I.T.AS. NOS. 84 AND 85/LB OF 1994, DECIDED ON 13TH DECEMBER, 1994. VS I.T.AS. NOS. 84 AND 85/LB OF 1994, DECIDED ON 13TH DECEMBER, 1994.
1996 P T D (Trib.) 282
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Mushtaq, Accountant Member
I.T.As. Nos. 84 and 85/LB of 1994, decided on 13/12/1994.
(a) Income Tax Ordinance (XXXI of 1979)---
----Ss. 87, 53 & 156---Advance tax---Additional tax---Rectification of mistake--- Assessing Officer, while charging the additional tax on failure of assessee to pay advance tax had not passed speaking order inasmuch as the order did not indicate details as to how the default under S.53, Income Tax_ Ordinance, 1979 had occurred; what was the liability of the assessee to pay advance tax; whether assessee had made any payment and if so on what date such payment was made and how the additional tax had been calculated by the Assessing Officer and that what was the period of default---Charge of additional tax on failure to pay advance tax by such a non-speaking order under S.156, Income Tax Ordinance, 1979 was not tenable.
(b) Income Tax Ordinance (XXXI of 1979)---
--Ss.87 & 53---Advance tax---Additional tax on default in payment of advance tax---Last assessed income of the assessee gave rise to a refund---Advance tax is chargeable in the case of assessee.
Sabiha Mujahid, D.R. for Appellant
M. Hayat Khan for Respondent.
ORDER
MUHAMMAD MUSHTAQ (ACCOUNTANT MEMBER).--These two appeals have been filed on behalf of the Income Tax Department challenging the order of learned CIT(A), Zone-1, Multan vide A.O. No. 503 to 505, dated 7-12-1993.
2. The disputed issues in these two appeals being combined and inter linked these two appeals are disposed of by a combined order as under.
3. The respondent in this case Mr. Khawaja M. Masood (hereinafter also referred to as the assessee) is an individual. As per assessment order the assessments in this case were completed under section 62. However, additional tax under section 87 was not charged by the assessing officer at the time, of completion of assessments but subsequently action was taken under section 156 of the Income Tax Ordinance and additional tax under section 87 was charged by the assessing officer at Rs.6,391 for each of the above years. It is also pertinent to reproduce the order under section 156 which is as under:---
"In the instant case, assessments for the charge years 1989-90, 1990-91 and 1991-92 were completed under section 62. The assessee was liable to pay additional tax under section 87. While preparing IT-30 forms for the relevant years the same was not charged inadvertently. It is a mistake apparent from record and rectifiable under section 156 of the Income Tax Ordinance, 1979. For this purpose, show-cause notice under section 156(2) was issued and served requiring the assessee to explain by 4-10-1992 as to why additional tax under section 87 should not be charged by invoking provisions of section 156 of the Income Tax Ordinance, 1979. On 4-10-1992 the assessee was allowed to file the requisite explanation by 21-10-1992, on which date the assessee appeared and again sought adjournment for the stipulated date i.e. 29-10-1992. The assessee neither filed any explanation nor applied for further extension of time. It means that the assessee has nothing to say in this regard. Additional tax under section 87 is,, therefore, charged for each year as under:---
| 1989-90 | Rs. 4, 971 |
| 1990-91 | Rs. 6,391 |
| 1991-92 | Rs. 6,391 |
4. Aggrieved by this treatment the assessee preferred first appeal. Before the learned CIT(A) the assessee made the following contentions:
(1) That the order made by the assessing officer under section 156 does not indicate the details of default committed. Hence, this order was not maintainable.
(2) That the assessee had paid advance tax under section 87 for the assessment year 1989-90 and for rest of the years there was no liability for payment of tax. Hence, the I.T.O. was not justified in levying the additional tax.
5. The learned CIT(A) confirmed the levy of additional tax for the assessment year 1989-90. However, for the rest of the years additional tax levied by the Assessing Officer was deleted with the following observations:
"For the assessment year 1990-91, IT-30 Form, dated 22-5-1991 under section 156 reveals a refund of Rs.13, 833 which was' also issued vide refund voucher No. 29/6093. Levy of any additional tax on the face of this fact is simply erroneous. The same is directed to be deleted.
For the assessment year 1991-92, again the IT-30 Form, dated 20-5-1992 reveals credit of tax paid under section 50 and result in N.D. Besides agreement between PCGA and CBR allowing exemption to the partners from tax pertaining to assessment year 1991-92 confused by the learned A.R. for assessment year 1990-91. Levy for this year is also directed to be deleted."
6. The Income Tax Department feels aggrieved by the relief allowed by the learned CIT(A) as above. As per grounds of appeals it has been contended on behalf of the Income Tax Department for the above two years that the learned CIT(A) was not justified in deleting the additional tax as above.
The learned D.R. appearing on behalf of the Income Tax Department has contended that in this case the assessee did not pay advance tax for the above years. Hence, the ITO was justified in charging the additional tax as above. On the contrary, Mr. Muhammad Hayat Khan, Advocate appearing on behalf of the assessee contended that the facts stated by the learned CIT(A) are quite clear. It was argued by the learned counsel of the assessee that for the assessment year 1990-91 a refund was due to the assessee which was indicated in the IT-30. Hence, there was no liability against the assessee to pay any advance tax. For the assessment year 1991-92 it was contended by the learned counsel for the assessee that tax was deducted under section 50 and there was no demand payable by the assessee The learned counsel of the assessee also argued that as per agreement between PCGA and CBR in cases of cotton ginners the partners were not required to pay tax. Hence, the appeals, filed by the Income Tax Department for the above two years were without any merit and liable to be rejected.
7. We have carefully considered the facts of the case and arguments advanced from both the sides. As far as the assessment year 1990-91 is concerned the learned CIT(A) has deleted the additional tax under section 87 on the ground that a perusal of the IT-30 indicates a refund due to the assessee at Rs.13,833 which was also issued subsequently. Hence,' levy of additional tax was erroneous. The observations made by the learned CIT(A) cannot form basis for relief because refund to an assessee can be due to a number of factors. Whereas liability to pay advance tax is on the basis of last assessed income. However, in spite of above we are not inclined to grant any relief to the Income Tax Department for the reasons that order made by the assessing officer for charring the additional tax is not a speaking order inasmuch as the relevant order under section 156 does not indicate any detail as to how the default under section 53 in this case has occurred. The order under section 156 does not indicate what was the liability by the assessee under section 53 to pay advance tax on the basis of last assessed income and whether assessee had made any payment and if so on what date this payment was made and how the additional tax has been calculated at Rs.6,391 by the assessing officer. The order also does not indicate the period of default.
8. As far as the assessment year 1991-92 is concerned again the ITO has charged additional tax by a combined order for the assessment years 1989-90 to 1991-92 and the order of the assessing officer is not a speaking order as pointed out above. The learned CIT(A) has allowed relief on the basis of agreement between PCGA and the CBR which does not appear to be correct. Actually for the year under consideration cases of cotton ginners were covered by the presumptive tax under section 80-C of the Income Tax Ordinance. In this connection a reference is also invited to a CBR Circular No.29 of 1991, dated 28-8-1991, which indicates that cases of cotton ginners are also covered under section 80-C of the Income Tax Ordinance, 1979.
9. Because of these reasons, we are not inclined to interfere in the order of the learned CIT(A). The appeals filed by the income Tax Department are rejected.
M.B.A./153/Trib.
Appeals dismissed.