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Order 0829492

Sachal Engineering Works (Private) Limited has been issued a notice for failing to deduct withholding taxes for the tax year 2021, with a total recoverable amount of Rs. 493,133. The notice details discrepancies in tax deductions related to repair and maintenance, indirect expenses, and vehicle running expenses, along with a default surcharge of Rs. 50,259. The total tax liability, including penalties, amounts to Rs. 543,392.

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21 views3 pages

Order 0829492

Sachal Engineering Works (Private) Limited has been issued a notice for failing to deduct withholding taxes for the tax year 2021, with a total recoverable amount of Rs. 493,133. The notice details discrepancies in tax deductions related to repair and maintenance, indirect expenses, and vehicle running expenses, along with a default surcharge of Rs. 50,259. The total tax liability, including penalties, amounts to Rs. 543,392.

Uploaded by

benamistaff
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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161(1) (Order to pay tax not deducted / collected from payer)

Name: SACHAL ENGINEERING WORKS (PRIVATE) LIMITED Registration No.: 0829492


Address: 701 , BUSINESS, AVENUE, SHAHRAH-E- Tax Year: 2021
FAISAL, KARACHI, Karachi East Jamshed Town Period: 01-Jul-2020 - 30-Jun-2021
Medium: Online
Contact No.: 00923335225338
Due Date: 18-Apr-2022
Document Date: 18-Apr-2022
Registration Status: Company

It is to inform that this office has been empowered to monitor deduction / collection payment of
withholding taxes at source by taxpayer as withholding agent.

In the light of withholding taxes provisions of Income Tax Ordinance 2001, scrutiny of records available at
FBR e-portal i.e. Income Tax Return for Tax Year 2021, Audited Accounts for the period ended on 30thJune,
2021, withholding Statements e-filed by the taxpayer has been made and following discrepancies
havebeen observed and warrants your explanation hence notice u/s 161(1A) of the Income Tax Ordinance
2001 is issued to the taxpayer, as an opportunity of being heard with the following issues and
observations:

Brief facts of the case are that monitoring proceedings of the taxpayer for the tax year 2021 were initiated
through notice issued notice u/r44(4) of the Income Tax Rules 2002 to furnish reconciliation of the taxes
deducted and deposited. The taxpayer has filed various details and reconciliations which were duly
examined and placed on record.

The documents and details available in this office and monthly withholding statements, return of income,
sales tax returns and audited financial statements filed by the taxpayer for the tax year 2021 have been
examined. The taxpayer filed box files submitted such as local purchases, expenses it has been observed
that withholding whichever applicable was deducted and claimed BTL amount as well as exempt amount
on payments and expenses, however, the copy of exemption certificates were filed, the default amount of
following heads have not been deducted withholding tax and finding is as under:

Finding

a. Repair & Maintenance


In the show cause notice the taxpayer has confronted regarding repair and maintenance on default
amount of Rs. 5,040,300/- which attracts the provisions of withholding taxes. In this regard the taxpayer
filed documents and receipts of withholding tax on amount of Rs. 5,040,300/- was not deducted @ 7.75%
which works out to Rs. 390,623/- is recoverable from the taxpayer u/s 161 of the Income Tax Ordinance,
2001.

b. Other Indirect expenses


In the show cause notice the taxpayer has confronted regarding printing and stationery on default amount
of Rs. 605,210/- which attracts the provisions of withholding taxes. In this regard the taxpayer filed
documents and receipts of withholding tax on amount of Rs. 605,210/- was not deducted @ 10% which
works out to Rs. 60,521/- is recoverable from the taxpayer u/s 161 of the Income Tax Ordinance, 2001.

c. Vehicle running maintenance

Page 1 of 3 Printed on Wed, 12 Feb 2025 12:03:


LTO KARACHI, PRC TOWERS 32-A LALAZAR MT KHAN ROAD KARACHI
161(1) (Order to pay tax not deducted / collected from payer)

Name: SACHAL ENGINEERING WORKS (PRIVATE) LIMITED Registration No.: 0829492


Address: 701 , BUSINESS, AVENUE, SHAHRAH-E- Tax Year: 2021
FAISAL, KARACHI, Karachi East Jamshed Town Period: 01-Jul-2020 - 30-Jun-2021
Medium: Online
Contact No.: 00923335225338
Due Date: 18-Apr-2022
Document Date: 18-Apr-2022
Registration Status: Company

In the show cause notice the taxpayer has confronted regarding vehicle running expenses on default
amount of Rs. 419,890/- which attracts the provisions of withholding taxes. In this regard the taxpayer
filed documents and receipts of withholding tax on amount of Rs. 419,890/- was not deducted @ 10%
which works out to Rs. 41,989/- is recoverable from the taxpayer u/s 161 of the Income Tax Ordinance,
2001.

CONCLUSION

In the light of the facts and legal positions discussed supra, and after having provided opportunity of
hearing, default u/s 161 is established as under:

Tax u/s 161 Rs. 493,133/-

DEFAULT SURCHARGE U/S 205 OF THE INCOME TAX ORDINANCE,2001

The above default also attract default surcharge @ 12% per till date or the date of present order which
works out days, as provided under section 205 of the Ordinance, as amended through Finance Act 2012.
The total amount of default tax under section 161 and default surcharge u/s 205 of the Income Tax
Ordinance, 2001 is computed as under:

Default surcharge u/s 205:

Total Tax charged u/s 161 493,133


Default surcharge u/s 205 50,259
Total Tax liability 543,392

Total amount of Tax u/s 161, Default surcharge u/s 205 and Penalty u/s 182 of the Ordinance: Rs. 543,392
/-.

Tax charged as per Order passed under section 161/205. Issue demand notice and copy of aforesaid order
accordingly.

Page 2 of 3 Printed on Wed, 12 Feb 2025 12:03:


LTO KARACHI, PRC TOWERS 32-A LALAZAR MT KHAN ROAD KARACHI
161(1) (Order to pay tax not deducted / collected from payer)

Name: SACHAL ENGINEERING WORKS (PRIVATE) LIMITED Registration No.: 0829492


Address: 701 , BUSINESS, AVENUE, SHAHRAH-E- Tax Year: 2021
FAISAL, KARACHI, Karachi East Jamshed Town Period: 01-Jul-2020 - 30-Jun-2021
Medium: Online
Contact No.: 00923335225338
Due Date: 18-Apr-2022
Document Date: 18-Apr-2022
Registration Status: Company

Default Surcharge
Description Code Amount
Default surcharge for failure to collect / deduct tax at source (on Taxpayer's
version) 924051 0 543,392

Afaque Ahmed
Assistant / Deputy Commissioner (Audit-II)
Inland Revenue, Unit VIII-Range D, Range-D, -II
LTO KARACHI, PRC TOWERS 32-A LALAZAR MT KHAN ROAD
KARACHI

Page 3 of 3 Printed on Wed, 12 Feb 2025 12:03:


LTO KARACHI, PRC TOWERS 32-A LALAZAR MT KHAN ROAD KARACHI

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