I.T.AS. NOS.307/LB OF 1989-90 AND 280/LB OF 1990-91, DECIDED ON 3RD JANUARY, 1991. VS I.T.AS. NOS.307/LB OF 1989-90 AND 280/LB OF 1990-91, DECIDED ON 3RD JANUARY, 1991.
1991 P T D (Trib.) 637
[Income-tax Appellate Tribunal Pakistan]
Present: Mian Abdul Khaliq, Judicial Member and Mukhtar Ali Khan, Accountant Member
I.T.As. Nos.307/LB of 1989-90 and 280/LB of 1990-91, decided on 03/01/1991.
Income Tax Ordinance (XXXI of 1979)---
----S. 59---Self-Assessment Scheme (1987-88)---Assessee filed return of income in perfect compliance with terms of Self-Assessment Scheme---Setting apart case of such an assessee on the pretext that the assessee's signatures on the return differed from his genuine signatures was illegal---Return filed by assessee did not suffer from any lacuna and assessments returned income merited acceptance under the Self-Assessment Scheme in circumstances.
Zia H. Rizvi for Appellant.
S. Roomi Shah, D.R. for Respondent.
Date of hearing: 17th December, 1990.
ORDER
MIAN ABDUL KHALIQ (JUDICIAL MEMBER): --For the charge year 1987-88 and 1988-89 these two further appeals have been filed by legal heirs of an assessee assailing separate orders of the learned CIT(A)-IV and II dated 10-6-89 and 14-6-90. The year-wise position is as under:--
Assessment year 1987-88:
The assessee, an individual, deriving income from dealing in plastic products filed return declaring income at Rs.40,200. The return filed under Self-Assessment Scheme was accompanied by a computation chart. The .ITO was of the view that the assessee had failed to furnish any evidence to establish payment of tax and on 21-1-1988 he issued a letter to the assessee seeking the details about payment of tax and his residential address alongwith telephone number. Before receipt of the assessee's reply, the ITO formed his view that the signatures of the assessee on the return were not genuine and he served a show cause notice to the assessee on that pretext. Without mentioning the details of reply of the assessee, the ITO held that the reply was unsatisfactory. The return filed by the assessee was held to be ab initio void because of differences in signatures. The 11'0 issued notice under section 56 of the Income Tax Ordinance, 1979 (hereinafter referred to as the Ordinance) and the assessee having died by then, his legal heirs filed return declaring income as declared by the deceased. The ITO while making normal assessment under section 62 of the Ordinance determined the assessee's income at Rs.1,25,000 by estimating sales at Rs.10,00,000 with G.P. rate of 15% and expenses allowed at Rs. 25,000.
On appeal- the first appellate authority brushed aside the assessee's plea of acceptance of., return under Self-Assessment Scheme and modified the assessment by confirming the adopted estimate of sales/G.P. rate and raising of expenses from Rs.25,000 to Rs.45,000.
We have heard the assessee's A.R. A persual of the assessment record leaves us in no doubt that the departmental officers erred in discarding the assessee's income declared under Self-Assessment Scheme. The return filed by the deceased merited acceptance under Self-Assessment Scheme because tax of Rs.810 on declared income of Rs.40,200 was duly paid with the return. This fact is borne out from the assessment record. The ITO after issuing notice to the assessee for furnishing of proof of payment went astray in holding the assessee's return to be ab initio void because of differences in signatures. When the assessee had filed return under Self-Assessment Scheme, requirement of law was that the tax due should have been paid and the returned income should have been in accordance with the conditions prescribed by the Self-Assessment Scheme of the charge year 1987-88. The fact of payment of tax have been duly established from the assessment record. The return filed by the deceased did not suffer from any lacuna. Under law it had to be accepted under Self-Assessment Scheme. The ITO erred in selecting the case for normal assessment on false pretext of difference in signatures of the deceased on the return. The learned CIT(A) did not bother to examine the legal aspect of the matter. In these circumstances, we modify the orders of the departmental officers and direct that the assessee's returned income of Rs.40,200 be accepted under Self-Assessment Scheme.
Assessment year 1988-89:
For the charge year 1988-89 the assessee declared net income of Rs.40,500 with sales at Rs.3,25,000 yielding G.P. rate of 15%. The ITO after discarding the assessee's version applied G.P. rate of 15% to sales estimated at Rs.10,00,000. By allowing expenses at Rs.25,000, the assessee's net income was worked out at Rs.1,25,000. This assessment successfully stood the test of appeal before the learned CIT(A).
For this year the ITO had mainly relied on the results of assessment made under section 62 of the Ordinance for the immediately preceding assessment year. As we have modified the orders of the departmental officers of the earlier year directing acceptance of the assessee's returned income under Self-Assessment Scheme, the basis of the impugned assessment ceases to hold the field. In this view of the matter, orders of the departmental officers for the charge year 1988-89 are vacated and the matter is remitted to the ITO for de novo assessment in accordance with law. As a result both the appeals of the assessee succeed accordingly.
M.BA./1181/T Order accordingly.