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

----Ss. 53 & 87---Advance tax ---Assessee who fails to deposit advance tax in accordance with S.53 is liable to be charged additional tax in accordance with the provision of S.87 of the Income Tax Ordinance, 1979.

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

----Ss. 87 & 53---Income-tax Act (XI of 1922), S.18-A(8)---Additional tax-- Failure to pay advance tax---Charging of additional tax relates to "recovery of tax" in the Ordinance as distinguished from the provisions contained in S.18-A(8) of the Income-tax Act, 1922 which provided that additional tax was to be charged only while making assessment.

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

----Ss.87 & 129---Appeal against the order under S.87 before Commissioner of Income Tax (Appeals) was not competent.

All orders passed by the I.T.O. are not appealable before the C.I.T.(A). The appeal against the orders of the I.T.O. lies only in respect of the orders passed under various sections of the Ordinance enumerated in section 129 of the Ordinance and the said section does not include an order made under section 87 of the Ordinance. The assessee's appeal before the C.I.T.(A) against the order under section 87 was, thus, without jurisdiction.

Mrs. Zareen Saleem Ansari, DR for Appellant.

Azim-ul-Qadar Mirza for Respondent.

Date of hearing: 16th February, 1993.

ORDER

The assessee, a private limited company, failed to deposit advance tax relating to the assessment year 1989-90 on the basis of the assessment for the assessment year 1987-88 as required by section 53 of the Income Tax Ordinance, 1979. There is no doubt that an assessee who fails to deposit advance tax in accordance with the provision of section 53 of the Ordinance is liable to be charged additional tax in accordance with the provision of section 87 of the Ordinance. Consequently, the I.T.O. called upon the assessee to show cause why additional tax should not be charged from it on account of its failure to pay advance tax in accordance with the provision of section 53 of the Ordinance. The show-cause notice remained un-complied with. Consequently, the Income Tax Officer (ITO) by an order dated 28-3-1992 made under section 87 of the Ordinance charged the assessee additional tax amounting to Rs.25,945. On appeal by the assessee, the C.I.T.(A), Islamabad, by his order dated 10-10-1992, deleted the additional tax on the ground that I.T.O. had not recorded the default in the body of the order by which the assessment was made on the assessee. In arriving at the above conclusion the C.I.T.(A) has relied upon the judgment of the Karachi High Court reported in (1987) PTD 492. The I.T.O. has objected to the order of the C.I.T.(A) on the ground that in the presence of an independent order passed by the I.T.O. under section 87 of the Ordinance after providing an opportunity to the assessee to the show cause against the said imposition the C.I.T.(A) was not justified in deleting the addition tax.

I have heard Mrs. Zareen Saleem Ansari, DR for the I.T.O. and Mr. Azim-ul-Qadar, Advocate for the assessee.

The judgment of the Karachi High Court relied upon the C.I.T.(A) proceeded to interpret the provisions of the Income-tax Act, 1922, which as far as the charge of additional tax is concerned have been radically changed when enacted in the form of 1979 Ordinance. Under the 1922 Act the provisions regarding charging of additional tax were part of the provisions relating to assessment whereas under the Ordinance they are the part of the provisions relating to recovery of tax. Subsection (8) of section 18-A of the 1922 Act specifically provided that additional tax shall be charged only while making assessment order whereas no parallel provisions exist in the 1979 Ordinance. On merits the learned counsel for the assessee could not show that the imposition of the additional tax was unwarranted. The other precedent relied by the C.I.T.(A) proceeds on the basis that additional tax cannot be charged by an order under section 156 of the Ordinance. In this case the additional tax has been charged on the basis of regular order made under section 87 of the Ordinance and as such the precedent saying that the additional tax could not be charged by an order under section 156 of the Ordinance does not apply. Another question also arises whether the order made by the I.T.O. under section 87 of the Income Tax Ordinance, 1979 was appealable before the C.I.T.(A) or not. Ali orders passed by the I.T.O. are not appealable before the C.I.T.(A). The appeal against the orders of the I.T.O. lies only in respect of the orders passed under various sections of the Ordinance enumerated in section 129 of the Ordinance, and the said section does nor include an order made under section 87 of the Ordinance. The assessee's appeal before the C.I.T.(A) against the order under section 87 was without, jurisdiction.

Under the circumstances the I.T.O.'s appeal is accepted. The C.I.T.(A)'s order is vacated and that of the I.T.O. is restored.

H.B.T./10/T.TAppeal accepted.