2010 PTD 927

ORDER

This appeal has been filed by the Department against CIT(A) order dated 6-4-2009. The department has taken the following grounds of appeal:--

(1) That the learned CIT(Appeals-II) was not justified to annul the order under section 221/170(4) of the Income Tax Ordinance, 2001 without considering the facts that the refund was pertaining to contractor and tax deducted under section 153 was full and final discharge of tax liability.

(2) That the learned CIT(Appeals-II) was not justified to annul the order passed by the Taxation Officer under section 221/170(4) of the Income Tax Ordinance, 2001 because as per sub-section (3) of section 170 the satisfaction of the Commissioner of Income Tax regarding over paid tax was mandatory.

(3) That the learned CIT(Appeals-II) was not justified to annul the order and issued direction to the Taxation Officer for processing the claim of refund of taxpayer without considering the fact that there is no provision in Income Tax Ordinance, 2001 to allow/empower the taxpayer to file revised statement under section 115(4) of the Income Tax Ordinance, 2001."

2. Brief facts of the case are that the respondent is an individual and filed statement under section 115(4) under the presumption that the tax deducted on account of services rendered under section 153(1) is final. But later on the respondent filed revised statement under section 115(4) and normal return and claimed tax deducted under section 153(1)(b) as adjustable. The claim was accepted by the Taxation Officer and an order under section 170(4) was passed to issue refund claimed. Later this order was rectified under section 221 of the Income Tax Ordinance, 2001 by the Taxation Officer and claim of the taxpayer that he is a service provider was refused and taxpayer was treated a "Contractor" with statement under section 115 rightly filed as falls under PTR.

3. Being aggrieved with the order under section 221/170(4) the taxpayer filed appeal before the learned CIT(A), who annulled the order of the Taxation Officer on the ground that:---

(i) it was time-barred and

(ii) it was illegally passed under section 221 of the Income Tax Ordinance, 2001.

4. Aggrieved by this treatment meted out by the learned CIT(A), the department filed appeal before this Tribunal.

5. Mr. Basharat Ahmed Qureshi, DR represented the department and Mr. Abdul Tahir, ITP represented the respondent/taxpayer.

6. Mr. Basharat Ahmed Qureshi, the learned DR has supported the order of Taxation Officer but has very little to argue his case.

7. Mr. Abdul Tahir, the learned counsel for the taxpayer has supported the order of the learned CIT(A), it was submitted by the learned counsel for the respondent that the powers to amend an assessment order lies under section 122 of the Income Tax Ordinance, 2001, therefore, no amendment of income and tax liability of taxpayer could be made under S.170(4) of the Income Tax Ordinance, 2001. The learned C.I.T.(A), therefore, has rightly held that the order passed under section 170(4) is not tenable in the eyes of law and consequently annulled the order under section 221 of the Income Tax Ordinance, 2001.

8. We have heard the learned representatives of both the sides and perused the orders of the officers below. The relevant extract from the-order of the learned CIT(A) is reproduced as under:--

"Since the power to amend an assessment order lies under section 122 of the Income Tax Ordinance, 2001, therefore no amendment of income and tax liability of a taxpayer could be made under section 170(4) of the Income Tax Ordinance, 2001, hence the impugned order passed under section 170(4) amending appellant's income and treating the tax deducted under section 153(1) of the Income Tax Ordinance, 2001, as final discharge of appellant's tax liability is ab anitio illegal, and such treatment cannot be allowed to sustain as per existing provision of law."

9. From perusal of the above order of the learned CIT(A), it is evident that learned CIT(A) has rightly annulled the order passed under section 221 of the Income Tax Ordinance, 2001 keeping in view the reported judgment of the Tribunal. No exception, therefore can be taken from the order of the learned CIT(A) which is hereby maintained.

10. Consequently, the departmental appeal is dismissed being devoid of any merit.

C.M.A/11/Tax (Trib.) Appeal dismissed.