Law: Income Tax Ordinance, 1979

Section: 50(4)

Law: Income Tax Ordinance, 2001

Section: 239(12)

ORDER M. M. AKRAM (Judicial Member): This appeal has been filed by the appellant/taxpayer against the order-in-Appeal No.279/2018 dated 08.11.2018 passed by the learned Commissioner Inland Revenue (Appeals-II), Islamabad for the Tax Year 2016 on the grounds as set forth in the memo of appeal. Subsequently the appellant amended its original grounds of appeal. 2. Brief facts culled out from the record are that the appellant is engaged in the business of processing and export of rice. The appellant is liable to deduct tax at the time of making payments to the recipients under the provisions of the Income Tax Ordinance, 2001 ("the Ordinance"). The appellant did not fully discharge its legal duty of withholding agent while making payments. The appellant was confronted with certain anomalies through notices asking for various details/documents and after considering the reply, the Assessing Officer passed an order against the appellant creating thereby a tax demand of Rs.11,728,431/- for the tax year 2016. The appellant preferred an appeal before the learned CIR(A) who vide order dated 08.11.2018 remanded the case to the Assessing Officer on certain issues and confirmed the treatment meted out by the DCIR on account of purchase of rice and BTL Salaries. Being aggrieved, the appellant has now come up before this forum and has assailed the impugned order on the aforesaid two issues. 3. The learned Counsel appearing on behalf of the appellant/taxpayer contended that the appellant being an exporter of Brown Rice is not required to deduct tax while making payment to the recipient in terms of SRO No.368(I)/94 dated 07-05-1994.Further submits that the Assessing Officer has wrongly charged the tax @ 1.5% as specified in Division III, Part-III of First Schedule to the Ordinance by treating it as rice whereas all products i.e. rice, paddy, brown rice etc. having different H.S Code does not come within the ambit of such provisions. Reliance was placed on 1992 SCMR 663 and 2015 PTD 1855. As far as alleged non-deduction of tax on account of salaries is concerned, the learned AR submits that the appellant did not deduct the tax on an amount of Rs.12,379,988/- for the reason that…

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