KARACHI: The Sindh High Court (SHC) issued pre-admission notices to the tax authorities and deputy attorney general of Pakistan on an appeal filed by Schumberger Seaco INC, (a company incorporated under the law of panama) seeking exemption from withholding tax on salaries to foreign national employees.
While the hearing of appeal, a two-member bench headed by Aqeel Ahmed Abbasi also directed them to filed their respective comments for second week of Feb, 2017.
Earlier, counsel for the applicant stated that it is a branch of a non-resident company incorporated in panama and provides services to oil exploration and production companies in Pakistan in the fields of oil-well drilling, wire line logging, test operations, etcetera.
According to the applicant, it was received show cause notice dated 23/05/2014 under section 122 (9) read with section 122 (5A) of the income tax ordinance, 2001 for from the additional commissioner inland revenue (audit) and requested the applicant to furnish its reply in respect of the number of issues relating assessment order for its income treated to have been made under section 120 of the ordinance for tax year 2008, among other issues, the show cause notice alleged short fall the withholding tax on salaries.
Counsel argued that, being aggrieved applicant filed an appeal before concerned authority which was dismissed and upheld the show because notice, counsel further argued that applicant is entitled to exemption from withholding tax on salaries to foreign national employees under section 3B of the schedule to the regulation of nines and out fields mineral development (government control) act, 1948 read with the proviso to section 5A of the income tax ordinance 2001 which prevailed on tax year 2008.
Citing Commissioner Inland Revenue Zone-IV, Large Taxpayers Unit Karachi as respondent, applicant pleaded the court may declare that act of the respondent is illegal, mala fide and arbitrary, applicant also pleaded the court may set aside impugned show cause notice issued by the tax authorities to the applicant.
