Law: Income Tax Ordinance, 1979

Section: 2,2(29),12,12(5),50,50(3A),50(4),52,80,8 0AA,Cl.(77A) ofPartI of Second Schedule

(a) Income Tax Ordinance (XXXI of 1979)----S.50(3-A)---Deduction of tax at source---Convention for avoidance of double texation---Exemption---Assessee claimed exemption, from deduction of tax from payment to non-resident on account of technical services, under double tax treaty---Validity---Exemption under double tax treaty could not be considered as under the provision of S.50(3-A) of the Income Tax Ordinance, 1979 Assessing Officer was authorised to, issue a certificate in this regard and no such claim had been made by the assessee at any stage before the Tribunal. (b) Income Tax Ordinance (XXXI 1979)--- ----Second Sched., Part I, Cl. 77-A, Ss.2(29), 50 & 52---Exemption--­Interest--Liability of person failing to deduct or pay tax---Deduction of tax at source---Fee for technical services---Tax under S.52 of the Income Tax Ordinance, 1979 was levied as the assessee had not made deductions on payments in respect of technical services ---Assessee pleaded that payments were in the nature of interest as defined under S.2(29) of the Income-tax Ordinance, 1979 which was exempt from tax under Cl. (77-A) of Part I of Second Sched. of the Income Tax Ordinance, 1979 and thus, not liable to deduction of tax---Validity---"Interest" as defined in S.2(29) of the Income Tax Ordinance, 1979 included any service; fee or other charge in respect of any credit facility which had not been .utilised which did not mean that all types of charges in respect of credit facility, whether utilised or not, could be included in the definition of interest---Claim of exemption under cl. (77A) of Part I of the Second Sched. of Income Tax Ordinance, 1979 was rejected by the Appellate Tribunal in circumstances. Law Lexicon Dictionary, 1997 Edn. and 1995 PTD 877 ref. 1994 PTD 174 = 1994 SCMR 229 and 1990 PTD (Trib-.) 925 distinguished. (c) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 52, 50(3-A), 12(5) & 80-AA---Liability of person failing to deduct or pay tax---Payment to non-resident professionals/consultants---Nature of payment---Determination of---Agreement in respect of services---Non­availability of such agreement on record---Effect---Due to non-tiling of agreement between the…

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