Law: Income Tax Ordinance, 2001

Section: 115,115(4),153,153(6),153(1)(c)

Income Tax Ordinance (XLIX of 2001)----Ss. 153(1)(c), 153(6) & 115(4)---C.B.R. Circular No.1 of 2005, dated 5-7-2005---C.B.R. Circular No.11 of 1991, dated 30-6-1991---Payments for goods and services---Persons not required to furnish a return of income---Carriage contractors---Assessee instead of filing statement filed returns claiming refund---Assessing Officer observed that deduction of tax on payments in case of carriage contractors was the full and final discharge of tax liability and claim of refund could not be entertained---First Appellate Authority directed the Assessing Officer to give effect to the tax deduction as in accordance with C.B.R. Circular No.1 of 2005, dated 5-7-2005 withholding tax on all types of services was adjustable and directed to issue refund as claimed---Validity---While accepting appeal of the assessee, First Appellate Authority had fully justified his action---Appellate Tribunal endorsed his view that Assessing Officer was quite unjustified while rejecting the claim of refund by treating the tax deducted as full and final discharge of tax liability---First Appellate Authority had rightly given a judicious direction, which did not warrant any interference---Departmental appeals were dismissed by the Appellate Tribunal being devoid of legal substance. (2005) 91 Tax 263 (Trib.) ref. 2004 PTD 2749 rel. ORDER The instant departmental appeals pertaining to assessment years 2003 and 2004 have been filed against the consolidated impugned order, dated 30-11-2005 recorded by CIT(A) Multan, whereby the following common issue has been raised as per memo. of appeals for adjudication: "That the CIT(A) was not justified to bring carriage contractors in the ambit of services as Income Tax Ordinance, 2001 is silent about the definition of carriage contractors." Brief facts of the case are that assessee instead of filing statement under section 115(4) of the Income Tax Ordinance, 2001 filed returns for disclosing net income at Rs.738,000 claiming refund of Rs.62,456 each for the assessment years 2003 and 2004. The Assessing Officer observed that since, deduction of tax on payments in case of carriage contractors is the full and final discharge…

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