1. This judgment shall also decide PTR Nos. 498, 499, 500, 501, 502, 503, 504, 505, 506, 507, 508 and 509 of 2012, as all these Reference Applications are directed against five even dated orders passed on 23.07.2012 by Appellate Tribunal Inland Revenue (“Appellate Tribunal”).
In all the reference applications, following common questions of law are proposed for opinion:
“Whether under the facts and in the circumstances of the case, the ATIR was justified to deviate from the instructions by the apex court and to cancel the original order as being defective, which was not a subject matter before the CIT(A) and also was not discussed by him while deciding the appeal of the assessee?
Whether under the facts and in the circumstances of the case, the ATIR was justified to cancel the orders of the taxation officer with the observation that the taxation officer has not established the default whereas the taxation officer has lawfully treated the person as assessee in default by invoking the provisions of section 52 and 86 of repealed ordinance, 1979 after affording reasonable opportunity of being heard to the assessee thereby, establishing the default on the part of the assessee regarding discharge of his legal obligations to withhold tax under express provisions of law?”
2. The Appellate Tribunal decided thirteen appeals, relating to assessment years from 1991-92 to 1999-2000, by impugned even dated orders. The appeals were remanded by Hon’ble Supreme Court of Pakistan through its judgment in C.A. No.1091-1092 of 2009 after deciding the issue of limitation relating to Section 52 and 86 of Repealed Income Tax Ordinance, 1979 (“Repealed Ordinance”).
Learned counsel for the applicant/department submits that directions, as given by Apex Court, have not been complied by the Appellate Tribunal; the appeals were dismissed on technical ground that person responsible for making payment was principal officer of the taxpayer company, therefore, proceedings under Section 52 against the company were unlawful. By reading Subsection (4) of Section 50, he contends that payment was to be made by the Company. Further submits that the word “person” used in Subsection (4) is defined in Section 2(32) of the Repealed Ordinance, which includes Company, therefore, the interpretation adopted by Appellate Tribunal, for arriving at impugned decision, is against the spirit of law.
3. Learned counsel for the respondent has opposed the arguments by supporting the interpretation and reasons given by Appellate Tribunal; Subsection (9) of Section 50 of Repealed Ordinance is read, to contend that the principal officer in case of company was responsible for making payments; Adds that Subsection (4) and Subsection (9), if read together, would clearly show that principal officer making payment for company was to be proceeded under Section 52. It is also argued that questions as framed are not arising out of Appellate Tribunal’s order.
4. Heard, record perused.
5. We agree with the learned counsel for the respondent that questions of law, as framed, are not arising out of Appellate Tribunal’s order. However, the proposition of law, pleaded before us, is discernible from reading of operative part from the Appellate Tribunal order, which needs deliberation by this Court. In the interest of justice, we intend to re-settle the proposition in following words:
“Whether under the facts and circumstances of the case, Appellate Tribunal was justified to hold that principal officer of the taxpayer company and not the company was a ‘person responsible for making any payment’, therefore, proceedings under Section 52 could not be initiated against the company?
6. Examination of the relevant provisions from Subsection (4) and (9) of Section 50 of the Repealed Ordinance is necessary.
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