PRESENT:
Main Abdul Bari Rashid (Member)
VS
The ,CIR Zone 4 ,CTO Lahore
Petitioner(s) by: Mr. Sawaiz Bin Ahmad ,ACA.
Respondent(s) by: None.
Sections: Sections 138 & 140
The Tribunal clarified that refundable income tax can be applied against outstanding super tax liability under Section 4C of the Income Tax Ordinance, 2001, as mandated by Section 170(3)(a).
🔹 Authorities below had rejected adjustment by relying on M/s CM Pak Limited v. Federation of Pakistan, which dealt with withholding tax credits not with refund appropriation.
🔹 The Tribunal distinguished between credit in computation and appropriation of refund against demand, holding that once excess tax is established, the Commissioner must apply it in reduction of “any other tax due” under the Ordinance, including super tax.
🔹 It emphasized that recovery provisions (Sections 138 & 140) cannot override Section 170(3), and Rule 210B requires satisfaction that no refund is available before coercive recovery is initiated.
Decision:- The Tribunal annulled the orders of the lower authorities, affirming that refundable income tax of Rs. 230.95 million could be adjusted against the super tax demand of Rs. 58.27 million.This ruling reinforces the principle that statutory refunds are not discretionary and they are a mandatory mode of settlement against tax liabilities.
Disclaimer / Note: We have reproduced the judgment for facilitation of readers; however, the readers must study the original or certified copy of the above said judgment before referring it in any Court of Law. The judgment as reproduced above is a reported judgment available in law magazines and journals namely: 2026 THLN 9116