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

‑‑‑‑Ss.52, 50 & 86‑‑‑Liability of person failing to deduct or pay tax‑‑ Assessee in default‑‑‑Short deduction on account of not considering Central Excise Duty for purpose of deduction of tax under S.50 of the Income Tax Ordinance, 1979 which was paid subsequently by the supplier itself‑‑‑First Appellate Authority set aside the order for de novo proceeding, the Department's order under S.52 of the Income Tax Ordinance, 1979 treating the assessee to be in default for short deduction‑‑‑Validity‑‑‑Amount in question had already been paid by the supplier‑‑ Assessing Officer was not justified to treat assessee as in default for such amount because the same amount could not be collected from two persons‑‑‑Assessing Officer, at the most, could have charged additional tax under the provisions of S.86 of the Income Tax Ordinance, 1979 ‑from the date of default/short deductions to the date of payment by the supplier/recipient‑‑‑Order of the First Appellate Authority was upheld and departmental appeal was dismissed by the Tribunal.

Syed Riazuddin, D.R. for Appellant.

Z. H. Jaffery for Respondent.

Date of hearing: 20th July, 1999.

ORDER

MUHAMMAD DAUD KHAN (ACCOUNTANT MEMBER).‑‑ In this departmental appeal the department's grievance is regarding C'sIT(A) setting aside for de novo proceedings, the department's order under section 52 treating the assessee to be in default for short deduction of Rs. 84,951 from payments made by it to Messrs Premium Mercantile Services Ltd.

2. Syed Riazuddin, learned D.R. represented the department while Mr. Z.A. Jaffery, Advocate appeared for the assessee respondent.

3. We have perused the DC'sIT order, dated 26‑1‑1999 and C'sIT(A) order, dated 19‑3-1999. The assessee had meticulously deducted tax from payments made by it to its suppliers. in accordance with law but there were short deductions in case of Messrs Premium Mercantitle Services Ltd. and the same was on account of assessee not considering Central Excise Duties for the purpose of deduction under section 50. The DCIT referred to decisions of the Tribunal and instructions of the Board and raised the demand of Rs.84,951 against the assessee under section 52. Assessee's plea before the CIT(A) was that the amount in question had already been paid by Messrs Premium Mercantile Services Ltd. In view of it the DCIT was not justified to treat assessee as in default for this amount because obviously the same amount cannot be collected from two persons. At the most the Assessing Officer could have charged additional tax under the provisions of the section 86 from the dates of default/short deductions to the date of payment by the recipient. Mr. Riazuddin could not convass and valid arguments before us for our decision in the matter to the contrary. We, therefore, feel no hesitation in upholding the C'sIT(A) order. The departmental appeal is dismissed.

C. M. A. /M. A. K./368/Tax (Trib.)Appeal dismissed.