| Case ID |
738ca2ce-03d1-4286-84fa-fe7d2d97d68a |
| Body |
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| Case Number |
I.T.A. No. 175/KB of 2012 |
| Decision Date |
May 28, 2014 |
| Hearing Date |
|
| Decision |
The Appellate Tribunal upheld the decision of the Commissioner Inland Revenue (Appeals) regarding the imposition of default surcharge and additional tax on MESS FAYSAL BANK LIMITED for failure to deduct tax as required under the Income Tax Ordinance, 2001. The Tribunal found that the taxpayer had wilfully withheld tax, demonstrating a guilty mind (mens rea) in failing to comply with tax obligations. The Tribunal clarified that the imposition of default surcharge is not a penalty but a method of enforcing compliance with tax law. The appeal was dismissed, affirming the validity of the additional tax and default surcharge imposed by the Inland Revenue Officer. |
| Summary |
This case revolves around the tax obligations of MESS FAYSAL BANK LIMITED under the Income Tax Ordinance, 2001. The Appellate Tribunal Inland Revenue addressed the failure of the bank to deduct and remit taxes, leading to the imposition of default surcharge and additional tax. The Tribunal emphasized that such surcharges are necessary for the enforcement of tax compliance and are not penalties in the traditional sense. The decision underscores the importance of timely tax remittance and the legal consequences of failing to meet these obligations. The ruling serves as a critical reminder for financial institutions regarding their responsibilities under tax law, particularly in the context of public exchequer utilization and the need for accountability in tax collection practices. |
| Court |
Appellate Tribunal Inland Revenue
|
| Entities Involved |
MESS FAYSAL BANK LIMITED,
C.I.R. (APPEALS-I), L.T.U., KARACHI
|
| Judges |
MUHAMMAD JAWED ZAKARIA (JUDICIAL MEMBER),
MS. FARZANA JABEEN (ACCOUNTANT MEMBER)
|
| Lawyers |
Asif Haroon, A.R. for Appellant,
Zulfiqar Ali Memon, D.R. for Respondent
|
| Petitioners |
MESS FAYSAL BANK LIMITED
|
| Respondents |
C.I.R. (APPEALS-I), L.T.U., KARACHI
|
| Citations |
2017 SLD,
2017 PTD 867
|
| Other Citations |
2003 PTD (Trib.) 346,
1973 PTD 446,
2010 PTD (Trib.) 1081,
Westminster Bank Ltd. v. Riches (1947) 28 TC 159,
Helvering v. Mitchell-303 US 390
|
| Laws Involved |
Income Tax Ordinance, 2001
|
| Sections |
161,
205,
221
|