FINDINGS /DECISION The complainant a Private Limited Company derives income from manufacturing and exports of Ready made Garments. The company is an existing income-tax assessee of Circle-01, Companies Zone-1, Karachi on National Tax Number 14-01-3314598.
2. The Complainant has challenged the levy of workers welfare fund relating to the assessment years 1997-98 and 1998-99. The facts of the case are briefly stated as under:--
3. The complainant company filed statements under section 143-B of the repealed Income Tax Ordinance, 1979 for the assessm ent years, 1997-98 and 1998-99 and the assessments were completed under section 59-A of the repealed Ordinance. Thereafter the Assessing Officer vide his letter, dated 19-4-2000 conveyed the objections raised by the Audit Officer for non-levying of workers welfare fund and the complainant was required to furnish explanation/comments in this behalf. The Audit Officer calculated the workers welfare fund on presumptive Income detailed as under:-- Assessment yearIncome PresumedW.W.F.
Levied 1997-98 11,46,437 22,928 1998-99 20,49,479 40,989
4. The complainant's Authorised Representative submitted reply vide his letter, dated 29-4-2000 objecting therein that the calculation of W.W.F. On the basis of presumed income unjustified. It was further, stated that the Assessing Officer had been intimated the actual income of the complainant company detailed as under:-- Assessment yearIncome IntimatedW.W.F.
1997-98 292,458 5,849 1998-99 259,650 5,913
5. The A.R.'s aforesaid letter, dated 29-4-2000 was not responded till 4-8-2003 and on 5-8-2003 the complainant received a letter from the Assessing Officer whereby it was required to pay the arrear tax demand as under:-- 1997-98 17,080 1998-99 40,989 The aforesaid demand pertained to Workers Welfare Fund. The complainant's A.R. Requested for supply of relevant orders regarding levy of workers welfare fund vide his letter, dated 16-8-2003.
The Taxation Officer issued the order for both the years on 18-8-2003 which revealed the following facts:-- The orders of the assessm ent years, 1996-97 and 1998-99 were finalized on 20-7-2000 and the service was effected on 18-8-2003 i,e, after a lapse of more than 3 years.
6. The reply submitted by the complainant was not considered as no comments were recorded in this behalf. The complainant has referred to a decision of the Income Tax Appellate Tribunal reported as (1997) 75 Tax 12 (Trib.) that a period of 90 days was to be considered, a reasonable time in which the Assessing Officer could levy the W.W.F., if not levied in original assessment. It is further, stated that the complainant's company was assessed under section 80CC and as per judgment of the Honourable High Court of Sindh reported as 2002 PTD 14. W.W.F. Could not be charged on the taxpayers who were liable to tax under section 80C or 80CC.
7. It is alleged that the facts stated above clearly establish maladministration against the tax authorities. The order passed by the Taxation Officer was contrary to law, rules and regulations and in disregard to the decisions of superior Courts.
8. The complainant has prayed for issuance of directions to the authorities concerned to cancel the order of levy of W.W.F. For the assessment years, 1997-98 and 1998-99.
9. The respondents have filed parawise comments stating therein that the Authorised Representative of the complainant company did not dispute the imposition of WWF on imputable income in his reply, dated 29-4-2000. He only raised objection regarding the calculation/working of WWF. It is further stated that WWF was levied in this case in pursuance to an audit objection raised by the Audit Officer. It is reported that the perusal of audit objection revealed that the imputable income under section 80CC of the Income Tax Ordinance, 1979 on which WWF. Was levied had been wrongly, calculated. The orders have accordingly been rectified as detailed hereunder:-- Asstt.
YearTax deducted/ subject to section 80CCImputable income worked out by AuditWWF levied as per, order, dated 20-7- 2000Imputable Income rightly calculatedWWF levied as per order dated 12-11- 2003 D.C. # 1997-98 123,242 1,146,437 22,928 286,609 5,732 D. C.
No,10/74 1998-99 220,319 2,049,479 40,989 512,370 10,247 D. C.
No, 11/74 The 'respondents have further, stated that since the grievance of the complainant has been redressed, the A.R. Has consented to withdraw the complaint. As regards the extraordinary delay in service of the demand notice, it is stated that presumably the reply of the A.R. Was considered by the then DCIT and had been rejected. The respondents have also stated that the reliance on the judgments of the learned ITAT and Honourable High Court of Sindh are misconceived, as the facts of this case are absolutely distinguishable.
10. The case has beers discussed with the A.R. Of the complainant and the departmental representatives. Mr. Aziz Ismail, Advocate stated during the course of hearing that after filing of complaint and issuance of notice to the respondents, the Taxation Officer has rectified the orders under section 221 of the Income Tax Ordinance, 2001. He requested to be allowed to withdraw the complaint as the grievances of the complainant company have been redressed. The application in this behalf has also been filed along with copies of rectification orders, dated 12-11-2003.
11. In view of the above stated facts no further, action is called for and the file is closed with these remarks.