Law: Income Tax Ordinance, 1979

Section: 143,80C(2)(a)(i),143B

Income Tax Ordinance (XXXI of 1979)---Ss. 80C(2)(a)(i) & 143-B---Tax on income of certain contractors and importers-Software engineering services---Assessment was framed in a manner that receipts claimed to be covered under the normal tax regime were taken as chargeable under presumptive tax regime under S.80C of the Income Tax Ordinance, 1979 and created tax demand @ 5% on local sales---Assessee's contention that receipts were as a result of software engineering services which did not fall in the presumptive tax regime but were liable to be charged under normal tax regime but such contention was turned down by urging that providing software services were other than the payments on account of services rendered---First Appellate Authority directed to charge tax on local receipts under normal law by excluding it from presumptive tax regime---Validity---Provisions of law exactly supported the contentions of assessee that the services rendered in software engineering was not covered within the presumptive tax regime as such services were other than specified therein---Other factors also proved that the treatment accorded by the department being inconsistent with exactly identical business in which the department had itself made the taxability under normal tax regime for exactly similar nature of receipts---Department had itself issued exemption certificate, exempting the assessee from tax deduction, the payments made to the assessee as recipient, thus accepted the taxability under normal tax regime---Order of First Appellate Authority was upheld by the Appellate Tribunal and departmental appeal being devoid of merit, was dismissed. (2005) 91 Tax 263 ref. Systems (Pvt.) Ltd. (NTN 07-054707331); 2005 PTD (Trib.) 668 and ITAT's Order, dated 7.1-2006 in I.T.A. No. 6875/LB of 2004 rel. ORDER EHSAN-UR-REHMAN, (JUDICIAL MEMBER).---This depart-mental appeal is directed against first appellate order, dated 29-3-2006 recorded by the learned CIT/WT, Appeals Zone-IV, Lahore pertaining to the assessment year 2002-2003. 2. Relevant facts in brief are that income tax return for income chargeable under the normal tax regime and the prescribed statement under section 143-B for…

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