I.TA. NO. 80/KB OF 1990-91, DECIDED ON 2ND MARCH, 1993. VS I.TA. NO. 80/KB OF 1990-91, DECIDED ON 2ND MARCH, 1993.
1993 P T D (Trib.) 1172
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Mujibullah Siddiqui, Judicial Member
I.TA. No. 80/KB of 1990-91, decided on 02/03/1993.
Income Tax Ordinance (XXXI of 1979)---
----Ss.65 & 13(1)(aa)---Once the Commissioner of Income Tax (Appeals) came to the conclusion that the addition was not sustainable in law for want of mandatory prior approval of I.A.C., he ought to have deleted the addition instead of setting aside the same with a direction for filling up the lacunas-- Duty of Commissioner while acting as Judicial Officer and as Commissioner of a zone---Distinction---Emphasized.
Abdul Tahir, I.T.P. for Appellant. Muhammad Nawaz, D.R. for Respondent.
Date of hearing: 2nd March, 1993.
ORDER
The above appeal is directed against the order, dated 26-6-1990 by the learned Commissioner of Income Tax (Appeals) Hyderabad in ITA No. 176 relating to the assessment year 1981-82.
2.Heard Mr. Abdul Tahir, ITP, learned representative for the appellant and Mr. Muhammad Nawaz, learned representative for the Department.
3. The only objection pressed is to the setting aside of assessment by the learned Commissioner of Income Tax (Appeals).
4. Briefly stated the relevant facts are that the appellant is an individual deriving income as blacksmith. His original assessment was completed as a total income of Rs.12,210. Subsequently the assessing officer received information that the appellant raised construction over a plot which he had purchased for Rs.25,000 in the assessment year 1980-81. The assessing officer, therefore, issued a notice under section 65 and reopened the assessment. The assessing officer deputed Circle Inspector for enquiry on the point of investment made in the construction. The Inspector estimated the cost of construction at Rs.100,000 while the appellant estimated the cost of construction at Rs.80,000. The appellant was, therefore, asked to explain the source of investment which he could not explain. The Income Tax Officer, therefore, held that the appellant made investment out of undisclosed sources and, therefore, added Rs.80,000 as income from undisclosed sources, to the total income originally assessee. The appellant preferred first appeal and the learned Commissioner of Income Tax (Appeals) held that the requirements of law have not been met in the sense that approval of IA.C. had not been obtained for the addition of unexplained income of Rs.80,000. The learned CIT(A) held that although the Income Tax Officer has not mentioned section 13(1) of the Income Tax Ordinance but the addition has been made under the said provision. He further held that the addition was not sustainable for want of statutory approval and, therefore, set aside the assessment order with the direction to frame fresh assessment order on merits and after following the correct legal procedure. The appellant has assailed the above direction of learned CIT(A). During the course of arguments the learned counsel for the appellant has further informed that subsequent to the setting aside of assessment order the assessing officer started re-assessment proceedings. The assessing officer was requested to adjourn the proceedings sine die and wait for the result of second appeal preferred before the Tribunal but the assessing officer did not accept the request and completed the assessment whereby the same addition was repeated with the difference that Arcs' this time prior approval was taken from the AA.C. and section 13(1)(aa) was referred under which the addition was made. The appellant again preferred first appeal before the learned Commissioner of Income Tax (Appeals), Hyderabad who dismissed the appeal vide order, dated 23-12-1992. Mr. Abdul Tahir learned counsel for the appellant has submitted that the Assessing Officer ought to have waited for the result -of second appeal and the proceedings initiated on setting aside of assessment were ab initio, illegal and without jurisdiction which may be held accordingly.
4. Mr. Abdul Tahir has submitted that once the learned CIT (A) came to the conclusion that the addition of Rs.80,000 was not sustainable in law for want of statutory approval from I.A.C. the proper course should have been the deletion of addition and not the setting aside of assessment because it amounts to giving of second opportunity to the department for filling up the lacunas. Mr. Abdul Tahir has submitted that the course adopted by the learned CIT(A) was not justified as it amounts to clear harassment to the assessee and amounts to vexing a person twice for the same cause. Mr. Abdul Tahir has submitted that the assessing officer has no jurisdiction of making addition under section 13(1)(a) without taking prior approval from the IA.C. and any addition made without recourse to the mandatory approval from IA.C. is liable to be deleted. He has submitted that the learned CIT(A) has acted improperly in providing opportunity to the department for correcting the jurisdictional error. He has further submitted that the impugned direction of the learned CIT(A) is not sustainable in law and consequently all subsequent proceedings in pursuance thereof also suffer from the infirmity on account of lack of jurisdiction (sic), One impugned finding of learned Commissioner of Income Tax (Appeals) but he is not able to rebut the contention of learned counsel for the appellant that the addition once made without jurisdiction is liable to be deleted and no second opportunity is to be provided to the department for filling up the lacunas.
5. I have carefully considered the contentions raised by the learned representatives for the parties. In the facts and circumstances of the case I am persuaded to agree with the submission of learned counsel for the appellant. It is held that once the learned CIT(A) came to the conclusion that the addition was not sustainable in law for want of mandatory prior approval of IA.C. he ought to have deleted the addition instead of setting aside the same with a direction for filling up the lacunas. It appears that the learned Commissioner of Income Tax (Appeals) could not distinguish in his duties as a judicial officer while acting as CIT(A) from the duties discharged by CIT Zones and thereby he transgressed the limits. The learned CIT(A) was performing the duty of a judicial officer in the capacity of an appellate authority but while giving the impugned direction he entered into the realm of administrative/supervisory capacity. The impugned direction of learned CIT(A), is, therefore, ,vacated being improper and unwarranted. The addition stands deleted having been made without jurisdiction. Since the impugned direction of learned CIT(A) setting aside the assessment order with the direction for filling up the lacunas has been held to be improper and unjustified, therefore, it is further held that all the subsequent proceedings taken in pursuance thereof were without jurisdiction and of no legal effect. The subsequent assessment order made by the ITO and the learned CIT(A) shall have no effect and the order of deletion of the addition hereby made shall prevail, notwithstanding the subsequent assessment order by the Income Tax Officer and confirmation thereof by the learned Commissioner of Income Tax (Appeals). The subsequent assessment order and the first appellate order being without jurisdiction are void and should be simply ignored.
6. The appeal is allowed as above.
M.BA./2414/TAppeal allowed.