2002 PLP 166 (PTD)

2. The relevant facts in brief are that the assessee was found to have defaulted 'in the deduction of tax under section 50 of the Income Tax Ordinance, 1979. (hereinafter called the Ordinance). Action was taken under section 86 of the Ordinance to impose additional tax at Rs. 1,26,48,

180. Such levy was set aside, as per the impugned order, with the same direction as given in the preceding year. In the second round the penalty was imposed at Rs. 6,977,

221. The learned CIT(A) set aside the order of the Assessing Officer with the following observation: "After due consideration of the arguments of the learned counsel of the appellant and the learned D.C.I.T and perusal of case records, I find that the arguments of the learned counsel of the appellant carry 'substantial force. Under the circumstances of the case, therefore, I deem it fair to set aside the impugned order and direct the D.C.I.T. to verify from his record the amount of refund due to the appellant at the time when it was required to pay tax under section 52 and, if the appellant's contention that demand under section 52 was less than the refunds due to it, is found to be correct, the proceedings may be dropped as no default could be said to have occurred."

3. The matter of-the fact is that the assessee had a huge amount of refund due to hit and for that reason the assessee claimed that no additional tax could be levied. The learned D.R. has submitted that the Assessing Officer had correctly levied the additional tax from 1-7-1995 to 28-2-1998, the letter date being the date of adjustment of the amount of tax due under section 52 of the Ordinance against the refunds due to the assessee. According to the learned D.R., the tax recoverable under section 50 of the Ordinance was a difference liability as compared to the ordinary demand. The learned D.R. further argued that the provisions of section 50(8)(b) of the Ordinance were not applicable in this case. The learned A.R. of the assessee however, supported the order of the learned CIT(A) on the same ground as already taken before the First Appellate Authority.

4. We have considered the submissions of both the parties. According to the learned D.R. the provisions of section 50(8)(b) of the Ordinance are not applicable to the facts of the case. The existence of sufficient refund due to the assessee is not denied. It would be useful to reproduce the relevant part of subsection (8) of section. 50 of the Ordinance which reads as follows: "50(8). Any sums deducted or collected, or purported to be deducted or collected, under this section shall be- (a) ........... (b) treated as payment of tax on behalf of the assessee."

5. Under the provisions of clause (6) of section 2 of the Ordinance an assessee means a person by whom any tax or any other sum of money is payable under this Ordinance, and includes every person who is deemed to be an assessee or an assessee in default under any provision of this Ordinance. Similarly according to clause (43) of the same section 2, tax means income-tax, super-tax; surcharge and additional tax chargeable or payable under this Ordinance, and includes any penalty, fee or other charge or any sum or amount leviable or payable under this Ordinance. This definition is wide enough to allow the adjustment of tax payable under section 52 of the Ordinance against the refunds due to the assessee. Hence we do not find any merit in this departmental appeal which is dismissed. C.M.A./M.A.K./152/Tax (Trib.) ???????????????????????????????????????????????????????? Appeal dismissed.