The above tided appeals have been filed by the taxpayer against consolidated Order Nos,569, 570 and 571/2014 dated 24.3,2014 passed by the learned Commissioner Inland Revenue (Appeals-III), Islamabad for tax years 2010 to 2012. The taxpayer contested the appeals on the following common grounds:-
(i) That reduced rate of 1% was applicable in the case of appellant in terms of clause (24A) Part 2 of Second Schedule to the Income Tax Ordinance, 2001 whereas the department charged the same @ 3.5%.
(ii) That the appellant has taken plea that he is falling in the ambit of Distributor as explained in Black's Law Dictionary 8th Edition at page 509.
(iii) That the assessing officer as well as learned CIR(Appeals) has without giving any case law or cogent reasons rejected the claim of appellant which is unjustified, unwarranted and uncalled for.
2. Brief facts of the case are that the taxpayer is a manufacturer and distributor of Pharmaceuticals. Return for the Tax Years 2010 and 2011 were filed claiming refund amounting to Rs,393,195/- and Rs,11,92,896/- for the Tax Years 2010 and 2011 respectively. The refund was claimed on the basis of tax reduction under clause (24A) of Part-II of 2nd Schedule to 'the Income Tax Ordinance, 2001. This claim of taxpayer was not accepted by the Officer Inland Revenue in the order passed under section 170(4) of the Ordinance. Aggrieved of this treatment, the taxpayer filed appeal before learned Appeal Commissioner who vide order dated 24.03.2014 also confirmed the order passed by the Officer Inland Revenue on the issue.
3. The above mentioned appeal of the taxpayer for the tax years 2010 and 2011 w ere basically decided by this Tribunal vide order dated 16.10.2014 whereby the same were rejected. The case has been remanded back to this Tribunal for de novo decision by the Islamabad High Court, Islamabad on the tax reference filed by the taxpayer under section 133 of the Ordinance, 2001 vide its judgment dated 18.06.2015. The relevant part of the observations of Honorable Islamabad High Court given in last part of para 4 on page 3 of its judgment dated: 18-06-2015 are reproduced as hereunder:- "The learned Tribunal had to make a determination in the light of clause 24A of Part-II of the 2nd Schedule of the Ordinance read with Section 153 ibid. The learned Tribunal for the purposes of section 153(1)(a) had to determine as to who was the "prescribed person" making a payment for the sale of goods. The learned Tribunal unambiguously acknowledged the applicant as a Distributor besides being a Manufacturer. After determining the status of the applicant as a "Distributor" the learned Tribunal was required to make a further determination i,e, whether the applicant was entitled to the reduced rate under clause 24A of Part-II of the 2nd Schedule read with section 153 of the Ordinance. It is evident from the order passed by the learned Tribunal dated 16-10-2014, that though the status of the applicant has been accepted as a manufacturer cum distributor but there has been no determination whether in the context of section 153 of the Ordinance it was to be treated as a manufacturer or a distributor. In other words it had to be determined whether the transactions related to the status of the applicant as a manufacturer or a distributor".
4. On the date of hearing Mr. Atif Waheed, Advocate, learned AR appeared on the behalf of the appellant/taxpayer whereas Mr. Waqas Hanif learned D.R. defended the Department.
5. During the course of hearing learned AR has vehemently contended that the taxpayer is entitled to the reduced rate under Clause 24A of Part-II of the 2nd Schedule in respect of sales falls under the ambit of withholding tax under the provisions of section 153 of the Ordinance, in respect of the goods sold as a distributor. According to