2003 PLP (Trib (PTD)

(3) The citations (2000) 82 Tax 17 (Trib.) has wrongly been made the basis for framing the impugned assessment against the appellant/assessee. (4) The proceedings vis‑a‑vis the assessment order both were hit by the limitation as held in a judgment reported as (1999) Tax 67 (Trib.), thus after the expiry of four years from the date of the order under section 62 the matter has become barred by time. (5) On the point of jurisdiction it was stated that the Assessing Officer holding the jurisdiction over the case of the deducting authority has no authority to create a demand in respect of the recipients. (6) Learned A.R. relied on Writ Petition No. 1335 of 1998, dated 22‑3‑1999 and also on an unreported ITAT order I.T.A.T. No.4136 of LB/2000 assessment year 1998‑99, dated 17‑7‑2001. (7) While drawing clear distinction between the supplies and sales, the learned A.R. by relying on citations (1980) Tax 262 (Lahore High Court) opined that all the purchases cannot be made liable to action under section 52 as only supplies are liable to action under section

52. The learned A.R. further argued here that the cash purchases cannot be subjected to tax deduction under section

52. Such purchases are made from the shop and deduction of tax against such payments was deleted by the Tribunal and quoted the citation 2001 PTD 1094. The learned A.R. read out the relevant version from all the citations as re‑produced above and pleaded for deleting the tax demand created under section 52 and the imposition of additional tax under section 86 on the so worked out outstanding demand. The learned A.R. argued that the learned First Appellate Authority failed to grant the relief as per grounds of appeal filed. The learned A.R. supported the existence of the issues enumerated above and pleaded that these are quite sufficient for declaring this demand as null and void. The learned D.R. referred to the concluding para. on page 3 of the assessment order and pleaded for maintaining the order as it is not barred by time as recovery of tax is not adversely effected by limitation. The learned D.R. contended that Income Tax Ordinance has not prescribed any time frame for invoking the provisions of section 52 and also section

86. The learned D.R. stated that payments made by the appellant/assessee were liable to tax deduction which has not been done, so the appellant/assessee is liable to pay the tax which he was failed to deduct earlier alongwith the additional tax under section 86 of the Income Tax Ordinance. Arguments have been heard. On perusal of record it has come at surface that the Assessing Officer without particularly pinpointing the payments liable to tax deduction has made liable the whole of the payments made under the various heads of accounts as mentioned in the Order and thus failed to qualify and also to quantify the exact amount of tax deduction against the particular payment made, vis‑a‑vis against particular person because the tax is charged in respect of a particular payment and also in respect of a particular person without determining the payment and person the imposition of tax cannot get a legal shape. Secondly the Department could not determine as to whether the tax not deducted could be retrieved or not in about 5 years the time span from 26‑12‑1996 the date of issuance of first notice till 30‑6‑2001 the date of assessment order. Thirdly, without any justification the proceedings have been kept limbo and have not been concluded during the period of this pendency of proceedings. Fourthly no timely attempt as provided in law has been made in order to collect necessary information during the pendency of proceedings for holding the appellant/assessee as "Assessee in Default". Fifthly the Assessing Officer failed to acknowledge that the ,appellant/assessee was to do extra service to Revenue by working as Deducting Authority on behalf of the Government as such there was nothing due from the appellant/assessee as his ‑personal tax liability against his income in, such circumstances no harm would have been caused to Department in reminding the appellant/assessee after assessment under section

62. Sixthly and also importantly the department has slept over the case after the issuance of the notice, dated 26‑12‑1996 till June, 2001, when hurriedly entire proceedings were concluded, so there is no justification of this inordinate delay in finalization of order under sections 52/86 after issuance of notice, dated 26‑12‑1996 as this all does not give the impression that judicious view was adopted. This is depictive of the callousness on the part of the functionaries of the department towards national interests, therefore, we are forced to hold that the initiating of the proceedings for action under section 52, B thereafter passing of the order under section 52 by framing the assessment for creating the tax demand and thirdly the imposition of Additional Tax under section 86 on the so worked out tax demand under section 52 by treating the appellant/assessee as assessee in default are null and void in the eye of the law which are hereby annulled for both the impugned years, resultantly the entire impugned tax demand is also knocked off, the appeals are disposed of accordingly. So, no need is left to adjudicate upon the other issues raised before us. C.M.A./572/Tax (Trib.) Order accordingly.