1. CH. ANWAAR UL HAQ (JUDICIAL MEMBER).---The titled appeal pertaining to tax year 2009, has been preferred at the instance of taxpayer, calling in question the impugned Order No, 17 dated 17- 5-2012, passed by the learned CIR(A), Lahore on the following grounds:-- That the CIR(A) is not justified to maintain the charge of tax on 448,141 under section 161 on the stationery/office supplies out of total payment of Rs,662,491, detail of which is place on file which indicates that all the payments are below Rs,25, 000.
2. That the appellant has deducted tax from all the payments exceeding Rs,25,000 against the purchase of goods/expenses and Deputy Commissioner is not justified to charge the tax on the estimated basis. That the learned assessing officer is not justified to charge the tax under section 161 without establishing that the appellant has made payment exceeding Rs,25,000 for the purchase of goods/expenses.
3. At the time of hearing it was pointed out by the Court Clerk that an applicant for adjournment has been received in the office of Assistant Registrar on 4-3-2014, signed by one M. Imran Latif, Advocate on behalf of Nazir Chaudhri and Co. Chartered Accountants stating that Mr. Nazir Ahmed Company is pre-engaged in official assignment at Karachi. Perusal of power of attorney reveals that the same has been executed in favour of by following three persons:-- (i)Mr. Nazir Ahmad Ch., FCA (ii)Mr. Asim Nazir, FCA (iii)Mr. M. Imran Latif, Advocate Rule 27 of the Appellate Tribunal Rules, 2010 provides that the Tribunal may, if sufficient cause is shown, adjourn the hearing of appeal or application on a request being made by the party or authorized representative and no request for adjournment sent through post or fax may be entertained. Since no one on behalf of the appellant was appeared at the time of hearing. Hence the application seeking adjournment is refused and I proceed the case ex parte on merits.
4. Brief facts of the case are that appellant a Private Limited Company deriving income from manufacturing and sale of PCC Poles was a prescribed withholding agent for deduction/collection of the tax on the payments made under various heads during the period under consideration on which tax was required to be deducted in terms of provisions of Division-III of Part-V of Chapter-X and XII of the Income Tax Ordinance, 2001. In order to verify the compliance level made to the provisions of law, the Deputy Commissioner Inland Revenue issued notice under sections 161/205 to the appellant. In response thereto, reply was filed which was considered partially satisfactory as the taxpayer had not deducted tax properly on certain heads of payments. Treating the appellant in default, the DCIR finalized the order and charged tax under section 161 along with default surcharge under section 205 of the Income Tax Ordinances, 2001. It was the contention of the AR before the learned CIR (A) that the DCIR passed the impugned order in haste, arbitrary and whimsical manner and was not justified in charging tax on 'payments made under the head "stationery/office supplies" without particularly pointing the payments made which were liable to tax deduction and failed to cite any single instance, or identify the parties to whom the appellant has been treated as in default of withholding tax. Reliance was laced upon case-laws cited as and 2001 PTD (Trib.) 2605 and 2004 PTD (Trib.) 1293.
5. Perusal of impugned order reveals that the appellant filed the relevant record/details before the assessing officer. But not a single transaction was pointed out by the assessing officer which attracts the section 161. On contrary, the assessing officer has charged tax @ 3.5% amounting to Rs,23,187 on the gross amount of Rs,662,491 claimed expense under the head Stationery/Office Supplies. Since the assessing officer has failed to point out any specific amount of transaction on which tax was required and not deducted, therefore, there is no justification in charging tax under section 161.
6. Under the circumstances I allow the titled appeal filed by the taxpayer and vacate the orders of both the authorities below.