect of remaining expenses claimed under manufacturing expenses and profit and loss account, CIR(A) observed that this was deducted and deposited, wherever applicable, while remaining payments were exempt under law - Evan then CIR(A) held that Taxpayer is liable to withholding lax in six heads of manufacturing expenses and ten heads of profit and loss expenses both in Tax Year 2010 and 2011 - Deletion and reduction of tax - Validity - Contention of Deptt. in both years is that u/s 128 (5) of Ordinance, CIR(A) was not justified to entertain documents/evidence which were not produced before Taxation Officer and that ClR(A) was not justified to delete and reduce tax charges u/s 161/205 on basis of documents/evidence - Challenge to - Whether contention of AR of Appellant carries weight as Taxpayer was prevented by sufficient cause due to which he could not…

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