Law: Income Tax Ordinance, 1979

Section: 52,86,50

Income Tax Ordinance (XXXI of 1979)-----Ss. 52 & 86---Liability of persons failing to deduct or pay tax---Tax levied in respect of purchases, which were considered to be taxable under S. 52 of the Income Tax Ordinance, 1979, ignoring that such purchases were less than Rs. 25,000 from each party was deleted by the First Appellate Authority---Department pleaded that assessee had not filed the details or were not verifiable---Validity---Department was unable to point out any such provision of law under which the Assessing Officer could demand such information from the assessee---Assessing Officer had not pointed out any single instance where the payment to one party had been made in excess of Rs.25,000---Assessing Officer thus proceeded on presumptions and surmises---Provision of S.50 read with S.52 and other related sections such as 139, 140 and 142 etc. of the Income Tax Ordinance, 1979 were harsh and extraordinary burden on taxpayers or on any person who was not earning income on which the tax was being charged under these provisions:--Various specified persons had been entrusted with task to deduct tax at the time of making payment and then deposit the same into the Government treasury alongwith specific information and then file specified statements with the Revenue Officers---No benefit accrued to person collecting the tax, he was burdened with various liabilities---If he failed to deduct tax or if tax was not deposited, he himself became liable to pay such tax and also suffer additional tax and penalties for non-deduction or non deposit of tax or non-filing of various statements---Department had to proceed strictly in accordance with law before levying burden on the person who may or who may not have been required to deduct or who may or who may not have defaulted in such duties---Department could not proceed on surmises and presumptions to levy -such taxes or penalties---Clear provisions were to be .made to empower an officer as to how he was to know whether somebody had male any such payment which attracts the provisions of S.50 or S.52 of the Income Tax Ordinance, 1979--¬Department could use the information obtained by it from the assessee in the…

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