JUDGMENT

The titled appeal pertaining to tax year 2017 has been filed by the department against order No.01 dated 04.03.2019 passed by Commissioner Inland Revenue (Appeals-II), Lahore whereby the learned CIR(A) deleted the tax liability of Rs.1,973,470/-created under section 161 by the OIR.Brief facts are that the taxpayer, a private limited company engaged in the business of Tanning and Processing of Leather, is a withholding agent and is liable to deduct and deposit withholding tax under the withholding provisions of Income Tax Ordinance, 2001 and submit statements of tax deduction under section 165. In order to verify compliance level, notice under rule 44(4) was issued to the taxpayer for reconciliation of the payments. Being dissatisfied with the details, the OIR issued show-cause notice under section 161(1A) dated 23.06.2018 to the taxpayer which eventually culminated into order-in-original dated i.e. 30.11.2018. Nondeduction under various heads were confronted but after examining reply/e...