I.T.A. NOS.2912/LB OF 1991-1992 AND 916/LB OF 1993 VS I.T.A. NOS.2912/LB OF 1991-1992 AND 916/LB OF 1993
1997 P T D (Trib) 1102
[Income-tax Appellate Tribunal Pakistan]
Before Saleem Asghar Mian, Accountant Member and Sardar Muhammad Akbar A. Khan, Judicial Member
I.T.A. Nos.2912/LB of 1991-1992 and 916/LB of 1993, decided on 15/11/1995.
(a) Income Tax Ordinance (XXXI of 1979)---
----S.65---Re-opening of assessment after giving appeal effects ---Assessee's income assessed by revenue was reduced after giving appeal effects to C.I.T. (A)'s order---Department reopened assessment and passed the order accordingly---Held, as fresh assessment had been subsequent to appeal filed by assessee and taking into consideration finding of C.I.T. (A) departmental appeal became infructuous and was thus dismissed.
(b) Income Tax Ordinance (XXXI of 1979)--
----Ss.13 (1)(d) & 13(1)(b)---Deemed income---Additions---No reasonable opportunity---No notice---Validity---Assessing Officer found during assessment proceedings that advance had been paid for opening letter of credit and the amount was not shown in wealth statement---Addition of such amount in assessee's income ---Legality---Assessee was not given opportunity of being heard and there was no such notice on record ---C.I.T.(A) finding assessment illegal set aside assessment for de novo proceedings instead of its cancellation---Held, additions made without confronting the assessee were illegal and not sustainable in eve of law.
Muhammad Akram Tahir, D.R. for Appellant (in I.T.A. No.2912/LB of 1991-92).
Shehid Abbas for Respondent (in I.T.A. No.2912/LB of 1991-92).
Shehid Abbas for Appellant (in I.T.A. No.916/LB of 1993).
Muhammad Akram Tahir, D.R. for Respondent (in I.T.A. No.916/LB of 1993).
ORDER
SALEEM ASGHAR MIAN (ACCOUNTANT MEMBER). ---These are two cross-appeals relating to the Assessment year 1990-91.
2. The department has challenged the order of the C.I.T. (Appeals) dated 3-9-1991 on the assessment framed under section 62 for the Assessment year 1990-91. The original assessment had been framed on 30-1-1991 at net income of Rs.2,07,200 which was reduced to Rs.1,58,200 after giving appeal effect to the C.I.T. (Appeals) order. The Department, however, reopened the assessment proceedings under section 65 and subsequently an order was passed under section 65/62 on 7-2-1993. In the event as the assessment has been made subsequent to the appeal filed, and taking into consideration the finding of the C.I.T. (Appeals) the appeal becomes infructuous and is dismissed.
3. For the assessment year 1990-91 the assessee has filed an appeal against the order of the C.I.T. (Appeals), Gujranwala for setting aside the assessment framed under section 65/62. During the course of proceedings for the charge year 1991-92, the assessing officer had found that an- amount of Rs.1,04,200 had been paid in advance for opening L.C.S. and the said amount had not been shown in the wealth statement for the period ending 30-6-1990 relating to the Assessment year 1990-91. A show-cause notice was, therefore, issued and as no reply to the notice was received, the case was re-opened and a notice under section 65 was issued on 3-10-1992. The assessing officer after rejecting the reply of the assessee to the notice added a sum of Rs.1,04,200 under section 13(1)(d) to the income already assessed after prior approval of IAC. Before the learned C.I.T. (Appeals), this was vehemently contested as having been made illegally and without providing a reasonabla opportunity to the assessee of being heard. The C.I.T. (Appeals) found on perusal of the record that no notice under section 13(1)(d) read with section 13(2) had ever been issued to the assessee. He also found from the record that the IAC Range-I, Gujranwala vide his Letter No.616, dated 1-2-1993 had granted approval under section 13(1)(d) where the assessment has been made by making the addition under section 13(l)(d) for which no approval was granted by the IAC concerned. He also held that the addition was not sustainable in the eyes of law for these reasons but however set aside the assessment for de novo proceedings.
It has been bitterly contested that this action was not proper as once the C.I.T.(A) had found the order illegal, he should not have set aside the same but cancelled or annulled it. The learned DR agitated that the omission made by the Department should be overlooked and the C.I.T.(A)'s action be maintained. We however, do not agree with this view. The addition under section 13(1)(d) had been made without approval of the IAC and without confronting the assessee and has rightly been held by the C.I.T.(A) that the same is not sustainable in the eyes of law. He, therefore, held that the illegal action made be deleted.
C.M.S./241/Trib????????????????????????????????????????????????????????????????????? Order accordingly.