ISLAMABAD ELECTRIC SUPPLY COMPANY LIMITED (IESCO) vs The APPELLATE TRIBUNAL INLAND REVENUE (H

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ISLAMABAD ELECTRIC SUPPLY COMPANY LIMITED (IESCO) VS The APPELLATE TRIBUNAL INLAND REVENUE (H.Q), ISLAMABAD Ss. 161, 177 & 205---Islamabad Electric Supply Company Limited (IESCO)---Failure to deduct and collect withholding tax---Order passed under sections 161 & 205 of the Income Tax Ordinance, 2001 without recourse to proceedings under section 177---Legality---Course of action and benchmark enumerated under section 161 of the Income Tax Ordinance, 2001 ('the Ordinance') is not contingent upon the compliance of pre-audit requirements mentioned under section 177, nor does section 177 of the Ordinance override or overlap the provisions contained under section 161 of the Ordinance as a precondition of audit, rather both the provisions are, in all fairness, seemingly independent with self-governing corollaries---In the present case the proceedings initiated by the Deputy Commissioner (IR) under sections 161 & 205 read with section 124 of the Ordinance reflected that the Principal Officer of the petitioner (Electric Supply Company) was confronted with the Audited Accounts electronically filed for the concerned tax years showing huge payments of operating cost and P & L expenses, which were cross-matched with the withholding statements, and Income Tax Returns, whereby it was found that petitioner had not discharged their responsibility as a withholding agent in the prescribed manner---Petitioner was called upon to file documentary evidence of payments with CPR Numbers, so that the tax deduction amount could be verified and credit of tax deduction could be allowed accordingly---Proceedings under sections 161 & 205 of the Ordinance were finalized and an order was issued with the tax demand, however, on an appeal filed before the Commissioner, the Commissioner Inland Revenue (Appeals), remanded the matter---After remand, the petitioner was asked to provide detail of payments made on account of various expenses with relevant supporting documents but the petitioner repeatedly asked for adjournments on one pretext or another and avoided submitting relevant documents or an explanation on the issue of non-deduction/non-collection of tax as required under the Ordinance---Order of the Deputy Commissioner (IR) passed after remand, the Appellate Order of the Commissioner Inland Revenue, and order of Appellate Tribunal Inland Revenue, all pointed out the same fact that sufficient opportunities were provided to the petitioner but it failed to provide relevant documents or details, hence no option was left except to pass the order on the basis of the available record---Petitions for leave to appeal were dismissed and leave was refused.

ISLAMABAD ELECTRIC SUPPLY COMPANY LIMITED (IESCO) vs The APPELLATE TRIBUNAL INLAND REVENUE (H — 2023 SCMR 1516 SUPREME-COURT

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