1986 P T (PLP)

Date of hearing: 26th February; 1985. This appeal at the instance of the assessee is directed against the impugned order of the learned C. I. T. (Appeals‑) contained in appeal No. 422 dated 15‑1‑1984. The only grievance of the assessee relates to the fact that the charge of additional tax being illegal and even otherwise excessive may be deleted by the Tribunal.

2. Briefly speaking the facts of this case are that the assessee who is an individual was required to pay advance tax in accordance with the provisions of section 53 of the 'Income‑tax Ordinance, 1979. However, as the assessee did not pay advance tax he was charged to additional tax under section 87 of the Ordinance. Against this treatment the assessee filed an appeal which was dismissed by the learned C. I. T. (Appeals) vide order No. 422, dated 15‑1‑1984. Against this order a second appeal was filed by the assessee before the Tribunal.

3. The learned counsel of the assessee submitted that as the assessee had paid a sum of Rs. 19041 on account of advance tax under sub section (4) of section 50 of the Ordinance, the charge of additional tax under section 87 of the said Ordinance was illegal. The learned D. R. on his part stated that additional tax was rightly imposed on the assessee for non‑payment of advance tax under section 53 of the Ordinance. He accordingly prayed that the charge of additional tax under section 87 of the Ordinance maybe maintained.

4. After hearing both the parties it is my considered opinion that additional tax for non‑payment of advance tax was not rightly charged in this case. In support of this conclusion it is first of all desirable to refer to the scheme of payment of advance tax under section 53 of the Ordinance. Its relevant part is set out below for facility of reference:‑‑ "(1) Where the total income of any assessee (excluding income to which section 27 or (subsections (1) and (2) of section 50 applies) for the latest assessment year in respect of which the tax payable by him has been determined under sections 59, 59A, 60, 62, 63 or 65 is, in the cage of a company not less than twenty‑five thousand rupees, and in other cases not less than fifty thousand rupees, he shall pay, by way of advance tax to the credit of the Federal Government, on or before the fifteen day of September, the fifteen day of December, the fifteen day of March and the fifteen day of June, in each financial year, an amount equal to one‑fourth of the full amount of income tax and super‑tax so determined to be payable in respect of that assessment year (without making any adjustment for any tax already paid by way of advance tax or otherwise), as reduced by the tax, if any, already collected or deducted and paid under section 50 in the said financial year."

5. From a plain reading of subsection. (1) of section 53 of the Income Tax Ordinance it is evident that its provisions are not applicable to income from capital gains, salary and interest on securities. In other words on the facts of this case the assessee was required to pay advance tax. How ever payment of advance tax in this case was subject to the provisions of section 53 of the Ordinance. On a query from me the learned D. R. pointed out that in this case latest assessment in respect of the charge year 1979‑8 was made on 28‑2‑1980, creating a demand of Rs. 10,

773. He further submitted that deduction of tax under subsection (4) of section 50 of the Ordnance amounted to Rs. 19,

041. The latter amount was required to be deducted for the determination of advance tax payable by the assessee during the previous year relevant to the charge year 1980‑

81. Consequently on the facts of this case no advance tax was payable by the assessee after adjusting of Rs: 19,041 paid under section 50(4) of the Ordinance. In this view of the matter assessee could not be charged to additional tax on account of the alleged non‑payment of advance tax. Therefore, the order of the I. T. O. under section 156 of the Ordinance is canceled.

6. In consequence of the above findings appeal of the assessee succeeds. M. Y. H. Appeal accepted.