2002 PLP 2378 (PTD)

Ss. 50(7-A) & 86

Constitution of Pakistan (1973), Art. 199-- Constitutional petition

Demand of additional tax from Municipal Committee for its failure to deduct tax at source from assessee contractor

Validity

Assessing Officer after payment of instalment of advance-tax by assessee under S.50(7-A) of Income-tax Ordinance, 1979 had issued clearance certificate, wherein neither date of payment nor the fact of delayed payment had been mentioned

Challan for that payment had been issued. by concerned Circle Officer, and in such manner impliedly payment had been allowed to be made in instalment-- Irrespective of the legal position, if such payment could be made in instalments, Assessing Officer could not be allowed to turn around to claim that payment by instalment was unjustified and same had attracted liability to additional tax

Not at least against Municipal Committee, the contract awarding agency, after holding same to be an assessee in default

High Court accepted Constitutional petition .and declared the demand against Municipal Committee to be illegal. Jahangir A. Jojha for Petitioner. Mian Ashiq Hussain for Respondents. Date of hearing: 31st May, 2002. After hearing the learned counsel for the parties I will agree that the order, dated 1-4-1995 made by the Income Tax Officer, Circle-22 Mandi Bahauddin under section 86 of the Income Tax Ordinance, 1979 requiring the respondent-Committee Muridkey to pay a sum of Rs.33,741 is without jurisdiction.

2. From the record it is established that the Assessing Officer after payment of an instalment of advance tax under section 50(7-A) by the Contractor himself issued clearance certificate on 13-10-1992. In that certificate neither the date of payment was mentioned nor it was stated that the payment had been made with any delay.

3. It will further be noted that on payment of every instalment the concerned Assessing Officer issued a certificate. For example on 14-3-1992 a certificate was issued that the assessee/contractor had made payment of Rs. 1,10,457 as instalment of advance tax under section 50(7-A) of the Income Tax Ordinance, 1979 in the National Bank of Pakistan, Branch Mandi Bahauddin. Obviously the challan for that instalment was issued by the concerned Circle Officer. In that manner impliedly the payment was allowed to be made in instalments. Thereafter, irrespective of the legal position if such payment could be made in instalments, the Assessing Officer could not be allowed to turn about to claim that the payment by instalment was unjustified and that it attracted liability to additional tax. Not at least against the respondent Municipal Committee the contract awarding agency after holding it to be an assessee in default.

4. That being so this petition succeeds and the aforesaid demand against the petitioner is declared to be illegal. S.A.K. /M.A.K.M-1260-/L Petition accepted