corporate assets tax

8/2/2019 Corporate Assets Tax

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1 GHULAM YASEEN M.COM 4TH

(Mor)

Corporate assets tax A new tax called “Corporate Assets Tax'' has been levied through Section 12 of the

Finance Act, 1991. The salient features of the law and procedure relating to this tax areexplained as under for general guidance.

Scope

It is a one-time levy payable by a company as defined in the Companies, Ordinance,

1984 (XLVII of 1984) in respect of the value of fixed assets held by it on the “specified date''.

The specified date means the date falling in the period between 30th June, 1991 and 30th

June, 1992, for which the balance sheet is made up, i.e. the last date on which accounts of the

company are closed. However, if a company has paid this tax on assets as on 30th June, 1991,

it will not be liable to pay this tax on assets as on 30th June, 1992.

Value of Assets Chargeable to tax

The tax is payable on the value of fixed assets as shown in the balance sheet. This is

explained by the following illustration:-

Amount of tax payable

The amount of tax payable under this section shall be follows: ---

1. Where the value of assets is not more than s. 50 million. Nil

2. Where the value of assets is more than Rs. 50 million but not more than Rs.

100 million. Rs. 500,000

3. Where the value of assets is more than Rs. 100 million but nor more than Rs.

250 million. Rs. 1,000,000

4. Where the value of assets is more than Rs. 250 million. Rs. 2,000,000




(Mor)

The tax shall be paid along with the return.

Filing of Return

A company, liable to pay this tax, shall file a prescribed return accompanied by an

audited and certified balance sheet within six months of the specified date. However, the

Wealth Tax Officer can allow extention, in suitable cases, upto one month for filing of return.

Where no return has been filed, the Wealth Tax Officer will issue a notice to a company

which, in his opinion, is liable to pay this tax. The return shall be filed within thirty days from

the date of service of such notice.

Assessment and Collection of tax

The Wealth Tax Officer shall, by an order in writing, determine the tax payable and

serve upon the company a notice of demand specifying the amount of tax payable within agiven date. Thereupon such sum of tax shall be payable by the company through a prescribed

challan form. The recovery provisions of Section 32 of the Wealth Tax Act, 1963 shall also

apply to the recovery of this tax.

Penalty/Additional Tax for Defaults

The following penalty or additional tax is leviable for various defaults:-

Where the company has, without reasonable cause, failed to furnish the return within

the due date, the Wealth Tax Officer may impose a penalty at the rate of one thousandrupees for each day of default.

Where the company fails to pay tax payable alongwith the return or the tax so paid is

less than the tax payable, it shall be liable to pay additional tax at the rate of twenty

four per cent per annum on the amount of tax not paid or the amount by which the tax

paid falls short of the tax payable, calculated from the date it was payable to the date

it is paid or to the date of an assessment order, whichever is earlier.

Appeal Revision or Rectification

The provisions of Sections 23, 24, 25 and 35 of the Wealth Tax Act, 1963 shall alsoapply to this tax and are explained as under:-

The company shall have a right to file an appeal before the Appellate Assistant

Commissioner against an assessment order or a penalty order passed by the Wealth

Tax Officer provided the admitted liability of Corporate Assets Tax has been paid.

The company as well as the Wealth Tax Officer have the right to file a second appeal,

within the prescribed time, before the Appellate Tribunal against the order of the

Appellate Assistant Commissioner.




(Mor)

The Commissioner of Wealth Tax has the authority, either on his own motion or on an

application made by the company, to revise an order passed by any authority

subordinate to him.

The Commissioner of Wealth Tax, the Wealth Tax Officer, the Appellate Assistant

Commissioner and the Appellate Tribunal have the authority to rectify their ownorders suomoto or on application moved by the company.

Corporate assets tax-health or educational institutions instructions

regarding.

In order to provide incentives to the health and educational institutions with the

ultimate object of promoting health and educational facilities in the country, it has been

decided that the provisions of Section 12 of the Finance Act, 1991 (XII of 1991) shall not be

applicable to the chargeable assets of health or educational institutions owned by a company.

Specimen copies of prescribed return form




(Mor)

corporate assets tax

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