Law: Income Tax Ordinance, 1979

Section: 50,50(3),52,Second ScheduleClause62,126,128

(a) Income Tax Ordinance (XXXI of 1979)----Ss. 52, 50(3), Proviso-II, & 12(2)---Finance Act (I of 1995), Preamble---Agreement for avoidance of double taxation---Liability of persons failing to deduct or pay tax---Assessee, a Bank had made payment to company, a non-resident company and payment was remitted directly to Regional Office of the said company at Singapore---Said company did not realize any receipt in Pakistan from the assessee---Assessing Officer observed that newly-added proviso to S.50(3) of the Income Tax Ordinance, 1979 was neither applicable nor attracted in the case of assessee and assessee-Bank was liable to make tax deduction under S. 50(3) of the Income Tax Ordinance, 1979---Assessing Officer charged the tax at the rate of 30% holding the assessee as "assessee-in-default" under S.52 of the Income Tax Ordinance, 1979---Assessee contended that prior to 1995 withholding tax was required to be deducted under S.50(3) of the Income Tax Ordinance, 1979 even if a foreign company established a branch office in Pakistan---Company used to regularly obtain reduced withholding tax service and deducted tax in accordance with rates mentioned in the certificate---After addition of Proviso II to S.50(3) of the Income Tax Ordinance, 1979, through Finance Act, 1995 the assessee stopped deducting said tax---Validity---As a result of amendment in second proviso to subsection (3) of S.50 of the Income Tax Ordinance, 1979 the exemption from withholding tax under the said subsection in respect of branches of non-resident companies would be available in case payment was made to a branch in Pakistan of a non-resident company whereas in the present case the payments had been remitted at Singapore and not to a branch in Pakistan---Assessee failed to deduct tax while making payment to a non-resident outside Pakistan as required under S.50(3) of the Income Tax Ordinance, 1979---Order treating assesses in default, in circumstances, did not warrant interference. (b) Income Tax Ordinance (XXXI of 1979)--- ---S. 50(3), proviso-II---Deduction of tax at source--Any person responsible for paying to non-resident any sum chargeable under the provisions of Income Tax Ordinance,…

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