Syed IKRAM UD DIN VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2002 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 2282 (2002)

Income Tax Ordinance (XXXI of 1979)‑‑‑--

‑‑‑Ss.108(b), 139, 50(1)(8); 116&‑2(34)(x)‑‑‑Income Tax Rules, 1982, 8.197‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.9 & 10(4)‑‑‑Penalty‑‑‑Non‑filing of statement by Branch Manager of the Bank on the ground that the same could have been obtained from Regional or Zonal Office of the Bank and filing salary statement was not the responsibility of the Branch Manager,‑‑ Validity‑‑‑Prescribed ‑statement comprised of 43 Columns; Columns 41 and 42 required the date on which the tax deducted from the salary had been deposited and the number of treasury challan on which it had been deposited which had to be verified by the person responsible for paying salary under his own signature and designation for the obvious reasons the payment of salary, deduction of tax out of salary paid and deposit of tax so deducted could be verified only by the persons responsible for performing the three functions‑‑‑Complainant, on the admitted facts, was the person responsible for paying salaries to Branch Staff and to deduct as well as to deposit the tax so deducted‑‑‑Contention .that he was not responsible to file the statement prescribed under the law had no substance‑‑‑Complainant, therefore, did not warrant any action‑‑‑ Federal Tax Ombudsman closed the file accordingly.

Nemo for the Complainant.

Ahmad Hussain Khan, D.C.I.T. for Respondent.

DECISION/FINDINGS

The complainant, Manager of Muslim Bazar Branch of National Bank of Pakistan, Chiniot has alleged maladministration on the part of Deputy Commissioner Income Tax, Circle 17, Chiniot for imposing a penalty of Rs.19,200 under section 108(b) of the Income Tax Ordinance. 1979 on account of non‑filing of statement required under section 139 of the Ordinance. It is further alleged that the Deputy Commissioner Income Tax has further charged additional tax under section. 89 of the Ordinance as an instrument of blackmailing.

2. It is admitted by the complainant that payment of salary and perquisites in consideration of services rendered is the responsibility of the, employer; branches are distribution channels. Managers are distributing salaries as per computerized statements provided by the Regional Office Faisalabad. Branch Manager is deducting tax to compliance with the provisions of the Income Tax Ordinance, 1975 as per guidance of the Regional Office of the Bank.

3. However, it is contended that filing of salary statements was not the responsibility of the Branch Manager. It was to be submitted by the Head Office or could have been obtained from Regional or Zonal Office of the Bank. It is further contended that N.B.P is a juristic person. In case of default, if any, penalty imposed upon bank cannot be multiplied according to number of its branches. It is further contended that the penalty order is against the history of the case and it is based upon mala fide intentions.

4. The Regional Commissioner of Income Tax, Central Region, Multan has submitted in response two notice under section 10(4) of the Ordinance XXXV of 2000 that every person responsible for making payment under the head salary was required to furnish the statement under section 139 of the Ordinance. The Branch Manager being a Principal Officer, as defined in section 2(34)(a) of the Income Tax Ordinance, 1979, was under legal obligation to furnish the prescribed statement under section 139. He further contended that a show‑cause notice under section 116 of the Income Tax Ordinance, 1979 was duly issued which was reportedly not complied with. The Manager/ complainant was afforded another opportunity by issuing reminder to the show‑cause notice vide Letter No. 486 dated 22‑1‑1999. However, it was also not complied with; hence penalty of Rs.19,200 imposed under section 108 of the Ordinance, 1979 vide order dated 30‑1‑1999..

5. It is true that subsection (1) of section 50 of the Ordinance No. XXXI of the 1979 ‑binds any person responsible for paying any income chargeable under the head salary to deduct tax on the amount payable at the time of payment. Subsection (8) of section 50 provides that any sums so deducted shall be paid within the prescribed time and in the prescribed manner by the person making the deduction to the credit of Federal Government. The time and the manner has been prescribed under rule 197 of the Income Tax Rules, 1982 in pursuance of section 139 of the Ordinance XXXI of 1979.

6. The form prescribed under rule 197. inter alia, requires name of the employer as well as the name of the person responsible for paying the salary etc. if not the employer. The prescribed statement comprises of 43 columns. Columns 41 and 42 require the date on which the tax deducted from the salary has been deposited and the number of treasury challan on which it has been deposited. It has to be verified by the person responsible for paying salary under his own signature and, designation for the obvious reasons that payment of salary, deduction of tax out of salary paid and deposit of tax so deducted can be verified only by the persons responsible for performing the three functions.

6. The complainant, on the admitted facts, is the person responsible for paying salaries to Branch Staff and to deduct as well as to deposit the l tax so deducted. His submission that he was not responsible to file the statement prescribed under the law has no substance.

7. The complaint does not warrant any action. The file is closed

C.M.A./M.A.K./314/FTO File closed