Law: Income Tax Ordinance, 2001

Section: 131,128(5),161,205,236-G,236-11

Income Tax Ordinance (XLIX of 2001)----Ss. 131, 128(5), 161, 205, 236-G 236-11--Advance tax, deduction of--Default--Scope--Notices, issuance of--No reply of taxpayer-- Assumption--Powers of the Commissioner (Appeals) to exam evidence--Scope--Assessment order was passed by the Officer Inland Revenue after the taxpayer allegedly failed to make any compliance of the notices under Ss.161 205 of the Income Tax Ordinance, 2001 (‘the ITO, 2001’), issued by the Department--Assessment order was assailed before Commissioner (Appeals) contending that the taxpayer being a sugar mill did not make any sales to the retailers, rather the entire sales were made to dealers, wholesalers, distributors, Trading Corporation of Pakistan and registered dealers--Commissioner (Appeals) accepted the appeal of taxpayer (sugar mill) on the ground that the Officer Inland Revenue had bifurcated , on his own , the sales between retailers and wholesalers just w charge tax in terms of Ss. 236-G 236-11 of the ITO, 2001--Department preferred appeal against the order passed by the Commissioner (Appeals) contending that he was not justified to rely on evidence which was not provided to the Officer Inland Revenue at the adjudication stage--Validity--No information, reason or material on record had been mentioned in the order-in-original in determining the bifurcation of sales allegedly having been made to retailers and wholesalers/distributors--Instead, only after not receiving any reply /details from the taxpayer in response to notices, the Officer Inland Revenue observed that default of non-deduction of advance tux under Ss. 236-G 236-11 of the ITO, 2001, stood established--Though every taxpayer was required to co-operate with the Department by ensuring the compliance, however, the Assessing Officer could not be allowed to pass orders merely_ on assumptions--Taxpayer / respondent was admittedly a sugar mill which in ordinary course of business, did not sell sugar directly to retailers, rather used to make supplies to distributors/wholesalers etc.-- bifurcating total sales between retailers and wholesalers just for the purpose of charging large amount of tax was a clear reflection of arbitrariness…

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