I.T.A. NO.110(IB) OF 1985-86, DECIDED ON 30TH APRIL, 1986. VS I.T.A. NO.110(IB) OF 1985-86, DECIDED ON 30TH APRIL, 1986.
1991 P T D (Trib.) 639
[Income-tax Appellate Tribunal Pakistan]
Before Syed Amjad Ali Bokhari, Judicial Member and Sikandar Hayat Khan,
Accountant Member
I.T.A. No.110(IB) of 1985-86, decided on 30/04/1986.
(a) Income Tax Ordinance (XXXI of 1979)-- -
---S. 65--Re-opening of assessment---Definite information---Sale price of property---Assessment of Capital Gains Tax regarding sale of property constitutes "definite information" within meaning of S. 65 warranting re-opening of assessment.
(b) Income-tax---
of immovable property---Registered deed of property being a public document, price of property mentioned therein carries an element of sanctity until it was controverted by evidence.
1984 PTD (Trib.) 65 ref.'
(c) Income Tax Ordinance (XXXI of 1979)---
----Ss. 61, 62 & 63---Where order sheet entry was silent as to which documents were requisitioned by the I.T.O. from the assessee, assessment under S. 63 on ground of failure of the assessee to file the requisite documents was not sustainable.
(d) Income Tax Ordinance (XXXI of 1979)---
----Ss. 61 & 62---Assessment---Addition---Failure to mention charging section of the Ordinance and not affording an opportunity of being heard would not make the assessment ab initio illegal but the assessment could be set aside.
1985 PTD 1978 (Trib.) and 1986 PTD (Trib.) 73 ref.
Khalid Waheed for Appellant.
Ihsan Elahi Tarique, D.R. for Respondent.
Date of hearing: 24th April, 1986.
ORDER
SIKANDAR HAYAT KHAN (ACCOUNTANT MEMBER).---This appeal on behalf of the assessee is directed against the impugned order of learned Commissioner of; Income Tax (Appeals) by virtue of which he set aside assessment relating to the charge year 1984-85.
2. Brief facts giving rise to this appeal are that the assessee, who is an individual, derives income from a bakery styled as View Point Bakery, Rawalpindi. He riled - a return to disclose net profit of Rs.18,950 under the Self-Assessment Scheme accompanied with a statement of accounts including a reconciliation statement of assets. In the statement of assets and liabilities for the period ending 30-6-1984 value of shops Nos. 183, 184, 185 and 187 and house No.188 close to Chungi No.22, Rawalpindi was disclosed at Rs.1,00,000 as is evident from evidence on record. The disclosed income of the assessee after taking into account relevant documents furnished with the return was accepted under sub-section.. (1) of section 59 of the Income Tax Ordinance, 1979. Subsequently, Income Tax Officer, Circle-21, Rawalpindi received information from ITO, Survey Circle-3, Rawalpindi vide letter No.1332, dated 31-1-1985 that purchase price of the property under consideration was fixed at Rs.2,80,000 by the Excise and Taxation Department, Rawalpindi. In consequence thereof a notice under section 65 of the Ordinance ibid was issued by the ITO, Circle-21, Rawalpindi on 12-1-1985 and was served on the assessee on the same date as is apparent from the report of Process Server, dated 12-1-1985. On the date of hearing i.e. 16-1-1985 assessee attended the office of the Income Tax Officer, Circle-21 in person and was directed to produce certain documents on 17-1-1985. From order sheet entry dated 16-1-1985 it is not evident what documents were requisitioned by the Income Tax Officer from the assessee. Thereafter, without serving a notice under section 61 assessment relating to the charge year 1984-85 was finalized under section 65 of the Ordinance ibid. We find that while relevant section was corrected in the original order, it was not so corrected, in respect of copies sent to the assessee and to the Office of the Tribunal by the Income Tax Officer, Circle-21, Rawalpindi. We say so as in our record assessment appears to have be, finalised under section 63 of the Ordinance ibid.
3. In the light of Commissioner of Income Tax, Rawalpindi Zone, Rawalpindi letter No. ITAT/Misc./83-84/444/J.Br., dated 31-12-1983 assessment relating to the charge year 1984-85 was made as under :--
| (1) Income as originally assessed | =Rs. 18,950 |
| (2) Difference between the purchase price shown by the assessee and price allegedly paid by the assessee to the seller according to information sent by the Excise and Taxation Department, Rawalpindi. | = Rs.1.80,000 |
| Total Income | = Rs.1.98.950 |
4. Income as assessed above was contested in appeal before learned Commissioner of Income Tax (Appeals) who by virtue of Appeal No.3015 dated 13-6-1985, set aside assessment in the following words:--
"The ITO has simply adopted the figures taken by the Excise & Taxation Authority, which is not quite proper, as she herself, is empowered to estimate the value under the relevant provisions of the Income Tax Ordinance, 1979. In view of the foregoing, it would be fair if the assessment is set aside for regular re-consideration under the' normal law, on sound and scientific lines and in the light of the operative facts and factors of the case."
5. The assessee having taken exception to setting aside of assessment filed second appeal before the Tribunal. In this connection, grievance of the assessee is that learned Commissioner of Income-tax (Appeals) should have annulled the assessment instead of setting it aside to be made de novo in accordance with his directions.
6. After hearing both the parties, it is our considered opinion that assessment was rightly re-opened under section 65 of the Ordinance ibid as the Income-tax Officer, Circle 21, Rawalpindi had received definite information from the Excise and Taxation Department, Rawalpindi with regard to the amount for which property was allegedly purchased by the assessee. At the same time, however, it is not possible for us to agree with the finding of the Income-tax Officer that the assessee in fact purchased property under consideration for a sum of Rs.2,80,000. In arriving at this conclusion, we have with advantage drawn support from the registration deed executed between the seller and purchaser on 19-10-1983. According to it, the seller received a sum of Rs.1,00,000 from the assessee in the presence of two independent witnesses. This public document unless it can be demolished by corroborative evidence stands as the only piece of evidence to establish payment of Rs.1,00,000 by the assessee as purchase price of property under consideration. As the Income-tax Officer did not put on record any evidence to demolish purchase price paid by the assessee in respect of the property under consideration he certainly fell into an error in relying solely on the value of property fixed by the Excise and Taxation Department. At this stage it is also relevant to put on record that the Excise and Taxation Department did not implead the assessee as a party before fixing value of property under consideration at Rs.2,80,000.
7. We also find that the assessee appeared before the Income-tax Officer in I response to a notice under section 65 of the Ordinance ibid on 16-1-1985 when he was directed to submit certain documents on 17-1-1985. From the. order sheet entry dated 16-1-1985 it is not clear what documents the Income-tax Officer had directed the assessee to furnish. This thing apart the assessee was given only one day for production of documents listed in the order-sheet entry dated 16-1-1985. The assessment was, however, finalized under section 65 according to assessment order and under section 62 of the Ordinance ibid vide order-sheet entry dated 3-2-1985. As the documents were not requisitioned either under section 61 or section 62 of the Ordinance ibid the assessment made by the Income-tax Officer by virtue of order dated 3-2-1985 is not sustainable on account of reasons recorded from para. 6 to para. 7.
8. In 1984 P T D (Trib.) 65 it was held that where the Income-tax Officer considers a sale-deed to be understated he could re-determine the price of property prevaili4in the market at the relevant time. We agree with it but will like to add that registration deed of property being a public document, price of property mentioned in it does carry an element of sanctity until it is controverted by evidence. In the present case price of the property under consideration, as mentioned in the registration deed, having not been controverted by the Income-tax Officer by putting on record independent evidence, we have been left with no other conclusion but to disagree with the finding of the Income-tax Officer.
9. The assessee has submitted that the Income-tax Officer at the time of making the impugned addition did not mention the section under which he made it nor gave him an opportunity of being heard under sections 61 and 62 of the Ordinance ibid. On account of this omission it has been stated the assessment has been rendered ab initio illegal. In support of this contention reliance has been placed on 1985 P T D (Trib.) 1978. After hearing both the parties, it is our considered opinion that absence of the charging section and similarly affording of an opportunity of being heard does not make the assessment ab initio illegal. On the other hand, in the absence of such omission this assessment was rightly set aside by the learned Commissioner of Income-tax (Appeals) to be made de novo in accordance with law and the facts of this case. In arriving at this conclusion, we have with advantage relied on a Full Bench decision of the Tribunal cited as 1986 P T D (Trib.) 73. Thereafter, by agreeing with finding of learned Commissioner of Income-tax (Appeals), we hereby dismiss assessee's appeal for the charge year 1984-85.
M.BA./1182/TAppeal dismissed.