Law: Income Tax Ordinance, 2001

Section: 161,205

Income tax Ordinance, 2001 (XLIX of 2001) - Sections 161, 205, SRO. 586(1)/1991, dated 30-06-1991 - Failure to pay tax collected or deducted - Initiation of proceedings by DCIR u/s 161 - Charge of default surcharge - Audited accounts containing material information for ascertaining level of compliance with withholding provisions available with Taxation Officer, but she did not examine these accounts and identify transactions on basis of which appellant could be treated as "Tax payer in default" in terms of section 161/205 - DCIR subjected to tax even those payments which were covered by exemption under SRO. 586(1)/1991 dated 30-06-1991 or were otherwise not liable to withholding provisions - remand of case by CIT(A) for de novo consideration - Validity - Whether orders passed u/s 161/205 without examination of record resulted in holding the appellant as a Taxpayer in default even in respect of payment of lease charges made to non-resident lessors, expenses covered under SRO. 586(1)/91 dated 30-06-1991, amounts which had not been paid up to the closing date and non-cash items although a little bit of care could have forestalled the possibility of taxation of such transactions - Held yes - Whether erratic and arbitrary disposal of case of appellant in utter disregard for norms of justice, judicial propriety and disregard for legal procedure to be followed before raising tax liability - Held yes - Whether instead of vacating order of DCIR as was done in cases relied upon by A.R. CIR(A) remanded case exposing appellant again to high handedness exhibited earlier - Held yes - Whether remanding case to DCIR or de novo consideration would tantamount to gross injustice to appellant, therefore it was held by Tribunal that order passed u/s 161/205 for both years was not sustainable in eye of law and was thus vacated - Held Yes. Orders passed under section 161/205 of the Income Tax Ordinance, 2001 without examination of record resulted in holding the appellant as a Taxpayer in default even in respect of payment of lease charges made to non-resident lessors, expenses covered under SRO. 586(1)/91 dated 30-06-1991, amounts which had not been paid up to the closing date and…

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