Income Tax Ordinance, 2001 — Section 141: Liquidators

141. Liquidators.— (1) Every person (hereinafter referred to as a “liquidator”) who is –

(a)a liquidator of a company;

(b)a receiver appointed by a Court or appointed out of Court;

(c)a trustee for a bankrupt; or

(d)a mortgagee in possession, shall, within fourteen days of being appointed or taking possession of an asset in Pakistan, whichever occurs first, give written notice thereof to the Commissioner.

(2)The Commissioner shall, within three months of being notified under sub-section (1), notify the liquidator in writing of the amount which appears to the Commissioner to be sufficient to provide for any tax which is or will become payable by the person whose assets are in the possession of the liquidator.

(3)A liquidator shall not, without leave of the Commissioner, part with any asset held as liquidator until the liquidator has been notified under sub-section (2).

(4)A liquidator

(a)shall set aside, out of the proceeds of sale of any asset by the liquidator, the amount notified by the Commissioner under sub section (2), or such lesser amount as is subsequently agreed to by the Commissioner;

(b)shall be liable to the extent of the amount set aside for the tax of the person who owned the asset; and 1 Sub-section (7) omitted by the Finance Act, 2003. The omitted sub-section (7) read as follows: “(7) Where an amount has been paid under sub-section (1), the taxpayer shall be allowed a tax credit for the amount (unless the amount paid represents a final tax on the taxpayer’s income) in computing the tax due by the taxpayer on the taxpayer’s taxable income for the tax year in which the amount was paid.” 2 Sub-section (8) omitted by the Finance Act, 2003. The omitted sub-section (8) read as follows: “(8) The tax credit allowed under this section shall be applied in accordance with sub-section

(3)of section 4.” 3 Sub-section (9) omitted by the Finance Act, 2003. The omitted sub-section (9) read as follows: “(9) A tax credit or part of a tax credit allowed under this section for a tax year that is not able to be credited under sub-section (3) of section 4 for the year must be refunded to the taxpayer in accordance with section 170.” 289 Chapter X – Procedure

(c)may pay any debt that has priority over the tax referred to in this section notwithstanding any provision of this section.

(5)A liquidator shall be personally liable to the extent of any amount required to be set aside under sub-section (4) for the tax referred to in sub-section

(2)if, and to the extent that, the liquidator fails to comply with the requirements of this section.

(6)Where the proceeds of sale of any asset are less than the amount notified by the Commissioner under sub-section (2), the application of sub-sections

(4)and (5) shall be limited to the proceeds of sale.

(7)This section shall have effect notwithstanding anything contained in any other law for the time being in force.

(8)The provisions of this Ordinance shall apply to any amount due under this section as if it were tax due under an assessment order. 142. Recovery of tax due by non-resident member of an association of persons.— (1) The tax due by a non-resident member of an association of persons in respect of the member’s share of the profits of the association shall be assessable in the name of the association or of any resident member of the association and may be recovered out of the assets of the association or from the resident member personally.

(2)A person making a payment under this section shall be treated as acting under the authority of the non-resident member and is hereby indemnified in respect of the payment against all proceedings, civil or criminal, and all processes, judicial or extra-judicial, notwithstanding any provisions to the contrary in any written law, contract or agreement.

(3)The provisions of this Ordinance shall apply to any amount due under this section as if it were tax due under an assessment order.