Law: Income Tax Ordinance, 2001,

Section: 120,122,122(5A),170,170(3),Part VI of First Schedule

Income Tax Ordinance (XLIX of 2001)---

----Ss. 170,120 & 122---Income Tax Rules, 2002, R. 71 ---Self-assessment scheme--Self-adjustment of refund---Scope---Application to claim refunds, non-submitting of---Effect---Taxpayer/ company itself claimed refund adjustment against tax liability instead of paying amount of admitted liability for the relevant year under self-assessment scheme---Officer Inland Revenue ('OIR') passed amended assessment order holding said amount recoverable from the taxpayer declaring the self-adjustment of refund illegal having been done by the taxpayer without determination of overpaid tax by the Commissioner---Taxpayer/company filed appeal before the Appellate Tribunal Inland Revenue ('the Tribunal') as the amended assessment order was confirmed by the Commissioner (Appeals)--Validity---Appellant (taxpayer/company) admittedly did not file any refund application under S. 170 for determination of his claim by the Commissioner under S. 170 of the Income Tax Ordinance, 2001 ('the Ordinance, 2001') while said provisions stipulated that a taxpayer who had paid tax in excess of the amount might apply to the Commissioner for refund of excess amount paid---According to the R.71 of Income Tax Rules, 2002 ('the Rules, 2002') such application would be made in the pro forma specified in Part VI of First Schedule of the Rules, 2002--Thus, the whole mechanism given in the S.170 of the Ordinance, 2001 had not provided /allowed self-adjustment of refund by the taxpayers on their own against their tax liabilities---Without determination / approval, no refund could be adjusted by the taxpayers on their own---Declared version of the refund could only be varied through an amendment under S. 122 of the Ordinance, 2001 while disposing of refund application---Appellant (taxpayer/company) had illegally adjusted the claimed refund against its tax liability without properly filing application for refund and without any determination by the Commissioner, hence OIR had rightly noted the tax return as erroneous and prejudicial to the interest of revenue as admitted tax liability against declared income remained unpaid---Appellate Tribunal Inland Revenue maintained the impugned order passed by the Commissioner (Appeals) who had committed no illegality in confirming the amended assessment order--Appeal filed by the taxpayer/company was dismissed, in circumstances.