Law: Income Tax Ordinance, 1979

Section: 52A,52,50(2A),56,138,SecondSched.,PartI, Cl.(86)

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 9

Income Tax Ordinance (XXXI of 1979)].....Ss.52 A, 52, 50(2A), 56, 138 & Second Sched., Part I, Cl. (86) -Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.9 S.R.O. 594(I)/91, dated 30 6 1991 C. B. R. Letter C. No. (37)/WHT/91, dated 2 6 2002 Recovery from the person from whom tax was not deducted or collected Assesses; in default -Exemption Deduction of tax at source Exemption certificate was issued by the Commissioner of Income tax in terms of S.R.O. 594(I)/91 dated 30 6 1991 to assessee/Board of Intermediate and Secondary Education Assessee's tax was not deducted by the National Saving Centre on profits paid on its deposits on the basis of such exemption certificate Subsequently, exemption certificate was withdrawn by the Commissioner of Income tax and Assessing Officer was directed to recover the tax that was deductible under S.50(2A) of the Income Tax Ordinance, 1979 Validity Maladministration was evident on several counts, firstly it was advisable for the Central Board of Revenue to follow the ratio of the decision of the apex Court in Central Insurance Co. and others v. C.B.R. 1993 SCC 1049 and to abstain from issuing directives based on their interpretation ,of law; secondly, the Commissioner of Income tax had no authority under law to withdraw the certificate issued in pursuance of S.R.O. 594(I)/91, dated 30 6 1991 retrospectively and it amounted to gross injustice to the payer Issuance of a certificate by the Commissioner of Income tax that any provision of S.50 of the Income Tax Ordinance, 1979 was inapplicable to the payee did not amount to grant of exemption from tax to the income from such receipts During the course of assessment proceedings it was the exclusive discretion of the Assessing Officer to decide whether receipts from a particular source was exempt or not Neither the payer nor the payee had committed any default under S.50(2A) of the Income Tax Ordinance, 1979 because payments had been made without deduction of tax on the authority of the Commissioner of Income tax who certified that no tax was deductible Either no action had been taken under S.52 of the Income Tax Ordinance, 1979 against the National…

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