Law: Income Tax Ordinance, 2001

Section: 161,205,221

(a) Income Tax Ordinance (XLIX of 2001)--Ss. 161, 205 & 221-Failure to pay tax, collected or deducted- Inland Revenue Officer, initiated proceeding and passed order under Ss.161 & 205 of the Income Tax Ordinance, 2001 to recover tax shortly deducted by the taxpayer, along with additional tax/default surcharge- Commissioner Inland Revenue (Appeals) confirmed default surcharge/ additional tax-Validity-Only wilful default, and that too on establishment of 'mens rea' would lead to charge of the default surcharge-Non-payment of income tax over a long period of time by the taxpayer, proved the guilty mind and mens rea on part of the taxpayer-Taxpayer withheld the amount of tax for a long time intentionally and also committed wilful default-Action of Officer levying default surcharge, was confirmed on that score-Default surcharge being additional tax to be levied, charged and collected on the default amount for the period, during which it remained unpaid from the due date was not doubly taxation on same receipt/income/ payment-By not paying the tax collected, government money was utilized in an unauthorized manner and the cost of such utilization, had to be compensated in that way-Taxpayer was an assessee/taxpayer in default, order passed by Commissioner Inland Revenue (Appeals), being fair, did not call for any interference.2003 PTD (Trib.) 346 and 1973 PTD 446 ref.2010 PTD (Trib.) 1081 rel.(b) Income Tax Ordinance (XLIX of 2001)--Ss. 161 & 205-Failure to pay tax collected or deducted-Levy of default surcharge and additional tax-Scope and nature-Default surcharge, was levied because taxpayer utilized Government money and took its benefit, or the Government was deprived of that utility /profits- If the tax was admitted due and not paid on due date, that would amount to utilization of Public Exchequer-Compulsion of payment of default surcharge (additional tax) was quite in accordance with equity and natural justice-Taxpayer could not be absolved of payment of default surcharge qua late payment of admitted liability of tax on the plea of not being wilful-Imposing the default surcharge as a sanction for the speedy collection of revenue, was different from the…