Law:

Section:

Income Tax Ordinance (XLIX of 2001)--- ----S. 205(1B)---Additional tax---Time period for calculating additional tax---Reduction of additional tax---Short payment of advance tax was admitted---Advance tax was chargeable from 1-4-2007---Date of assessment i.e. 30-9-2008 was also undisputed---Only contentious issue was the closing date for calculation of additional tax liability---Taxpayer's assertion was that the "30th day of June of the financial year next following" was 30-6-2007 whereas the department contended that it was 30-6-2008---Additional tax was leviable from 1st April to the date of assessment of relevant tax year or the 30th June of the financial year next following---Financial year of the taxpayer company started from 1-10-2006 to 30-9-2007 and the assessment of the said year was to be made on 30-9-2008 on which the return had to be filed---Taxation Officer was legally correct in calculating the period of default from 1-4-2007 to 30-6-2008 and to levy the additional tax---First Appellate Authority had wrongly reduced the period of default from 1-4-2007 to 30-6-2007 and its order was not sustainable in the eyes of law---Order of First Appellate Authority was vacated and that of the Taxation Officer was restored by the Appellate Tribunal. ORDER This appeal preferred by the department has assailed the order of learned CIT(A) Zone-I, Lahore recorded on 10-9-2009. The only grievance of the department is against the reduction of additional tax levied under section 205(1B) from Rs.3,25,768 to Rs.64,868. Facts giving rise to the instant appeal are that the respondent company deriving income from manufacturing and sale of sugar filed return admitting tax liability at Rs.2,11,89,704 but paid/deducted tax under section 147 during the year at Rs.1,69,02,511. On perusal of return the Taxation Officer found the tax deducted under section 147 lesser than 90% of the admitted liability which according to him, comes to Rs.1,90,70,734. A show-cause notice was issued and considering the reply furnished by the taxpayer as unsatisfactory, additional tax under section 205(1B) was levied @ 12% for the period of default from 4-1-2007 to 30-6-2008 (i.e. 457 days) amounting…

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