Letter from Central Sindh Tax Bar Association, Nawabshah

LETTER FROM CENTRAL SINDH TAX BAR ASSOCIATION, NAWABSHAH <!--[if gte mso 10]> LETTER FROM CENTRAL SINDH TAX BAR ASSOCIATION, NAWABSHAH TO CHAIRMAN, FEDERAL BOARD OF REVENUE (Re: Refund of tax deduction made under section 235 of the Income Tax Ordinance, 2001 in the case of the Taxpayers falling under presumptive tax regime) [20th February, 2009] To The Chairman, Federal Board of Revenue, Islamabad. SUBJECT: REFUND OF TAX DEDUCTION MADE UNDER SECTION 235 OF THE INCOME TAX ORDINANCE, 2001 IN THE CASE OF THE TAXPAYERS FALLING UNDER PRESUMPTIVE TAX REGIME. Sir, I would like to bring to your kind notice towards amendment made in section 235 of the Income Tax Ordinance, 2001 through Finance Act, 2007 which is as under:--- "The tax collected under this section shall be minimum tax on the income of a person (other than a company). There shall be no refund of tax collected under this section, unless the tax so collected is excess of the amount for which taxpayer is chargeable under this Ordinance in the case of company." 1. That from the context of above amendment read with section 4 of the Income Tax Ordinance, 2001 it is quite clear that the tax on taxable income of an individual and AOP is chargeable as per rates prescribed in First Schedule of the Income Tax Ordinance, 2001 subject to levy of minimum tax whichever is higher. Moreover, the tax collected under section 235 shall be refundable only in the case of company. 2. That the cotton ginners and oil mills are subjected to final tax deductible on supplies of cotton lint and oil under section 153 read with section 169 of the Income Tax Ordinance, 2001 and there is no provision in law of double taxation one for levy of minimum tax and other one under presumptive tax regime. It is pertinent to mention here that where the tax chargeable under PTR is higher than the minimum tax under subsection (4) of section 235 of the Income Tax Ordinance, 2001, the higher tax is chargeable instead of minimum tax. 3. That my clients have claimed refund for the tax year 2008 of tax deducted under section 235 of the Income Tax Ordinance, 2001 but the concerned officer is not issuing the same on the plea of amendment made in section 235 of the Income Tax Ordinance, 2001 in the year 2007, which is not justified in the light of above submissions. It shall be highly appreciated if your honour may kindly look into the matter and issue necessary directions to the concerned officer of Enforcement-IV Regional Tax Officer Hyderabad as the learned Commissioner of Income Tax Enforcement has declined to accept the plea of the applicant and insure justice.