I.T.AS. NOS.505/LB, 9619/LB OF 1993 AND 5637/LB OF 1995 VS I.T.AS. NOS.505/LB, 9619/LB OF 1993 AND 5637/LB OF 1995
1997 P T D (Trib) 1127
[Income-tax Appellate Tribunal Pakistan]
Before Shariq Mehmood, Accountant Member and Nasim Sikandar, Judicial Member
I.T.As. Nos.505/LB, 9619/LB of 1993 and 5637/LB of 1995, decided on 30/01/1996.
Income Tax Ordinance (XXXI of 1979)---
----S.59---Self-Assessment Scheme, para.3(b)(ii)---Assessee returned income under Self-Assessment which was not accepted---Validity---Assessing Officer, finding that assessee was Director in more than one company added to his income a certain sum in terms of perquisites ---Assessee himself declared in return that he was Director in more than one company and Assessing Officer assessed income after making adjustments under provisions of S.59(3) of the Ordinance---Return did not qualify under Self-Assessment Scheme in circumstances.
Mian Ashiq Hussain for Appellant.
Qaiser M. Yahas, D.R. for Respondent.
Date of hearing: 30th January, 1996.
ORDER
These separate orders passed by the C.I.T. (A) are assailed before us by atp individual deriving income from salary. The orders pertain to the charge years 1992-93 and 1993-94. In respect of the decisions for 1992-93 there are two rounds of appeal i.e., the first decided by the C.I.T. (A). Zone-111, Lahore dated 27-4-1993 and secondly by the same C.I.T. (A) vide order dated 11-8-1993. For the assessment year 1993-94 the order is of the C.I.T. (A), Zone-1, Lahore dated 23-8-1995.
2. The facts of the case are that the appellant filed return of income for the charge year 1992-93 declaring an income of Rs.101,528. The same was not accepted under the Self-Assessment Scheme on the observation that the assessee is in receipt of income from salary as a "Director in companies". As such perquisites declared at Rs.36,000 were added. The said treatment was agitated in appeal where it was maintained that the appellant had received salary and perquisites from only one company and had not even worked for a day in the other company where he was a Director. The C.I.T. (A) observing that the assessee's contention required verification from the records of the company, set aside the order with directions.
3. After the above decision the case was taken up. Notices under section 61 were issued. Compliance to which was party made and when the assessee nor his representative failed to appear on the date for which adjournment had been sought, the assessing officer repeated the earlier action i.e., added the perquisites of Rs.36,000 to the declared income. This action was challenged in appeal where the action of the assessing officer was upheld on the observation:--
"From the above judgment it is clear that even if the assessee was receiving salary and allowances from one company and was serving as a Director in other Companies where no salary and allowances were being paid, the mere fact that he was a Director in other companies render him ineligible for the perquisites allowance because being a Director in more than one company entails attending Board's meeting etc. and, therefore, he could not be a whole time Director in one company. "
4. In the charge year 1993-94, the assessing officer proceeding on the action taken for 1992-93 and the decision of the C.I.T. (A) (referred to above), again added the perquisites. The appellant went into appeal where the first appellate authority, proceeding and relying on the history of the case and the second decision pertaining to the charge year 1992-93 upheld the order of the assessing officer of the addition of perquisites to the declared salary income.
5. The learned A. R. pleaded that the action of the authorities below was not justified and the charging to tax of the perquisite for the reasons that the assessee happened to be a Director in another company was not called for. During the course of proceedings it was submitted that the appellant was a full and whole time Director in M/s. New Light House (Pvt.) Limited, Lahore, only and in the case of the other company i.e. Star Industrial Gases (Pvt.) Ltd., the said concern was dormant and the question of any part time or whole time working did not arise. Neither was the appellant in receipt of any pay nor perquisites from the second company (Star Industrial Gases (Pvt.) Limited. It was, therefore, pleaded and maintained that the action of the authorities below was not justified. The assessee through, his A. R. also took the plea that the return of income filed for the charge year 1992-93 should have been accepted under the Self-Assessment Scheme as it fulfilled the required and requisite conditions.
6. The learned D. R. on the other hand supports and upholds the action taken by the authorities below and is of the view that as the assessee himself had shown to be a Director of two companies, therefore, the addition of perquisites to the declared salary income was justified. It did not call for any other interference.
7. The two points of view explained and maintained before the Bar have been considered and examined. In respect of the charge year 1992-93 there have been two rounds of appeal. In respect of the first appeal it has become infructuous as the order set aside by the C.I.T. (A) has been given effect. It accordingly stands dismissed.
8.In respect of the second appeal for 1992-93 the appellant's submission that the return qualified for acceptance under section 59(1) has been considered and examined. In the first case when the order under section 59(1) was originally passed and the assessee preferred an appeal, this issue was not raised. Neither it had comprised the grounds of appeal when this was affiliated before the Tribunal. The assessee had himself declared in the return to be a director of more than one company. Anyhow, according to the conditions of Self Assessment Scheme for 1992-93 the provisions of para. 3(b)(ii) were attracted. He (the I.T.O.) assessed the income under section 59(1) after making adjustments under provisions of section 59(3). The return, therefore, did not qualify for acceptance under Self-Assessment Scheme.
9. The appellant maintains that the case was distinguishable from the cited case relied upon by the Department. Further, the Department had nowhere specifically obtained his point of view of this issue nor confronted him with notice under section 62. The fact, however, is acknowledged that notices under section 64 were issued but these could not be substituted for specific notice under section 62 where the point under consideration could be reasonably examined, discussed and decided. In the absence of an opportunity afforded to the assessee the decision of the authorities below were not called for.
10. On these submissions we would concur and agree with the appellant and, therefore,. set aside the additions on account of perquisites for the charge years 1992-93 and 1993-94 with directions that the onus is on the appellant to substantiate and prove that he did not work at all in the case of the second company and that his cause is distinguishable from the decisions cited/relied upon (reported as (1968 PTD 563) and 1990 PTD (Trib.) 321 by the Department.
11. For the charge year 1993-94 it has also been pleaded that the assessing officer was not justified to estimate share income from the registered firm in which the assessee was a partner It was pleaded that the declared share income was Rs.20,603 while in computing the assessed income it has been double to Rs.41,206. The submission has been considered and examined. The assessing officer has included this income subject to action under section 65/156. Remedy under the law is already available to the appellant. Assessment in the case of the registered firm would have also been finalised. The assessee should avail of the remedy and take occurrence to it accordingly.
12. Appeals are disposed of as discussed above.
C.M.S./250/Trib. ??????????????????????????????????????????????????????????????????????????????? Order accordingly.