Law: Income Tax Ordinance, 1979

Section: 50(7-E),66A,80D,59(1),54,65,54(3)

Income Tax Ordinance (XXXI of 1979)--- ---Ss.66-A, 80-D, 50(7-E), 59(1) & 54---Powers of Inspecting Additional Commissioner to revise, Deputy Commissioner's order---Minimum tax on income of certain persons---Deduction at source---Assessment under Self­ Assessment Scheme---Cancellation of assessment---Minimum tax, payable under S.80-D, deducted under S.50(7-E) of Income Tax Ordinance, 1979 was shown by the assessee in the balance sheet and credit of such amount of tax was also claimed which was allowed by the Assessing Officer while completing assessment under S.59(I), Income Tax Ordinance, 1979--­Inspecting Additional Commissioner cancelled the assessment on the ground that claim of minimum tax was inadmissible as such assessment order was erroneous and acceptance of claim caused prejudice to the interest of revenue---Contention of the assessee was that assessment being merely erroneous, could be no ground for cancellation of assessment unless same was prejudicial to the interest of revenue, while the tax paid under S.80-D, Income Tax Ordinance, 1979 was much more than the amount the Department wanted to calculate by addition of tax-deducted at source in the income---Department contended that deduction of tax under S.50(7-E), Income Tax Ordinance, 1979 was erroneously allowed and the same had caused damage to the interest of revenue---Validity---By allowing an inadmissible expenditure an error had been committed which had not caused any prejudice to the interest of revenue---If addition of such inadmissible expense was made in the total income, the tax payable thereon remained below the amount of tax-paid under S.80-D, Income Tax Ordinance, 1979, which was mandatory payment for finalization of an assessment under S.59(() of .the Income Tax Ordinance, 1979---No prejudice having been caused to the interest of revenue,. order of the Inspecting Additional Commissioner was declared to be without legal justification which was cancelled. PLD 1992 SC 549 = 1992 PTD 932 rel. ORDER KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER).---Cancellation of order under section 6.6-A is challenged by the assessee. The error found by the department that caused prejudice to the interest…

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