Law: Income Tax Ordinance, 2001

Section: 2(41),107,101(3),109,129,152,152(5),152( 7),152(7)(ii),152(7)(a)(iii),161,161(1), 163,205

Law: Income Tax Ordinance, 1979

Section: 163

INCOME TAX ORDINANCE, 2001 (XLIX OF 2001)----Sections: 2(41), 107, 101(3), 109, 152, 152(5), 152(7), 152(7)(ii), 161, 161(1), 163 & 205 - Double Taxation Treaty - Art. 7, 7(1), 7(1)(a), 7(1)(b) & 7(1)(C) - Income Tax Ordinance, 1979, Section: 163 - Definitions -Geographical source of income - Agreements for the avoidance of double taxation and prevention of fiscal evasion - Recharacterisation of income and deductions - Payments to non-residents - Failure to pay tax collected of deducted - Default surcharge - Levy of tax together with default surcharge and penalty - CIR(A), held that contracts have been bifurcated for the purpose of avoidance of tax on payment made to HC for purpose of machinery - Validity - Appeal before Tribunal - FACTS Brief facts of the case, as transpired from the record, are that the appellant was incorporated as a private limited company. The Deputy Commissioner observed that the appellant being a withholding agent was liable to withhold tax under the provisions of the Income Tax Ordinance, 2001, the tax so deducted was required to be deposited with the government exchequer but the appellant had failed to do so. Show-cause notice was issued and served upon the appellant the Deputy Commissioner passed the order dated 20 December 2018 under section 161(1) of the Ordinance by treating the appellant as an assessee in default on certain payments made without deduction of tax. The major amount relates to the payment of Rs.2,713,840,526 made by the appellant for purchase (import) of plant and machinery from Hydrochina Corporation (HC) on which no tax was deducted on the premise that the title of such goods was transferred outside Pakistan and hence there was no requirement to even obtain an exemption certificate under section 152(5) read with section 152(7). It was concluded by the DCIR that since the aforesaid deduction of tax was not made by the appellant, hence it was liable to be treated as an assessee-in-default for non-deduction of tax. He has further observed that both the contracts are in the nature of Engineering, Procurement and Construction (EPC) and have been bifurcated for supply of machinery and installation thereof only for the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492