Law: Income Tax Ordinance, 2001

Section: 129,133,156A,156A(2),170

Law: Constitution of Pakistan, 1973

Section: 247(3)

INCOME TAX ORDINANCE, 2001 (XLIX OF 2001)---Sections 156A & 170---Refund claim of Petrol pumps situated in FATA, of tax deducted under Section 156A, was rightly rejected as income derived from commission, actual sales and payment as well as deduction of tax was within Pakistan and outside FATA.-- It is not disputed that the enforcement of the Income Tax Ordinance, 2001 (�Ordinance of 2001�) was not extended to the territorial limits of FATA* and, therefore, its provisions were not attracted to the income arising therein. It is also not disputed that the respondents are operating petrol pumps in FATA. Section 156A of the Ordinance of 2001 provides that every person selling petroleum products to a petrol pump operator shall deduct tax from the amount of commission or discount allowed to the operator at the rates specified in Division VIA of Part III of the First Schedule. The tax deductable under sub section 1 shall be a final tax on the income arising from the sale of petroleum products. The deduction of tax fell under the final tax regime. Admittedly, the contractual arrangement for the sale of petroleum products, the actual sale and payment as well as deduction of the tax had taken effect in the areas of Pakistan outside the territorial limits of FATA and, therefore, the transactions and the income arising from such sale were not immune from the enforcement of the provisions of the Ordinance of 2001. The income derived by the respondents was on account of commission paid to them by the seller companies outside FATA. The contractual arrangement between the companies selling the petroleum products to the respondents was not properly disclosed by the respondents. Nonetheless, the claim of refund of the tax deducted under section 156A of the Ordinance of 2001 was not tenable and, therefore, rightly rejected. Immunity from payment of taxation shall not be claimed merely on the basis that the business premises have been established in FATA, rather the onus was on taxpayer to establish the fact that taxable income was not being derived from areas where statute was enforced and applicable. ORDER: MR. JUSTICE ATHAR MINALLAH:---.--- The Chief…

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