I.TA. NO. 210/LB OF 1993, DECIDED ON 24TH JULY, 1994. VS I.TA. NO. 210/LB OF 1993, DECIDED ON 24TH JULY, 1994., 1995 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 1225 (1994)

Income Tax Ordinance (XXXI of 1979)---

----S.59(1)---Self-Assessment Scheme (1992-93)---C.B.R. Circular No. 16 of 1992, dated 1st July 1992---Assessee filed return of income under Self -Assessment Scheme (1992-93)---Income Tax Officer set apart the return of assessee for proceeding under normal law---Validity---No circumstances were stated under which the return was set apart---All the notices to assessee remained uncomplied with---Assessing Officer proceeded under S.65, Income Tax. Ordinance, 1979 and framed the assessment---Report of the Inspector which indicated nothing except that the assessee was not available on the address given in his return and proposing that he should be assessed at certain figure was not confronted to the assessee---Appellate Authority had set aside the assessment and remanded the case for do novo framing of assessment-- Assessment was framed in a casual manner and order appeared to be a stereo typed filling in blanks for nature of business, the amount declared and finally determined---Entry regarding receipt of report of Circle Inspector had been added in handwriting of the assessing officer while the rest of the order was stereotyped one and framed to hock on assessee without any application of mind or otherwise bringing home sufficient material to justify the assessment-- Assessing Officer had not even recorded in so many words that the assessee was duly served---Nature of business or the fact that return was filed under Self-Assessment Scheme had not been recorded muchless to say of the circumstances justifying the treatment under the normal law--- Held, return filed under Self-Assessment Scheme was to be set apart only in exceptional circumstances---Selection of a case for assessment under normal law without properly following the procedure given in the Scheme was deprecated-- Remand of de novo proceedings by the Appellate Authority was not proper for it had to rule upon the vires of picking up of return for. proceeding under normal law instead of its acceptance under Self-Assessment Scheme---Framing of assessment under normal law and then setting aside of the assessment by Appellate Authority were both illegal and improper, there being no reason on record to justify framing of assessment under normal law.

1988 PTD 277; M/s. Specico International v. RCIT, Karachi 1993 PTD 1007 and Messrs Pakistan Educational Society v. Government of Pakistan etc. NTR 1993 HC 9 ref.

Miss Aeysha Qazi for Appellant.

Imtiaz Ali Khan, D.R. for Respondent.

Date of hearing: 21st July, 1994.

ORDER

This second appeal for the assessment year 1992-93 assails an order recorded by the CIT(A), Zone-III, Lahore on 22-11-1993. In the grounds of appeal objections are directed against setting aside of the assessment order by the learned first appellate authority instead of out rightly annulling the same.

2. The facts of the case as emerge from the assessment order are that the assessee an individual deriving income from trading declared net income at Rs.31,250. The return was filed under Self-Assessment- Scheme. However, without stating that circumstances in which it was picked up for process under normal law, the assessee was allegedly served with a notice under section 61 of the Ordinance. According to the assessment order all the notices, remained uncomplied with. Therefore, the assessing officer proceeded under section 63, of the Ordinance and framed an assessment at an income of Rs.50,000. Learned first appellate authority found that the last alleged default occurred on 10-5-1993 but no ex parte order was recorded on the order-sheet. It was further found that Inspector's Report was obtained subsequent to the last default and, therefore, the same was not confronted to the assessee. Learned first appellate authority also found that the report of the Inspector available on record indicated 'nothing except that the assessee was not available on the address given in his return and proposing that he should be assessed at Rs.50,000. In these circumstances the first appellate authority set aside the assessment and remanded the case for de novo framing of assessment.

3. Learned counsel contends that the return having been filed under Self- Assessment Scheme its process under normal law was not justified at all. Further, contends that even the first appellate authority failed to rule upon this objection duly raised before it. A copy of the grounds of appeal taken before the first appellate authority has also been produced for our examination in support of the contention. On merits the learned counsel contends that the assessment framed is totally bald and without any material available on record. The assessing officer religiously followed the report of the Circle Inspector which in turn was based on no material at all. It is further stated that neither the assessing officer nor the Circle Inspector made any serious attempt to serve the assessee. Learned D.R. on the other hand, states that the first appellate authority having set aside the assessment order has caused no prejudice to the assessee in the circumstances of the case.

4. After hearing the parties and going through the orders of the authorities below we entertain no doubt that the impugned assessment was framed absolutely in a casual manner. The order appears to be a stereotyped filing in blanks for nature of business, the amount declared and the one finally, determined at Rs.50,000. This conclusion also finds support from the fact that the entry regarding receipt of report of Circle Inspector has been added in the handwriting of the assessing officer while the rest of the order as aforesaid is stereotyped one and framed to hock on assessee without any application of mind or otherwise bringing home sufficient material to justify the assessment. The fact of the matter is that the assessing officer has not even bothered to record in so many words that the assessee was duly served. Even the nature of business or the fact that return was filed under Self-Assessment Scheme has not been recorded muchless to say of the. circumstances justifying the treatment under normal law. The remand of the case for de novo proceedings by the first appellate authority is again improper. It had to rule upon the vires of picking up return for processing under normal law instead of its acceptance under Self-Assessment Scheme.

5. This Tribunal as well as the Superior Appellate Forums in a number of cases has held that returns filed under Self-Assessment Schemes should be set apart only in unexceptional circumstances. Reference in this regard can be made to a reported case of this Tribunal cited as (1988) 58 Tax 81. Selection of a case without properly following the procedure given in the Scheme for the relevant year has all along been deprecated by the superior Courts. The ratio of the case laid down by their Lordships of the Sindh High Court in re: M/s. Specico v. RCIT, Karachi 1993 PTD 1007 (Karachi) and re: Pakistan Educational Society v. Government of Pakistan etc. cited as NTR 1993 HC 9 fully support the contentions made by the learned counsel for the assessee.

6. In these circumstances we will hold that framing of assessment under normal law and then setting aside of the assessment are both illegal and improper. There being no reason on record to justify framing of assessment under normal law the income declared at Rs.31,250 is directed to be accepted.

7. The appeal succeeds accordingly.'

M.BA./97/T Appeal allowed.