ATTAULLAH VS INCOME TAX OFFICER
1996 P T D 273
[Lahore High Court]
Before Malik Muhammad Qayyum, J
ATTAULLAH
Versus
INCOME TAX OFFICER and others
Writ Petition No. 3583 of 1991, decided on 11/04/1995.
Income Tax Ordinance (XXXI of 1979)---
---S. 156 & Second Sched. Cl. 172---C.B.R. Circular No:9 of 1985, para.4-- Constitution of Pakistan (1973), Art. 199---Constitutional petition---Special National -Fund Bonds---Set off---Application seeking rectification of assessment order ---Assessee invoked the, jurisdiction of the Regional Commissioner by filing representation in terms of para. 4 of C.B.R. Circular No.9 of 1985-- Representation filed by assessee was disposed of in the Office of Regional Commissioner without granting any opportunity to the assessee of being heard nor any speaking order on various-aspects of the matter was passed by the Regional Commissioner rather a letter was issued by Assistant Commissioner rather a letter was issued by Assistant Commissioner to the assessee's counsel informing him that the request made by the assessee could not be acceded to-- Held, matter required re-examination by the Regional Commissioner in view of 1993 SCMR 39 = 1992 PTD 1681 and memorandum/letter written to assessee on behalf of Regional Commissioner was of no legal effect with the result that the representation filed by assessee would be deemed to be pending before the Regional Commissioner and shall be decided afresh after hearing the parties.
Mian Ashiq Hussain for Petitioner.
Shahbaz Butt for Respondents.
Date of hearing: 11th April, 1995.
JUDGMENT
MALIK MUHAMMAD QAYYUM, J.---The facts leading to the filing of this petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 are that the assessment of the petitioner for the fear 1982-83, who was an individual (since dead) was completed on 23rd December, 1982 under the Self-Assessment Scheme. However, pursuant to the notices issued under section 65 of the Income Tax Ordinance, 1979, the assessment was reopened and was completed again on 29th September 1988 under sections 62 and 65 of the Income Tax Ordinance, 1979.
2. It appears that on 18th December, 1990, an application was filed by the predecessor-in-interest of the present petitioners under section 156 of the Income Tax Ordinance, 1979 seeking rectification of the assessment order on the ground that he, having purchased Special National Fund Bonds in terms of SRO. No.721(1)/85, dated 29th July, 1985 was entitled to have the amount equivalent to the value of the bonds set off. This application was dismissed on the same day i.e. 18th December, 1990. The predecessor-in-interest of the petitioners thereupon filed a representation before the Commissioner of Income Tax of the Zone concerned which was followed by another representation to the Regional Commissioner who through Assistant Commissioner (Headquarters) on 2-4-1991 declined to allow set-off to the predecessor-in-interest of the petitioners on the ground that in the declaration filed by him with the State Bank in terms of proviso to clause 172 of Second Schedule of Income Tax Ordinance, 1979, House No.3, Shah Jamal, Lahore was not mentioned. The petitioners have now come to this Court by filing this petition against the refusal of income-tax authorities of the benefits of clause 172 of Second Schedule to them.
3. Mian Ashiq Hussain, learned counsel for the petitioners has raised various contentions in support of this petition and has heavily relied upon the pronouncement of Supreme Court in Central Board of Revenue and others v. Chanda Motors (1993 SCMR 39) in support of the claim that the petitioners were entitled to set-off which has erroneously been denied to them. It was also argued by him that as Special National Fund Bonds were purchased by the predecessor-in-interest of the petitioners much earlier to the addition of the proviso to clause 172 which took place on 11th March, 1986, proviso could not be made applicable to the case of the petitioners by giving it retrospective effect.
4. The petition has vehemently been opposed by Mr. Shahbaz Butt, learned counsel for respondents who has argued the case with great industry. The first objection raised by him is that as at the time of the completion of the reassessment on 29th September, 1988, the benefit of clause 172 was not claimed by the predecessor-in-interest of the petitioners, he could not be allowed to do so by filing a miscellaneous application under section 156 of the Income Tax Ordinance, 1979 or by filing a representation before the Regional Commissioner. According to the learned counsel, the claim for set-off was clearly an afterthought and mala fide as it was raised for the first time after about one year. Learned counsel has pointed out that as the predecessor-in interest of the petitioners had not complied with the requirement of proviso to clause 172, he was not entitled to benefit thereof.
5. In reply, learned counsel for the petitioners has submitted that the petitioners have throughout been agitating the claim of set-off and first application in this behalf was filed by him on 14-2-1989.
6. It is not necessary to decide the contentions raised by the learned counsel for the parties at this stage as the matter has not received due consideration at the hands of Regional Commissioner. The petitioners invoked the jurisdiction of the Regional Commissioner, by filing the representation in terms of para. 4 of Circular No.9 of Central Board of Revenue issued in 1985, according to which if any doubt regarding applicability of clause 172 of Second Schedule arise, clarification could be sought from the Central Board of Revenue. Unfortunately, the representation filed by the petitioners in this behalf was disposed of in the office of the Regional Commissioner without granting any opportunity to the petitioners of being heard nor any speaking order on various aspects of the matter has been passed by the Regional Commissioner rather on whose behalf a letter was issued by the Assistant Commissioner (Headquarters) to the learned counsel for the petitioners informing him that the request made by the petitioners predecessor-in-interest could not be acceded to.
7. Be that as it may, I am clearly of the view that the matter requires re examination by the Regional Commissioner in view of the aforesaid pronouncement of Supreme Court of Pakistan in Central Board of Revenue's case (1993 SCMR 39). Learned counsel for the petitioners has pointed out that it was on a miscellaneous application that the dispute as regards set-off has arisen. This matter shall also be looked into by the Regional sCommissioner where parties will be free to raise any other point which they wish to urge. It was also argued by the learned counsel for the petitioners that the pro forma prescribed in terms of the proviso, a declaration of assets as on 30th June, 1994 was necessary and as the petitioners predecessor-in-interest had sold the house earlier on 9-1-1984, he was not called upon to disclose that fact in the pro forma submitted by him.
8. Learned counsel for respondents has, however, argued that it was the requirement of the proviso that the assets on the basis of which set-off is claimed should specifically be mentioned. This aspect of the matter shall also be considered by the Regional Commissioner.
As a result of what has been stated above, the memorandum/letter, dated 2-4-1991 written on behalf of the Regional Commissioner is declared to be illegal and of no legal effect with the result that the representation filed by the petitioners shall be deemed to be pending before the Regional Commissioner and shall be decided afresh after hearing the parties.
No order as to costs.
M.B.A-/A-921 /L
Order accordingly.