78.  Liability of agents representing assessee.-

(1)   Every agent shall, in respect of the income for which he is, or is declared to be, or is treated as, an agent, be deemed to be an assessee for the purposes of this Ordinance and be subject to the same obligations and liabilities as if he were the assessee, and shall be liable to assessment in his own name in respect of that income.

(2)   Every agent who pays any tax under this Ordinance, shall be entitled to recover the tax so paid from the person on whose behalf it is paid, or to retain an equivalent amount out of any moneys due or belonging to the said person which may be in his possession or come into his possession at any time.

(3)   Any agent, or any person who apprehends that he may be assessed as an agent, may retain out of any money payable by him to the person on whose behalf he is liable to pay tax (hereinafter in this section referred to as the 'principal'), a sum equal to his estimated liability under this Ordinance, and in the event of any disagreement between the principal and such agent or person as to the amount to be so retained, such agent or person may secure from the Deputy Commissioner a certificate stating the amount to be so retained pending final determination of the tax liability, and the certificate so obtained shall be his authority for retaining that amount.

Explanation. -For the purposes of this section and section 80, "agent" includes-

(1)    in respect of the income of a minor, lunatic or idiot, the guardian or manager who is entitled to receive, or is in receipt of, such income on behalf of such minor, lunatic or idiot;

(2)    in respect of income which the Court of Wards, the Administrator-General, the Official Trustee or any receiver or manager appointed by, or under, any order of a court receives or is entitled to receive on behalf of, or for the benefit of, any person, such Court of Wards, Administrator-General, Official Trustee, receiver or manager;

(3)    in respect of income which a trustee, appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise (including any Wakf deed which is valid under the Mussalman Wakf Validating Act, 1913) (VI of 1913), receives or is entitled to receive on behalf, or for the benefit, of any person, such trustee or trustees; and

(4)    in respect of the income of a non-resident-

(a)    any person in Pakistan-

(i)     who is employed by, or on behalf of, the non-resident; or

(ii)    who has any business connection with the non-resident; or

(iii)   from or through whom the non-resident is in receipt of any income, whether directly or indirectly; or

(iv)   who holds, or controls the receipt or disposal of, any money belonging to the non-resident; or

(v)    who is the trustee of the non-resident; or

(b)    any person, whether a resident or a non-resident, who has acquired, by means of a transfer, a capital asset in Pakistan; or

(c)    any person, who is declared or treated as an agent of the non-resident:

Provided that-

(a)    a bona fide independent broker in Pakistan who, in respect of any transactions, does not deal directly with, or on behalf of, a non-resident principal but deals with, or through, a non-resident broker, shall not be treated as an agent under this section in respect of such transactions, if-

(i)     the transactions are carried on in the ordinary course of business through the first-mentioned broker; and

(ii)    the non-resident broker is carrying on such transactions in the ordinary course of his business and not as a principal; and

(b)    no person shall be declared or treated as the agent of a non-resident unless he has been given an opportunity, by the Deputy Commissioner, of being heard.

(4)   Nothing in this section shall prevent either the direct assessment of the person on whose behalf, or for whose benefit, any such income is receivable, or the recovery from such person of the tax payable in respect of such income.