COMMISSIONER INLAND REVENUE vs PUNJAB MEDICAL STORE Ss — 2023 PTD 1046 LAHORE-HIGH-COURT-LAHORE

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COMMISSIONER INLAND REVENUE VS PUNJAB MEDICAL STORE Ss. 153 & 161---Income Tax Rules, 2002, R. 44---Failure to pay tax collected or deducted---Payments for goods, services and contracts---Statement of tax collected or deducted---Scope---Department noted that payments were made to various persons by the respondent but no proof of tax deduction in terms of S. 153(1)(a) of the Income Tax Ordinance, 2001, was provided and taking cognizance of the default of withholding tax provisions, notice under R.44(4) of the Income Tax Rules, 2002 was issued, which was not responded by the taxpayer and resultantly after issuing show-cause notice and affording multiple opportunities of hearing, order-in-original was passed and a tax demand was raised---Appeal preferred before the Commissioner (Appeals) was dismissed, however, the Appellate Tribunal allowed the appeal---Validity---Taxpayer was a prescribed person, obligated to deduct tax while making payments against purchases in terms of S. 153(1)(a)---Appellate Tribunal on the one had held that default of tax deduction for the tax year concerned stood established and on the other hand it had been held that the recipients of the payments had filed their returns, therefore, the Assessing Officer was not justified to create the impugned tax demand that appeared to be a self-contradictory finding---Respondent had not brought on record any proof of payment of the amount due by the recipients of the payments from the respondent, before the forums below and, therefore, mere filing of the returns by the said recipients was not sufficient to establish that the tax due was actually paid---Respondent could not be absolved from its statutory obligation to collect and deposit the tax as withholding agent---Reference application was allowed.

COMMISSIONER INLAND REVENUE vs PUNJAB MEDICAL STORE Ss — 2023 PTD 1046 LAHORE-HIGH-COURT-LAHORE

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