(a) Income Tax Ordinance (XXXI of 1979)---

----S. 5(4)---Income Tax Act (XI of 1922), S.64(3)---Comparison and analysis of the two provisions.

(b) Income Tax Ordinance (XXXI of 1979)---

----S. 5(4)---Jurisdiction of Income Tax Officer challenged by assessee-- Income Tax Officer was not bound to refer the matter to the Commissioner or Regional Commissioner or Central Board of Revenue, as the case might be, for determining the question of jurisdiction---Income Tax Officer would not become defunct as soon as objection was raised to the jurisdiction of an Assessing Officer.

(c) Income Tax Ordinance (XXXI of 1979)---

----S. 5---Jurisdiction---Challenge to jurisdiction of Income Tax Officer by assessee--- Procedure to be adopted by Income Tax Officer detailed.

Nobody should be condemned unheard and that the right of being heard is inherent in every statute and shall be deemed to be there whether specifically enacted or not. Thus, if any assessee calls in question the jurisdiction of an Income Tax Officer he has the right to be heard which is inalienable right and cannot be taken away notwithstanding the absence of any specific provision in this behalf in a particular enactment.

If any objection is raised to the jurisdiction of an Income Tax Officer to assess any person and if the Assessing Officer agrees with the objection then he will initiate proceedings for transfer of case to the Assessing Officer having jurisdiction. If he does not agree with the objection, only then the question will arise as to which Income Tax Officer has jurisdiction to assess the assessee and in that case the Assessing Officer may refer the question himself to the Commissioner/Commissioners/Regional Commissioners for determining the same or he may stay the proceedings and ask an assessee to apply to the officer concerned for determining the question. In either case when the question of jurisdiction is pending consideration before the Commissioner/ Commissioners/Regional Commissioners the proceedings before an Assessing Officer shall be kept in abeyance. However, if the question of jurisdiction already stands determined by the authorities concerned contemplated in the Ordinance and thereafter an objection is raised to the jurisdiction of an Income-tax Officer to assess any person, in that event the Income Tax Officer shall neither become defunct nor he would be required to stay the proceedings and make reference again for determining the objection. In such eventuality the Assessing Officer shall be within his right to overrule the objection and proceed with the assessment for the simple reason that the question already stands determined.

(d) Income-tax--

----Natural justice, principle of---Nobody shall be condemned unheard; for right of being heard is inherent in every statute and shall be deemed to be there whether specifically enacted or not.

(e) Interpretation of statutes---

---- Right of being heard is inherent in every statute and shall be deemed to be there whether specifically enacted or not.

(f) Income Tax Ordinance (XXXI of 1979)---

----S. 5(4)---Jurisdiction---Objection to jurisdiction of Income Tax Officer by assessee cannot be taken in appeal before Appellate Assistant Commissioner, Income Tax Commissioner or Income Tax Appellate Tribunal as it lies exclusively within the domain of the administrative hierarchy contemplated in the Ordinance.---[1986 PTD (Trib.) 314 overruled].

(1963) 7 Tax 32 (Trib.); Rai Bahadur Seth Teomal v. CIT (1959) 36 ITR 9; Seth Kanhaitlal v. CIT (1977) 5 ITR 739; (1941) 9 ITR 25; Diyaldas Khushiram v. CIT (1943) 11 ITR 67; Wallace Bros. v. CIT (1945) 13 ITR 39; Taichar Sabai Trading Co. Ltd. v. CIT (1947) 15 ITR 455; Nund & Samont Co. v. CIT.(1976) 102 ITR 376 and, Law and Practice of Income-tax by Palkhiwala, Seventh Edn. p.779 ref.

1986 PTD (Trib.) 314 overruled.

(g) Income Tax Ordinance (XXXI of 1979)---

----S. 5(4)---Jurisdiction---Objection to "jurisdiction to assess any person" and objection to "jurisdiction in the assessment proceedings"---Distinction-- Objection to assessment of any person cannot be made subject-matter of appeal but objection in the assessment of any person can always be made subject-matter of appeal.

A distinction is always to be made between an objection to the jurisdiction to assess any person and objection to the jurisdiction in the assessment proceedings. The objection to assess any person cannot be made subject-matter of appeal but the objection to jurisdiction in the assessment proceedings can always be raised in appeal and can be entertained by the appellate authorities. In other words no objection can be raised in appeal to the effect that an Assessing Officer has no jurisdiction to assess an assessee but the objection can always be raised that while making assessment the Assessing Officer has not exercised his jurisdiction properly and, therefore, any addition to the total income etc., is not sustainable for want of jurisdiction. For example if a completed assessment is to be reopened with prior approval of IAC/CTT/RCIT or Board and no prior approval has been obtained or accorded or if an addition on account of deemed income is to be made with the prior approval of IA.C. and no such prior approval of IA.C. has been obtained or accorded the objection can always be taken that the addition is without jurisdiction and such objection shall be entertained because such objection is not related to the jurisdiction to assess any person but relates to the jurisdiction in the proceedings. Thus, objection to the assessment of any person cannot be made subject-matter of appeal but objection in the assessment of any person can always be made subject-matter of appeal.

(h) Income Tax Ordinance (XXXI of 1979)---

----S. 13(1)---Addition on account of bank deposits could be made under 5.13(1) only and with prior approval of Inspecting Assistant Commissioner.

Masood Ahmed Abbasi and Aqueel Ahmed Abbasi for Appellant.

Humayun Zaidi, D.R. for Respondent.

Date of hearing: 13th April, 1992.

ORDER

M. MUJIBULLAH SIDDIQUI (JUDICIAL MEMBER): --The first four appeals are directed against the order, dated 29-4-1986 by the learned CIT(A) Zone-II, Karachi in I.TAs. NOS.CIT(A)/Z7II/96, 97, 98, 99/83 relating to the assessment years 1976-77, 1977-78, 1979-80 and 1980-81. The last appeal is directed against the order dated 21-5-1986 by the same learned CIT(A) in ITA No. CIT(A)/Z-11/37/84 relating to the assessment year 1981-82.

2. As the issues involved are common, therefore, all the appeals are decided by this single consolidated judgment.

3. Heard M/s. Mansoor Ahmed Abbasi and Masood Ahmed Abbasi learned. Advocates for the appellant and Mr. Humayun Zaidi, learned representative for the department.

3. The first common objection raised by the appellant is that, once the jurisdiction of ITO Companies Circule B-5 was challegend by the appellant/assessee, the ITO was under a legal duty to refer the matter to the Commissioner of Income Tax, Central Zone-B under whom he exercises jurisdiction, as well as the Commissioner of Income Tax, East Zone under whom ITO R-Circle, Karachi exercises jurisdiction under whose territorial charge the appellant/assessee, in fact, fell and who was originally exercising jurisdiction over him and had conducted substantial assessment proceeding, as required under section 5(4) of the Income Tax Ordinance, 1979.

4. Briefly stated the relevant facts as stated by Mr. Masood Ahmed Abbasi are that the appellant fell in the territorial jurisdiction of ITO R-Circle, East Zone, Karachi who originally completed assessments for the assessment years 1976-77, 1977-78 and 1979-80 and with whom the returns were filed for the assessment years 1980-81 and, 1981-82. Subsequently, the cases were transferred to Special Officer/IA.C. Range-1, East Zone, Karachi. Thereafter the learned Commissioner of Income-tax East Zone, Karachi- transferred the cases to another ITO Circle XIV, East Zone, Karachi who issued notices under section 65 for the assessment years 1976-77, 1977-78 and 1979-80 reopening the assessments and notices under section 61 for the assessment years 1980-81 and 1981-82. The proceedings were conducted at great length and the evidence was recorded by ITO Circle XIV, East Zone, Karachi whereafter the case was again transferred to ITO Companies Circle B-5, Karachi on 21-5-1983. According to Mr. Masood Ahmed Abbasi the objection was raised to the jurisdiction of ITO Companies Circle B-5, Karachi, vide letter, dated 4-6-1983. It is further contended that issue of the jurisdiction was questioned before ITO Circle B-5, Karachi and submission to the jurisdiction was made under protest. 1t is further maintained that the ITO did not consider the objection raised to his jurisdiction and without referring the same for adjudication to the Commissioner of Income-tax, Zone-B, Karachi as well as Commissioner of Income-tax, East Zone, Karachi the ITO Circle B-5, Karachi, proceeded with the assessments and thus the assessment orders so passed are nullity in law for non-compliance of provision contained in subsection (4) of section 5 of the Income Tax Ordinance, 1979. Mr. MA. Abbasi has specifically referred to the letter of appellant, dated 4-6-1983 alleging that the objection to the jurisdiction of ITO was taken vide this letter, therefore, it is reproduced below for the sake of convenience: --

"The Income-tax Officer,

Companies Circle B-5,

Karachi.

Sir,

Subject: Submission in the matter of Kashmir International Express: Assessment Years 1976-77 and 1980-81.

The assessee is shocked and surprised to learn that his case is being transferred from one officer to the other every now and then and he is being subjected to Rigorous Assessment Proceedings punitively, vindictively and mala fide.

On transfer of the case from the OSD holding jurisdiction as a special case in this matter to the ITO Circle XIV, the assessment proceedings were conducted at great length and after the entire investigation by this ITO was summed up, verification of receipts of the assessee from different persons and resources was made. In that process, all the summons were issued were duly complied with by the witnesses cited by the assessee. Only an individual, namely Raja Muhammad Siddiq, having since gone abroad from his village town was not available then to the ITO as per his letter, dated 27-5-1982. On assessee's submissions in his letter, dated 26-6-1982, the' learned ITO was pleased to forward another summon to that person to whom it was re directed from his village town, to Jedda where he has since been residing. The reply of this person was also duly received in the office of the ITO Circle XIV on 23-6-1982 under inward 2090, as on enquiries, it was revealed to the assessee.

That so far as the assessee was concerned the assessment proceedings had come to end and closed, and the assessment orders had to be framed and finalised. The assessee was expecting to receive the assessment orders. Instead the assessee has received notices issued by you alongwith the letter intimating.

It may once again be placed on record that in spite of repeated requests/demands for the return of one file appearing on serial No.5 of the Inventory of seizure of books by the Inspector of the then IAC, OSD, and return inventory made by him dated 29-9-1981 has not yet been returned to him and thus a very valuable document/file is being withheld without any basis, jurisdiction or reasons. Kindly arrange to return the said documents/tile, which the assessee urgently requires for his own purposes.

It may further be submitted that the assessee relies on all the submissions that have already been made at great length and are available on your file, for the purposes of the assessments for the aforesaid years. Kindly finalize the assessments accordingly. The assessee, unless confronted with any other/more adverse evidence, has nothing more to submit in this case.

Thanking you.

Yours faithfully

For Kashmir International Express."

5. The learned CIT(A) has decided question of jurisdiction as follows:

"However, after verification of the facts and also taking into consideration Central Board of Revenue's jurisdiction order passed under clause (b) of subsection (1) of section 5 of the Income Tax Ordinance, 1979 vide C. No.55 (2)IT/2/83.PT-1, dated 25-4-1983 whereby the case of Kashmir International Express, Hasrat Mohani Road, Karachi was assigned to the CIT Central Zone-B, Karachi and subsequently the CIT Central Zone-B's Order No.Jud.8(1)/CZB/82 83/3405, dated 15-5-1983 based on the Central Board of Revenue's order under the provisions of clause (b) of subsection (1) of section 5 whereby the said case was assigned to the ITO Companies Circle B-5, I find that the question of jurisdiction is a decided matter and the issue as raised by the learned counsel in the written arguments and as raised in the grounds of appeal by the assessee on this point are frivolous and without any basis. Therefore, keeping in view the two jurisdiction orders as mentioned above I find that the ITO has acted rightly in completing the assessments and the appellant's claim on this issue of jurisdiction cannot be accepted."

6. Mr. Masood Ahmad Abbasi, learned counsel for the appellant has contended that the Income-tax Ordinance, 1979 is a self-contained statute wherein exhaustive machinery has been provided in respect of every matter arising in connection with the assessment, appeal, jurisdiction of assessing authority and appellate authorities etc. He has contended that section 5 of the Income-tax Ordinance, 1979 contains the provisions relating to jurisdiction of Income-tax authorities and further provide the procedure of conferring the jurisdiction on assessing officer. It also specifies authority vested with the power of transfer of cases, the procedure for raising objection if any to the jurisdiction of assessing officer and the authorities empowered to decide the issue. He has further maintained that section 5 of the Income Tax Ordinance, 1979 dealing with the jurisdiction if income-tax authorities should be read with the provisions contained in Chapter VII of the Income Tax Ordinance, 1979 (section 65 to section 67) and further with Chapter XIII of the Income-tax Ordinance, 1979 containing provisions regarding appeals and revisions (section 129 to section 138). Elaborating his point of view Mr. Abbasi has contended that if an assessee has taken any objection to the jurisdiction of an assessing officer in accordance with the provisions contained in section 5 of the Income Tax Ordinance, 1979 and the assessing officer ignores the provisions contained in section 5 of the Ordinance in this behalf or acts contrary to the provisions contained therein and proceeds to finalize the assessment under the relevant section contained in Chapter VII of the Income Tax Ordinance, 1979 dealing with the procedure of assessment then the issue of jurisdiction should be deemed to be an issue forming part of the assessment proceeding, thereby giving aright to an assessee to raise objection to the question of jurisdiction before the appellate authorities empowered to hear and adjudicate upon the appeals under Chapter XIII of the Income Tax Ordinance, 1979. Advancing his arguments further Mr. Masood Ahmed Abbasi has submitted that after receiving notice from Income-tax Officer, Companies Circle B-5, Karachi and coming to know about the transfer of case to him an objection was raised to the jurisdiction of Income-tax Officer, Companies Circle B-5, Karachi, vide letter, dated 4-6-1983 and thereafter submission was made to his jurisdiction under protest. Mr. Masood Ahmad Abbasi has vehemently argued that as soon as objection was raised to the jurisdiction of Income-tax Officer, Circle B-5, Karachi, he was estopped from exercising jurisdiction and he was bound to refer the question of jurisdiction to the Commissioner of Income-tax, Central Zone-B, Karachi under whom he was exercising jurisdiction as well as the Commissioner of Income-tax East Zone, Karachi under whom Income-tax Officer, R-Circle, Karachi was exercising jurisdiction and under whose territorial charge the appellant/assessee fell. Mr. Abbasi has contended that as the Income-tax Officer failed to have recourse to such provision contained in section 5(4) of the Income Tax Ordinance, 1979 and proceeded to finalize the assessment, therefore, the assessment so finalized was illegal, ultra vires, without jurisdiction and void and the learned Commissioner of Income-tax ought to have declared accordingly. Mr. Masood Ahmed Abbasi has further argued that if the I.T.O. would have referred the question of jurisdiction to the respective Commissioners of Income-tax and they would have decided the issue the appellant would have been debarred from raising the issue before appellate authorities. Since this has not been done, therefore, the issue can be raised in appeal before the appellate authorities. He has further conceded that an administrative hierarchy has been provided in the Income Tax Ordinance, which has been empowered to consider and decide the question of jurisdiction. Mr. Abbasi has contended that if the administrative hierarchy provided in the income-tax Ordinance exercises discretion in deciding the question of jurisdiction then the issue cannot be raised before the appellate authorities deciding the issues arising out of the assessment order on judicial side but if the procedure provided in section 5 of the Income-tax Ordinance, 1979 is not adhered to then the issue can be raised in appeal. According to Mr. Abbasi as soon as the objection to the jurisdiction is raised the ITO becomes defunct until and unless a reference made by him on the question of jurisdiction is decided by the higher authorities empowered in this behalf under the Ordinance. He has submitted that similar provisions were contained in section 64 of the (repealed) Income-tax Act, 1922 wherein it was provided in third proviso to section 64(3) that "if the place .of assessment is called in question by an assessee the ITO shall, if not satisfied with the correctness of the claim, refer the matter for determination under this subsection before assessment is made:" Mr. Abbasi has further referred to the provisions contained in subsection (3) of section 64 of the Income Tax Act, 1922 which provided that "where any question arises under this section as to the place of assessment, such question shall be determined by the Commissioner, or, where the question between places in areas within the jurisdiction of more Commissioners than one, by the Commissioners concerned, or, if they are not in agreement, by the Central Board of Revenue:" Mr. Abbasi has proceeded on to argue that the provisions contained in section 5 of the Income Tax Ordinance, 1979 are similar to the provisions contained in section 64 of the (repealed) Income-tax Act, 1922 and more particularly subsection (4) of section 5 is in pari materia to the provisions contained in subsection (3) of section 64 of the Repealed Income-tax Act, 1922. He has drawn our attention to subsection (4) of section 5 of the Income Tax Ordinance, 1979 which reads as follows:

"Where a question arises as to whether an Income Tax Officer has jurisdiction to assess any person, the question shall be determined by the Commissioner, or where the question is one relating to the jurisdiction of different Commissioners, by the Regional Commissioner or Regional Commissioners concerned and, if they are not in agreement, by the Central Board of Revenue."

7. Mr. Abbasi has conceded that third proviso to subsection (3) section 64 calling upon the I.T.O. to refer the matter for determination to the Commissioner or Central Board of Revenue, as the case may be, for determination of the question of jurisdiction if he was not satisfied with the correctness of claim, has been omitted in the Income Tax Ordinance, 1979, but the provisions contained in the omitted proviso are still to be read as part and parcel of subsection (4) of section 5 of the Income Tax Ordinance, 1979. The learned D.R. has submitted that the objection to the jurisdiction cannot be raised in appeal as it lies within the exclusive domain of the administrative hierarchy provided in the Income Tax Ordinance, 1979. During the course of arguments attention of Mr. Abbasi was drawn to various authorities from the Indian jurisdiction on the point that the objection to the jurisdiction cannot be raised in appeal. Mr. Masood Ahmed Abbasi stated during the course of arguments that he entirely agrees with the ratio laid down by the Supreme Court of India in the case of Rai Bahadur Seth Teomal v. C.I.T. (1959) 36 I.T.R. 9 wherein it has been held that no appeal in regard to the objection to the place of assessment is contemplated under the Income-tax Act, 1922 and that it lies exclusively within the domain of the administrative hierarchy provided in the Act and no other authority is contemplated. However, Mr. Abbasi has submitted that a Single Bench of this Tribunal sitting at Lahore has decided the question, of jurisdiction in the judgment reported as 1986 PTD (Trib.) 314 and, therefore, according to Mr. Abbasi the prevailing view in Pakistan is that the question of jurisdiction can be raised in appeal before the appellate authority.

8. We have carefully considered the contentions raised by the learned representatives for the parties. First we would like to examine the factual aspects of the matter and thereafter we will dilate on the legal issue, if an assessee can raise the question of jurisdiction to assess any person before .the appellate authorities, meaning thereby if the first appellate authority (AA.C./C.I.T (A) ) and the second appellate authority (Income Tax Appellate Tribunal) have jurisdiction to entertain the question of jurisdiction of an assessing officer to assess any person. Coming to the factual aspect of the issue we find that Mr. Masood Ahmed Abbasi has specifically referred to his letter dated 4-6-1983 contending that objection to the jurisdiction of I.T.O: Companies Circle B-5, Karachi was taken through his letter. The contents of the said letter have been reproduced in earlier part of this order and -a perusal thereof shows that no such objection has been raised by the appellant to the jurisdiction of I.T.O Companies Circle B-5, Karachi. A perusal of the said letter shows that the appellant has merely expressed his grievance to the transfer of 'case from one assessing officer to another assessing officer. Except the grievance that the transfer of case every now and then has subjected the appellant to "rigorous assessment proceedings punitively, vindictively and mala fide", .no specific objection has been raised to the jurisdiction of I.T.O Companies Circle B-5, Karachi to assess the appellant. On the other hand, the last para. of the said letter shows that the appellant has submitted to the jurisdiction of I.T.O. Companies Circle B-5, Karachi, without any protest and has prayed for finalization of assessments. The relevant para of the letter reads as follows:

It may further be submitted that the assessee relies on all the submissions that have already been made at great length and are available on your file. For the purpose of the assessments for the aforesaid years, kindly finalize the assessments accordingly. The assessee unless confronted with any other/more adverse evidence has nothing to submit in this case."

9. It is abundantly clear from the above request of the appellant to the I.T.O Companies Circle B-5, Karachi that he raised no objection to the jurisdiction to assess him and as such the contention raised by Mr. Masood Ahmed Abbasi that as soon as objection was raised by the appellant to the jurisdiction of the assessing officer he ceased to have authority to proceed with the assessment and became defunct and that he ought to have referred the issue to the respective Commissioners for determination and that no adherence to such procedure has rendered the assessments ultra vires, illegal and void, are not maintainable in fact. The entire edifice of arguments built by Mr. Masood Ahmed Abbasi falls to the ground like nine pins as no objection to the jurisdiction of I.T.O. is contained in the, appellant's letter dated 4-6-1983 and as such all the objections raised by Mr. Abbasi in this behalf are without substance, in the facts and circumstances of the present case.

10. In addition to the fact that no objection was raised by the appellant before the assessing officer in respect of the jurisdiction to assess the appellant, we find from the order of learned C.I.T.(A) that the question about the jurisdiction of I.T.O. Companies Circle B-5, Karachi could not arise as it stood already determined by the- Central Board of Revenue itself.

11. Now we advert to the point if the question of jurisdiction can be raised in appeal. Since Mr. Masood Ahmed Abbasi has contended that the provisions contained in subsection (3) of Section 64 of the (Repealed) Income-tax Act. 1922 and subsection (4) of section 5 of the Income Tax Ordinance, 1979 are similar, therefore, for the sake of convenience the above provisions are reproduced below: --

"Section 64(3), Income-tax Act. 1922.--Where any question arises under this section as to the place of assessment, such question shall be determined by the Commissioner or, where the question is between places in areas within the jurisdiction of more Commissioners than one, by the Commissioners concerned. or if they are not in agreement, by the Central Board of Revenue:

Provided that, before any such question is determined, the assessee shall have had an opportunity of representing his views:

Provided further that the place of assessment shall not be called in question by an assessee if he has made- a return under subsection (1) of section 22 and has stated therein the principal place wherein he carries on his business, profession or vocation, or if he has not made such a return shall not be called in question after the expiry of time allowed by the notice under subsection (2) of section 22 or under section 34 for the making of a return:

Provided further that if the place of assessment is called in question by an assessee the Income Tax Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under this subsection before assessment is made.

Section 5(4), Income Tax Ordinance. 1979; -Where a question arises as to whether an Income Tax Officer has jurisdiction to assess any person, the question shall be determined by the Commissioner, or where the question is one relating to the jurisdiction of different Commissioners, by the Regional Commissioners or Regional Commissioner concerned and, if they are not in agreements, by the Central Board of Revenue."

12. A comparison of the above provisions shows that the provisions contained in subsection (4) of section 5 of the Income Tax Ordinance, 1979 are substantially same to the provisions contained in main subsection (3) of section 64 of the Repeal Income-tax Act, 1922, with the difference that in subsection (3) of section 64 of the Repealed Income-tax Act, 1922 the expression used is "place of assessment" and in subsection (4) of section 5 the expression used is "jurisdiction to assess any person". The purpose of both the expressions is same. However, it has been made more explicit and clear in the Ordinance. Further, we find that all the three provisos to subsection (3) of section 64 in the Repealed Income-tax Act, 1922 have been omitted while enacting subsection (4) of section 5 of the Income Tax Ordinance, 1979. Second proviso to subsection (3) of section 64 of the Repealed Income-tax Act, 1922 has been re-enacted as subsection (5) of section 5 of the Income Tax Ordinance, 1979, but first proviso and third proviso have been omitted and have not been re-enacted anywhere else in the Ordinance. So far the omission of first proviso to the effect that before any such question is determined, the assessee shall have. had an opportunity of presenting his views is concerned it is not very much material because of the established principle of law that nobody should be condemned unheard and that the right of being heard is inherent in every statute and shall be deemed to be there whether specifically enacted or not. Thus, if any assessee calls in question the jurisdiction of an Income Tax Officer he has the right to be heard which is. inalienable right and cannot be taken away notwithstanding the absence of any specific provision in this behalf in a particular enactment. Further, we are unable to agree with the contention of Mr. Masood Ahmed Abbasi that notwithstanding the omission of third proviso to subsection (3) of section 64 of the repealed Income-tax Act, 1922, it should be read in its entirety as a part and parcel of subsection (4) of section 5 of the Income-tax Ordinance, 1979. Thus, we do not find any force in the contention of Mr. Masood Ahmed Abbasi that in the absence of any provision in the Income-tax, Ordinance, 1979 similar to the one contained in third proviso to subsection (3) of section 64 of the repealed Income-tax Act, 1922 the ITO is bound to refer the matter to the Commissioner, or Commissioners or Regional Commissioner or Central Board of Revenue, as the case may be, for determining the question of jurisdiction. We are also unable to agree with the contention that as soon as objection is raised to the jurisdiction of an assessing officer, he becomes defunct because it was not the position even under the repealed Income-tax Act, 1922 as it was provided in the third proviso to subsection (3) of section 64 of the repealed Income-tax Act, 1922 that if ITO is not satisfied with the correctness of the claim of an assessee in respect of the place of assessment when it is called in question he will refer the matter for determination under this subsection before assessment is made. It meant that if an objection was raised, in the fist instance it was to be considered by the assessing officer and if he is satisfied with the correctness of the claim he may initiate proceedings for the transfer of case and in case he is not satisfied then he should state his reasons for his non-satisfaction and refer the matter for determination to the officer/officers concerned. The similar situation prevails under the Ordinance. If any objection is raised to the jurisdiction of an Income Tax Officer to assess any person and if the assessing officer agrees with the objection then he will initiate proceedings for transfer of case to the assessing officer having jurisdiction. If he does not agree with the objection only then the question will arise as to which Income Tax Officer has jurisdiction to assess an assessee and in that case the assessing officer may refer the question himself to the Commissioner/Commissioners/Regional Commissioners for determining the same or he may stay the proceedings and ask an assessee to apply to the officer concerned for determining the question. In either case when the question of jurisdiction is pending consideration before the Commissioner/Commissioners/Regional Commissioners the. proceedings before an assessing officer shall be kept in abeyance. However, if the question of jurisdiction already stands determined by the authorities concerned contemplated in the Ordinance and thereafter an objection is raised to the jurisdiction of an Income-tax Officer to assess any person in that event the Income Tax Officer shall neither become defunct as contended by Mr. Masood Ahmed Abbasi nor he would be required to stay the proceedings and make reference again for determining the objection. In such eventuality the assessing officer shall be within his right to overrule the objection and proceed with the assessment for the simple reason that the question already stands determined.

13. Now we come to the point, which has been argued vehemently by Mr. Masood Ahmed Abbasi. The point relates to the jurisdiction of first appellate authority and the. Income Tax Appellate Tribunal for entertaining the objection of jurisdiction to assess any person. As already observed Mr. Masood Ahmed Abbasi has submitted that the issue can be raised in appeal before the first appellate authority and the Income-tax Appellate Tribunal. In support of his contention he has placed reliance on a Single Bench judgment of this Tribunal reported as 1986 PTD (Trib.) 314. It has been held in the above judgment by the learned Single Member of this Tribunal as follows: --

"The contention of the learned Departmental Representative has no force. Subsection (5) has to be read alongwith subsections (3) and (4). Subsection (3) provides the area of jurisdiction of an Income-tax Officer. Subsection (4) lays down that where a question arises as to whether an Income Tax Officer has jurisdiction to assess a person or not, the question has to be referred to the Commissioner, where the question relates to the jurisdiction of different Commissioners then the question is to be decided by the Regional Commissioner and if two Regional Commissioners do not agree then by the C.B.R. It is in this context that subsection (5) has to be read. It only means that question in regard to the territorial jurisdiction as has been mentioned in subsection (4), could only be raised by the assessee before the Commissioner, Regional Commissioner or C.B.R. as the case may be, only be one filing the return. This bar on the assessee is therefore only where he wanted to raise question of jurisdiction before the Commissioner, Regional Commissioner of -C.B.R. This bar cannot be said to be applicable when the assessee raised this question in appeal before an appellate authority. Obviously if an assessing officer has no jurisdiction to make an assessment, such jurisdiction cannot be conferred by the assessee merely by filing a return nor the appellate authority can be debarred from determining as to whether the Income-tax Officer had jurisdiction to make an assessment or not. If another interpretation is made that would lead to chaos. In that case any Income-tax Officer would assess any assessee whether falling under his jurisdiction or not. An ordinary assessee would not normally know as to whether the Income-tax Officer who had issued the notice had the jurisdictions in his case or not. Where the jurisdictions of the Income-tax Officer are changed every now and then it is very difficult for an ordinary assessee to know as to whether that particular Income tax Officer had in fact jurisdiction to issue notice to the assessee to file a return."

14. In the above judgment the learned Single Member came to the conclusion that the ITO had no jurisdiction to make an assessment and, therefore, his order was without jurisdiction which was annulled. Mr. Masood Ahmed Abbasi stated that there was no other judgment on the issue by the Tribunal or the superior Courts in Pakistan. He, therefore, urged that the view held by the learned Single Member should be followed. However, we have been able to lay hand on at an earlier Division Bench judgment of this Tribunal sitting at Lahore reported as (1963) 7 Tax 32 (Trib.). A preliminary objection was raised before the learned Members of Division Bench relating to the jurisdiction of the assessing officer. It was contended that the question of jurisdiction goes to the very root of the matter, therefore, assessment made by an officer who was not authorised to make the assessment is bad in law and should be annulled. It was contended on behalf of the department that no specific objection as to jurisdiction was raised before the Income-tax Officer and it could not be raised before the AA.C. or the Tribunal. In this connection 'reliance was placed on the decision of the Supreme Court of India in the case reported as Rai Bahadui Seth Teomal v. C.I.T. (1959) 36 ITR 9, wherein it was laid down that the question of determination as to the place of assessment only arises if an objection is taken by the assessee and the Income Tax Officer has any doubts in the matter, but the determination is to be made by the Commissioner or the Central Board of Revenue as the Act does not contemplate any other authority for this purpose. The learned Members of the Division Bench refused to entertain the objection by placing reliance on an unreported judgment of this Tribunal. The relevant finding of the, Division Bench is reproduced below: --

"This point also came up for consideration before the Tribunal in a case (MA.No.9 of 1959-60 unreported) and the Tribunal held that the objection has to be made before the Income-tax Officer so that he can proceed in the manner prescribed by the section. It also held that an objection as to the place of assessment cannot be, taken in an appeal to the Appellate Assistant Commissioner or before the Tribunal as the scheme of the Act shows for that no appeal in regard to the objection to the place of assessment is contemplated under the Act. It is thus manifestly clear that we are precluded under the law to entertain this objection even if it were otherwise tenable inasmuch as the Act contemplates authorities other than the Appellate Assistant Commissioner or the Tribunal for this purpose. The objection is ill conceived and is overruled."

.15. Before coming to the above conclusion the learned members of the Division Bench had considered the provisions contained in section 64 of the repealed Income-tax Act, 1922. Mr.Masood Ahmed Abbasi, learned counsel for the appellant conceded during the course of arguments that the provisions contained in subsection (3) of section 64 of the Repealed Income-tax Act, 1922 and subsection (4) of section 5 of the Income Tax Ordinance, 1979 are similar. Thus, the view taken by Division Bench of this Tribunal cited above which refers to an unreported judgment of the Tribunal also is binding on us and we respectfully follow the same. It appears that as Mr. Masood Ahmed Abbasi was not able to lay hand on the earlier judgment of this Tribunal on the issue, similarly the learned representatives for the parties appearing before learned Single Member of this Tribunal could not lay hand on the earlier judgments of this Tribunal referred by us and, therefore, the learned Single Member could not have the benefit of the view earlier held by the Division Bench of this Tribunal. We are certain that if the earlier Division Bench order of this Tribunal would have been brought to the notice of learned Single Member who passed the order reported as 1986 PTD (Trib.) 314, he too would have followed the earlier view held by this Tribunal. As a Division Bench of this Tribunal has decided the issue as long back as the year 1962 holding that the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal are precluded under the law to entertain the objection relating to the jurisdiction of an Income Tax Officer, as the Act contemplates authorities other than the Appellate Assistant Commissioner or the Tribunal for this purpose with which we also respectfully agree, the view held subsequently in the Single Bench judgment on which Mr. Masood Ahmed Abbasi has placed reliance does not contain the correct view and is hereby overruled.

16. The point in issue has been decided in a number of cases by superior Courts in Indian jurisdiction and we would like to cite some judgment in this behalf in support of the view taken by us while agreeing with the Division Bench judgment of this Tribunal cited supra. The point in issue came for consideration before High Court of Allahabad in the case of Seth Kanhaitlal v. CIT (1977) 5 ITR 739). After a detailed examination of section 64 of the repealed Income-tax Act, 1922 it was held as follows:

"Under section 30 of the Indian Income Tax Act an assessee has a right of appeal from an assessment made by an Income Tax Officer only as regards his liability to be assessed under the Act or as regards the amount or rate at which he has been assessed. He cannot raise an objection to the place of assessement for the first time in appeal and even if be raised such an objection in appeal, the question cannot properly be said to arise out of the appellate order of the Assistant Commissioner and there can be no reference to the High Court on the question."

17. The above view was confirmed by the Allahabad High Court again in the case of Seth Kanhairylal in the judgment reported as (1941) 9 ITR 25.

18. The point in issue came for consideration before the Bombay High Court in the case of Diyaldas Khushiram v. CIT ((1943) 11 ITR 67. It was observed by Beaumont, C.J. speaking for the Court that under section 30 of the repealed Income Tax Act, 1922 no right of appeal against the order under section 64(3) is conferred since the appeal could probably be not against an order made under section 64(3) but against the consequences following from such order. The objection was taken in this behalf before the Federal Court of India in the case of Wallace Bros. v. CIT ((1945) 13 ITR 39) and it was held as follows: --

"attempt of the assessee to raise it at a later stage after the assessement had been made. The decision in that case is conclusive as to the correct interpretation of the Act, with the result that this reference must be discharged but in the circumstances without costs."

19. The issue was considered at length by Supreme Court of India in the case of Rai Bahadur Seth Teo Mal v. CIT (1959) 36 ITR 9 and it was ultimately held as under: --

"The question then arises whether the objection as to the place of assessment, i.e. by the Income Tax Officer of Calcutta, could be challenged in appeal to the Appellate Assistant Commissioner and then before the Appellate Tribunal. In our opinion it could not be. The scheme of the Act shows what no appeal in regard to the objection to the place of assessment is contemplated under the Act. Under the proviso (iii) of section 64(3) of the Act a question as to the place of assessment. When it arises is determined by the Commissioner. Any such order cannot be made a ground of appeal to the Appellate Assistant Commissioner under section 30 of the Act which provides for appeals against orders of assessment and other orders enumerated in section 30 but no appeal is there provided against orders made un tier section 64(3). Similarly appeals to the Appellate Tribunal which lie under section 33 of the Act also do not provide for any appeal on the question of the place of assessment. In Wallace Brother's case at page 79 Spens, CJ., after referring to section 64(3) and the proviso thereto said:

These provisions clearly indicate that the matter is more one of administrative convenience than of jurisdiction and that in any event it is not one for adjudication by the Court ... ... ... ....This confirms us in the view that the scheme of the Act does not contemplate an objection as to the place of assessment being raised on an appeal against the assessment after the assessment has been made. As we have already pointed out, the objection was not raised in the present case even before the Appellate Income Tax Officer but only before the Appellate Tribunal. There is nothing in the Bidi Supply Case which in any way detracts from the efficacy of the decision of the Federal Court in Wallace Brothers' case. We have already said that Bidi Supply case deals with the vires.

It however seems to us open to serious doubt whether the appellant is entitled to raise this question at all and whether it is really a matter for decision by the Court. Clause (3) of section 64 provides that any question as to the place of assessment shall be determined by the Commissioner or by the Central Board of Revenue. The third proviso to the clause enacts that if the place of assessment is called in question by the assessee, the Income Tax Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under this subsection before' assessment is made. These provisions clearly indicate that the matter is more one of administrative convenience than of jurisdiction and that in any event it is not one for adjudication by the Court. The second proviso to clause (3) further enacts that the place of assessment shall not be called in question by an assessee if he .has made a return in response to the notice under subsection (1) of section 22 of (sic) if has not made such a return it shall not be called in question after the expiry of the time allowed by the notice for the making of a return. This confirms us in the view that the scheme of the Act does not contemplate an objection as to the place of assessment being raised on an appeal against the assessment after the assessment has been made."

20. The issue came for consideration before Patna High Court in the case of Talchar Sabat Trading Co. Ltd. v. CIT ((1947)15 ITR 455). The Patna High Court while following the dictum laid down by the Federal Court of India in the case of Wallace Brothers v. CIT (cited supra) held as follows:

"It was pointed out by the Faderal Court in Wallace Brothers v. Commissioner of Income tax, Bombay Sindh and Balochistan, that the provisions of section 64 indicate that the question as to who shall make a particular assessment is one of administrative convenience and not of jurisdiction, and that it is not one for adjudication by the Court. It was observed that the scheme of the Act did not contemplate an objection as to the place of assessment being raised on appeal against the assessment case. No objection to the place of assessment or to the assessing officer was raised before the Income-tax Officer, and the Court overruled the (sic) section 5(7A).

In this view of the matter the question as to the place of assessment does not arise out of the order of the Income Tax Appellate Tribunal and, therefore, no question of law could be referred nor could the High Court make such order under section 66 (2). In our opinion, the High Court rightly dismissed the appellant's application for directing the case to be stated under section 66(2) of the Act."

21. During the course of arguments Mr. Maseod Ahmed Abbasi contended that if we take the view that the objection to the jurisdiction to assess any person cannot be entertained in appeal then and aggrieved person shall be left without any relief. This point was raised before Patna High Court in the case of Nund and Samont Co. v. CIT (1976) 102 ITR 376. The Honourable Judges of Patna High Court followed the dictum laid down by the Supreme Court of India in the case of Seth Teomal v. CIT and dealt with the question about the remedy available to an assessee if an assessing officer either refuses to refer the question to the Commissioner or the Commissioner refused to determine the correct place of assessment in the following manner: --

"But that as it may, the contention of the learned counsel for the assessee that the nature of the objection raised before the Tribunal was not with regard to a matter of the place of assessment but with regard to the inherent lack of jurisdiction of the assessing officer is wholly fallacious. Both in form and in substance the grievance of the assessee is that its income ought not to have been assessed by the Income tax officer, Special Circle, Ranchi, but by the Income tax officer. Ward A, Hazarribagh. This is certainly, in my opinion, a challenge with regard to the place of assessment. The question then arises as to whether this point is now well-settled by the decisions of the Supreme Court to one of which I shall presently refer. In the case of Seth Teomal v. Commissioner of Income Tax the Supreme Court laid down that under section 64(3) of the Act the question of determination as to the place of assessment only arise if an objection was taken by the assessee and the Income-tax officer had any doubt as to the matter, but such a determination was to be made by the Commissioner of Income-tax or the Central Board of Revenue: the Oman Act did not contemplate any other authority. It was further held at page 17:

The question then arises whether the objection as to the place of assessment i.e. by the Income-tax Officer of Calcutta, could be challenged in appeal to the Appellate Assistant Commissioner and then before the Appellate Tribunal. In our opinion it could not be. The scheme of the Act shows that no appeal in regard to the objection to the place of assessment is contemplated under the Act. Under proviso (iii) of section 64(3) of the Act- a question as to the place of assessment, when it arises, if determined by the Commissioner. Any such order cannot be made a ground of appeal to the Appellate Assistant Commissioner under section 30. of the Act which provides for appeals against orders of assessment and other orders enumerated in section 30 but no appeal is there provided against orders made under section 64(3). Similarly, appeals to the Appellate Tribunal which lie under section 33 of the Act also do not provide for any appeal on the question of the place of assessment."

It would thus be seen that the matter with regard to the place of assessment has been held by the Supreme Court to be absolutely without the purview of the Appellate Court in the scheme of the Act. Cases may arise in which an objection to the place of assessment is taken before the assessing officer and he either refused to refer to the Commissioner or such a reference having been made the Commissioner refused to determine the correct place of assessment. In such cases, of course, in exercise of powers not under the Income-tax Act but under the Constitutional provisions this Court may be invited to interfere. But one thing which has been set at rest is that the objection with regard to the place of assessment cannot be the subject-matter before the Appellate Court which is concerned with the legality and propriety of the assessment order".

22. We are fortified in our views with the opinion held by Palkhiwala in this behalf. In his Law and Practice of Income-tax, Seventh Edition at page 779 Mr.Palkhiwala has observed as follows:

"The question as to whether an .I.T.O has jurisdiction within this section to assess any person, cannot be the subject-matter of appeal the appellate authorities are not competent to decide the question as to the I.T.O's. jurisdiction. Such a question is to be decided by the Commissioner or the Board."

23. The above observation has been made by Mr. Palkhiwala in his Commentary of section 124 of the Indian Income-tax Act, 1961. Subsections (4), (5) and (6) of section. 12A of the Indian Income-tax Act, 1961 are similar to subsection (3) of section 64 of the Repealed Income-tax Act, 1922 and the relevant provisions contained in section 5, subsections (4) and (5) of the Income Tax Ordinance, 1979. It is her observed by Mr.Palkhiwala on page 782 of the 7th Edition of his `Law and Practice of Income-tax' that the question of jurisdiction is to be decided by the Commissioner or the Board and not by the authorities or the Court on a reference. He is further of the view that if the decision of the Commissioner or Board is vitiated by an error on the face of the record it can be corrected by the High Court by an appropriate writ direction under Article 226 of the Constitution. Thus, it is abundantly clear from the resume of law as interpreted in Pakistan by this Tribunal and in India by the superior Courts that the question of jurisdiction to assess any person cannot be made subject-matter of appeal before the AA-C/C.I.T. or Tribunal and it lies exclusively within the domain of the administrative hierarchy contemplated in the Ordinance. It is, therefore, held that the objection to the jurisdiction of the I.T.O. to assess the appellant cannot be raised in appeal and this tribunal has no jurisdiction to entertain such objection and consequently the objection stands overruled.

24. Before parting with our finding on this issue we would like to clarify that a distinction is always to be made between an objection to the jurisdiction to assess any person and objection to the jurisdiction in the assessment proceeding. The objection to assess any person cannot be made subject-matter of appeal but the objection to jurisdiction in the assessment proceedings can always be raised in appeal and can be entertained by the appellate authorities. In other words no objection can be raised in appeal to the effect that an assessing officer has no jurisdiction to assess an asset but the objection can always be raised that while making assessment the assessing officer has not exercised his jurisdiction properly and, therefore, any addition to the total income etc. is not sustainable for want of jurisdiction. For example if completed assessment is to be reopened with prior approval of IA.C./C. lTR, CIT or Board and no prior approval has been obtained or accorded or if an addition on account of deemed income is to be made with the prior approval of IA.C. and no such prior approval of I.A.C. has been obtained or accorded the objection can always be taken that the addition is without jurisdiction and such objection shall be entertained because such objection is not related to the jurisdiction to assessee any person but it relates to the jurisdiction in the proceedings. Thus, objection to the assessment of any person cannot be made subject-matter of appeal but objection in the assessment of any person can always be made subject-matter of appeal.

25. The next common objection is to the confirmation of addition made under section 13 of the Income-tax Ordinance, 1979. Mr. Masood Ahmed Abbasi, learned counsel for the appellant has contended that it is admitted legal position that the additions under section 13(1) (aa) to (e) cannot be made without prior approval of the I.A.C. He has further contended that it is also admitted fact that the additions have not been made under section 13(1)(a). He has submitted that the assessing officer has stated in the assessment order for the assessment year 1976-77 that the addition on account of unexplained bank deposit was being made to the total income under section 13(1)(a) with the prior approval of IA.C. but in fact he has not obtained any prior approval. Mr. Abbasi has further contended that since the I.T.O did not obtain any prior approval, therefore, he intentionally omitted to refer the relevant provision of section 13 in the assessment orders for the assessment years 1977-78, 1979-80 and 1980-81 and merely observed that the addition was being made on account of concealed income although the nature of addition is same as in assessment year 1976-77, to wit, representing the bank deposits. Mr. Masood Ahmed Abbasi has submitted that the commission in referring the relevant provision contained in section 13(1) of the Income-tax Ordinance, 1979 does not make any difference as while examining, if mandatory requirement of law has been complied with or not the substance is to be seen and not the form or reference to a particular section of the statute. We are persuaded to agree with the contention of learned counsel. The proposition raised by Mr. Abbasi is so well established that we need not to dilate any further on this point. Even the learned D.R. could not deny the fact that the addition on account of bank deposit could be made under section 13(1) only and with prior approval of IA.C. In support of his contention that no prior approval was obtained from the IA.C by I.T.O Mr. Masood Ahmed Abbasi has produced copy of the comments by the I.T.O submitted before the C.I.T(A) on 19-2-1986. The relevant statement of the I.T.O reads as follows: -

"1976-77: --The grounds relating to not obtaining prior approval of the I.A.C for making additions under section 13(1)(aa) of the Income Tax Ordinance, is not correct. The draft assessment order was submitted to the IA.C on 25-6-1983 for his approval. The IA.C directed that since he had no time, the assessment should be completed on my own responsibility. The assessment has accordingly been completed by me and the submission of draft to the IA.C, amounts to his approval."

26. We have examined the record also with the assistance of learned D.R. The letter of I.A.C is available on record which has been referred in the comments of I.T.O. A perusal of the letter shows that the IA.C. did not accord approval for addition for the reason that he had no time and thus, the learned D.R. had no option but to concede that no prior approval was accorded by the I.A.C. The same position prevails for the assessment years 1977-78, 1979-80 and 1980-81. Since mandatory requirement of prior approval from the I.A.C. for making addition under section 13(1)(aa) to (e) has not been complied with, therefore, the addition made in the assessment years 1976-77, 1977-78, 1979-80 and 1980-81 on account of bank deposits is not sustainable in law and is hereby deleted.

27. So, far the assessment year 1981-82 is concerned, the facts are different although Mr. Abbasi took plea that no prior approval was accorded by I.A.C. in the assessment year 1981-82 as well but on perusal of record his contention is belied. Both the approvals as required under the law are available on record and Mr. Masood Ahmed Abbasi was given opportunity to examine the record himself. After perusal of record he was left with no other option but to concede that the two prior approvals as required under law are available on record. The objection relating to non-obtaining, of prior approval for making addition in the assessment year 1981-82 is, therefore, repelled.

28. Since the mandatory requirement of law has been complied with in the assessment year 1981-82, therefore, we will advert to the facts and merits of the. case in this assessment year. The I.T.O. has dealt with the issue elaborately and, therefore, for the sake of convenience the relevant finding in the assessment order is reproduced below: --

"The assessee is maintaining following bank account:--

(1) M.C.B Unitower Branch.

(2) U.B.D. Farid Chambers.

(3) H.B.L Finlay House Branch.

Bank statements were obtained under section 144(c) of the Income tax Ordinance, 1979 and during the income year following deposits were found: -

The assessee was asked to explain the nature of this deposit vide this office notice under section 62 dated 31-5-1984. The assessee vide his letter filed on 5-6-1984 stated that:

(1) The cash deposit in M.C.B. represents cash receipt from emigrants and paid onward to M/s. Jet Travels, Hotel Imperial, Tamizuddin Khan Road, Karachi for purchase of Air Tickets for emigrants from July, 1980 to June, 1981. In support of this contention the counsel for the assessee filed original copies of Bills of Jet Travels. The total payment made to Jet Travels worked out to Rs.2,42.611. Thus, the excess of deposit over payment worked out as under: --

It is explained that deposits in the UBL and Habib Bank Ltd. relate to deposit of sums of service commission for recruiting 127 emigrants @1,450 per emigrant received through bank draft from emigration department. The total deposits in the two banks are as under:-

The excess of deposits over expenditure was not explained and the counsel of the assessee Mr. Masood Ahmed Abbasi stated that the proprietor was not available to submit the explanation about excess deposits. The assessee was allowed specific opportunity vide under section 62 dated 10-6-1984, which is reproduced as under: --

"BANK STATEMENT.

(1)(A) In the account maintained with Muslim Commercial Bank, Unitower Branch (A/c No.25) total deposits worked out to Rs.5,00,895. It is explained in your counsel's letter that these deposits represent cash received from prospective emigrants and deposited in that A/c. Further, the withdrawals are stated to be payment made to M/s. Jet Travels Hotel Imperial, Karachi in respect of purchase of Air Tickets for emigrants. You have submitted the original bills of jet Travels. On examination, it is found that the total deposits in the above account works out to Rs.5,00,895 whereas the payment made to Jet Travels works out to Rs.2,42,611. Therefore, the balance of Rs.2,58,284 has not been explained.

(B) In the UBL Farid Chamber Accounts No.3646 there is deposit of Rs.37,700. You have not stated the source of the deposit in this account. You are required to furnish documentary evidence in support of these deposits.

(C) In the Habib Bank Ltd., Finlay House Branch total deposits works out to Rs.1,54,350. In the explanation submitted by your counsel on 3-6 1984 it is stated that these deposits represent service Commission for recruiting 127 emigrants @ 1,450 received through Bank drafts. You are required to please submit pay-in-slip books in support of your contention. In the Wealth statement filed as at 30-6-1981 declaring total wealth of Rs.25,000 you have failed to show following bank balances as at 30-6-1981.

Please explain why this amount should not be treated as income concealed."

The assessee on 16-6-1984, applied for adjournment as the proprietor of the concern was in Azad Kashmir and the counsel for the assessee was confined to bed. The case was accordingly adjourned to 17-6-1984 with a specific request that no further adjournment should be sought as the assessments are becoming timebarred. Again on 17-6-1984 a letter dated 17-6-1984 was received requesting for extension of l0 days on the ground that the proprietor is till away from Karachi and that counsel of the assessee is not available and he is confined to bed. The adjournment however was refused as sufficient time was allowed in the past and since the assessments are becoming timebarred, the assessee was informed that the details required vide this office notice under section 62 dated 10-6-1984 may be submitted by close of office hours. The assessee did not comply with the provision of this office notice under section 62 of the Income-tax Ordinance dated 10-6-1984 and could not explain the excess of amount deposited in the Bank as discussed above. Therefore, the assessee was found to be owner of money which was not explained satisfactorily and also not recorded in the wealth statement filed. The excess amount of Rs.2,58,284 + 7,900 = 2,66,184 is therefore treated as income deemed under section 13(1)(c) of the Income-tax Ordinance. Permission of JAC Range-II, Central Zone-B, Karachi was obtained to treat the excess deposits which remained unexplained as income deemed under section 13(1)(c) of the Income-tax Ord. and inclusion of an amount of Rs.2,66,184 as deemed income for assessment year 1983-84."

29. After conceding to the fact that two prior approvals of IAC are available on record Mr. Masood Ahmed Abbasi contended that no proper opportunity was afforded to the appellant for explaining the bank deposits. A perusal of the assessment order reproduced above shows that the contention is not correct. Mr. Masood Ahmed Abbasi has stated that assessment proceedings for the assessment year 1981-82 started on 8-9-1983 and were concluded on 25-6-1984. The appellant was afforded more than one opportunities for explaining excess of deposits over payments but no satisfactory explanation was submitted. A perusal of record shows that the assessing officer has afforded full opportunity to the appellant for submitting explanation and, therefore, there is no substance in the contention that no proper opportunity was afforded to the appellant. The objection is therefore, overruled. Mr. Masood Ahmed Abbasi submitted that in the interest of justice the addition may be set aside giving further opportunity to the appellant for explaining the excess of deposits over the payments. In spite of the fact that the appellant was afforded maximum opportunity for submitting explanation and failure on his part in making compliance, we asked Mr. Masood Ahmed Abbasi to show us any evidence which he has acquired uptil now and which he wants to produce before the assessing officer, so that we are satisfied that if addition is set aside it would not be an exercise in futility. Mr. Masood Ahmed Abbasi is not able to show us any evidence m possession of appellant which he was not able to produce before the assessing officer. In these circumstances we do not find any justification whatsoever for setting aside the addition which has been made after conducting elaborate proceedings according to law.

30. As a result of above discussion the objection to the addition under section 13(1) made on account of bank deposits as deemed income is hereby repelled and the impugned order of learned CIT (A) confirming the addition is upheld.

31. This brings us to the last objection raised by the appellant in the assessment year 1981-82 only. The appellant has objected to the various disallowance in the profit and loss account. The first objection is to the disallowance at 1/3rd of the expenses claimed under the head telephone for non-business use. The disallowance is excessive and in consonance with the consistent view of this Tribunal the disallowance is reduced to 15% of the claim. The next objection is to the disallowance of 1/3rd of the claim under the head travelling expenses for non-business use. Mr. Abbasi is not able to produce any evidence in support of the claim and, therefore, the disallowance is confirmed. The appellant has further objected to the disallowance bf entire expenditure under the head advertisement for recruitment of labour amounting to Rs. 3,300. Likewise the appellant has further objected to the total disallowance of the claim under the head telex expenses at Rs.2,730 and 50% disallowance under the head printing and stationery and miscellaneous expenses for the similar reason. Mr. Masood Ahmed Abbasi is not able to produce any evidence in support of the expenses claimed and, therefore, we do not find any reason to interfere with the findings of the learned two officers below. The disallowances under these heads stand confirmed.

32. All the five appeals at the instance of assessee stand disposed of as above.

M.BA./1932/TOrder accordingly.