Law: Income Tax Ordinance, 2001

Section: 21(c),32,120,122(1),124,161,169,177

Amendment of assessments - Trust - Filing of return declaring income - Show Cause Notice - Disallowance of salary and rent paid to CAA - Add back of unrealized exchange gain and credit of tax paid - Remand of case - Assessing officer recorded that the tax payer failed to provide any documentary evidence - Assessing officer however, allowed credit with the observation that taxpayer provided complete detail for tax deducted - Action taken by assessing officer upheld by CIR(A) - Validity - FACTS Briefly stated facts leading to the instant case as transpired from impugned order are that appellant Shaheen Foundation a trust, established under charitable endowment Act 1890, and registered with Government of Pakistan, Ministry of Health, Welfare and Population Planning. Return for tax year under appeal was filed declaring income of Rs. 175,508,908 which was deemed assessment u/s 120 of the Income Tax Ordinance, 2001 and was further amended u/s 122(1) by creating demand of Rs.51,273,18. The taxpayer filed appeal before Commissioner IR(A) who set aside the proceedings for de novo consideration as under: a) Disallowances of salaries u/s 21(c) amounting to Rs. 10,427,236 b) Disallowances of rent paid to CAA u/s 21(c) amounting to Rs.32,399,385 c) Add back of unrealized exchange gain amounting to Rs.20,769,728ƒ d) Credit of tax paid/deducted at source amounting to Rs. 114,250,427 Complying with the aforementioned directions by learned CIR(A) the appeal effect u/s 124 of the ITO 2001 was given by the department as under: Income Rs. 175.508.908 Additions i Taxable salaries paid to Shaheen Air Port Services u/s 21(c) of the ITO 2001 which tax has not been deducted. 6,130,776 Salaries paid to other project u/s 21(c) which tax not been deducted 4,296,460 Total addition 10,427,236 Total income 185,936,144 Tax @ 35% 65,077,650 Tax already paid/deducted 114,250,457 Balance tax refundable 49,172,777 The appellant could not put forth any solid reason or documentary evidence with regards to its grounds No. 2 to 5. Therefore the action taken by the assessing officer in the impugned order is upheld and the appeal fails being devoid of any merit. The case was fixed for hearing and on…

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