As enacted

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Inland Revenue Act 2006 · As enacted · Chapter XVI · Deductions from Interest Paid by Banks and Financial Institutions

139. Issue of directions where deductions are made under sections 133 or 136

Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk

(1)

Any person or partnership from whose interest income the income tax is deductible by a bank or financial institution, or a company which issues any corporate debt security in accordance with the provisions of section 133 or section 136 and such interest income will form part of the assessable income of such person or divisible profit or income of the partnership, as the case may be, for any year of assessment, may, if the amount of income tax payable by him or the relevant partners for such year of assessment is less than the income tax deductible during that year of assessment under section 133 or section 136, make an application to the

Commissioner-General in such form and containing such particulars as may be specified by the Commissioner General, requesting that a direction be issued to that bank or financial institution or any company which issues corporate debt security, to make the necessary adjustments in the deduction of income tax in that year of assessment.

(2)

The Commissioner General or any other officer authorised by the Commissioner General may, on an application made by any person or partnership under subsection (1), issue to the bank, financial institution or company, as the case may be, specified in such application, the necessary directions in writing, a copy of which shall be issued to the applicant, and such bank, financial institution or company shall deduct income tax from the interest payable to such person or partnership, in accordance with such directions:

Provided that any such direction issued may at any time be varied.

(3)

Any person or partnership, who or which is dissatisfied with a direction issued under this section in respect of any year of assessment may, within the period of thirty days after the date of the issue of such direction, appeal to the

Commissioner-General in writing, setting out precisely the grounds on which such appeal is being made. The decision of the Commissioner General on any such appeal shall be final and conclusive:

Provided that the Commissioner General shall, on a request made in writing by such person or partnership, as the case may be, cause an assessment to be made under section 163

on such person or partnership for that year of assessment, for the purpose of enabling such person or partnership to prefer an appeal under section 165, against such assessment.

(4)

Every bank, financial institution or company shall –

(a)

keep a proper record of the interest pad to any person in any year of assessment and the date or dates on which such interest is paid, in such manner as may be specified by the Commissioner-General; and

(b)

permit any officer authorised in writing by the

Commissioner-General to inspect any record maintained by it as referred to in paragraph (a).

(5)

The Commissioner-General shall not issue a direction as provided for in subsection (1) of this section, unless such excess deduction of the income tax arises as a result of losses incurred by such person or partnership which are deductible under section 32 and such amount of losses at the commencement of the relevant year of assessment exceeds the estimated total statutory income for that year, on the basis of the preceding year, excluding the relevant estimated interest income which is subject to the deduction of income tax under section 133 or section 136 or such interest income which is subject to the income tax deduction is exempt from income tax.

Read on from s 140

Chapter XVII