ORDER The captioned appeals have been filed at the behest of assessee to assail two separate orders both dated M/s. Anayat Limited V. ICA Penal - 3 Special Zone C.L. 1105 (Ehsan-ur-Rehman, Judicial Member) 3.6.2002 2005 relating to the assessment years 1996-97 and 1997-98. The common ground taken by assessee in both the years is that the learned CIT(A) has not considered the amendment made in section 50(4) through Finance Act of 1998 in which proviso and explanations in section 50(4) was added as the above amendment was effective from assessment year 1999-2000 while the tax has been charged u/s 52/86 for the years 1996-97 and 1997-98.
2. Brief facts giving rise to the present appeals are that the assessee, a private limited company, derives income from textile. The assessee was under legal obligation to deduct tax u/s. 50(4) of the repealed Income Tax Ordinance, 1979 on payments made during the years under consideration.
Since the tax was not deducted u/s. 50(4) the assessing officer raised demands u/s. 52/86 amounting to Rs. 6,746,003 and Rs. 2,979,686 respectively for the years 1996-97 and 1997-98. The assessee feeling dis-satisfied with the other passed by the assessing officer went in appeal before the learned first appellate authority who remanded the case to the assessing officer with the direction to provide the assessee another opportunity to the appellant of being heard.
3. The learned AR on behalf of the assessee- appellant agitated the action of the authorities below and in support of his ground of appeal the learned AR referred to a reported decision cited as 2004 PTD 921 in which it has been held by the learned Sindh High Court that the explanation added to section 50(4) of the Income Tax Ordinance, 1979 by virtue of Finance Act of 1998 cannot be applied retrospectively. On the other hand, the learned DR on behalf of the Revenue defended the order of the CIT(A).
4. We have heard both the AR on behalf of the assessee as well as the DR on behalf of the Revenue.
We have also, perused the orders of the authorities below. There is lot of force in the arguments of the learned AR and we are also in respectful agreement with the judgment cited by the AR in support of his arguments which is on all fours with the case of the assessee-appellant. in view of this situation, we, therefore, delete the tax levied by the assessing 'officer under section 52/86 of the repealed Income Tax Ordinance, 1979 in both the years under consideration. Consequently the appeals filed by the assessee are accepted.