Law: Income Tax Ordinance, 2001

Section: 161,165

THIS ORDER PASSED BY: SHAHID MASOOD MANZAR, JUDICIAL MEMBER:---.--- Through this appeal the appellant has assailed the Order of Commissioner Inland Revenue, (Appeals-III), Rawalpindi dated 31-05-2016 whereby, the learned first appellate authority upheld the tax charged under section 161 in respect of payments made by appellant on account of supply of goods and services and remanded the case to the DCIR on the point of levy of tax in respect of payments made on account of salary. 2. Facts of the case, briefly stated, are that the Revenue Officials visited the premises of the Trust and offered assistance and guidance in the management of withholding taxes. For this purpose, they obtained record of payments made by the appellant on account of purchase of goods, services and salaries for scrutiny and examination and aggregated the amounts paid on account of services, purchase of goods and salaries. Tax withheld and deposited under these heads was found inadequate. Consequently, proceedings under section 161 of the Income Tax Ordinance, 2001 were initiated and the Trust was treated as a taxpayer in default in respect of payments made under the above listed heads and burdened with the tax liability of Rs. 23,262,682 with the following break-up:- Short deduction of tax from payments made for services 2,939,728 Short deduction of tax from payments made on account of goods 14,981,979 Short deduction of tax from payments of salaries 5,340,975 23,262,682 3. Being aggrieved, the appellant filed appeal before the learned OR (Appeals-III), Rawalpindi who vide his impugned Order set-aside the levy of tax on payments made for salaries whereas tax under the remaining two heads, DCIR was upheld. Still feeling dissatisfied, the appellant has come up in further appeal before us contesting the treatment accorded by both the forums below. 4. Mr. Tahir Razzaque Khan, FCA appeared on behalf of appellant whereas the Revenue was represented by the Departmental Representative Mr. Ali Muhammad Khan. 5. AR of the appellant vehemently objected to the Orders passed by both the authorities below and termed them as classic examples of professional inefficiency and incompetence. He explained…

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