W.T.A. NO.622/1_13 OF 1995 VS W.T.A. NO.622/1_13 OF 1995
1997 P T D (Trib.) 183
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Mujibullah Siddiqui, Judicial Member
I.T.A. No, 248/KB of 1995-96, decided on 12/08/1996.
(a) Income Tax Ordinance (XXXI of 1979)---
---Ss.165 & 59---Self-Assessment Scheme-Special provision of the Ordinance---Provision contained in the Self-Assessment Scheme falls within the domain of special provisions of the Ordinance.
(b) Interpretation of statutes---
---- Special Act overrules the general enactments and the special provisions in a particular enactment overrule the general provisions contained therein.
(c) Income Tax Ordinance (XXXI of 1979)---
-----Ss.62, 63, 59 & 2---Self-Assessment Scheme (1992-93), para. 6(b)-- Assessment under Ss.62 & 63 of Income Tax Ordinance, 1979 and assessment under Self-Assessment Scheme---Distinction---Assessments framed under Ss.62 & 63 of the Income Tax Ordinance, 1979 are termed as "normal assessments" while in contradistinction the "assessment framed under the Self-Assessment Scheme" are not termed as normal assessments but are called as "Self-Assessments"---Assessments framed under S.59 of the Ordinance (self-assessment) fall within the ambit of special provisions and are to be governed within the framework of Self-Assessment Scheme formulated by the C.B.R. for each assessment year separately ---Self Assessment Scheme framed by C.B.R. is complete code in itself and assessee desirous of availing the benefit of Self-Assessment Scheme has to adhere by the provisions of Scheme and is not allowed to fall back on the general provisions contained in the Ordinance---Assessment completed under Ss.62 & 63 of the Ordinance are the normal assessments and all the general provisions contained in the Ordinance including the definitions in S.2 of the said Ordinance are applicable to such assessments until and unless specifically excluded---General provisions of law contained in the Ordinance if in conflict with the provisions contained in Self-Assessment Scheme shall give way to the provisions contained in the Self-Assessment Scheme.
In common parlance with Income-tax Department and assessees the assessments framed under sections 62 and '63 bf the Income Tax Ordinance are termed as normal assessments while in contradistinction the assessment framed under the Self-Assessment Scheme are not termed as normal assessments but are called Self-Assessments. Thus, there can be no cavil to the proposition that the assessments completed under sections 62 and 63 of the Income-tax Ordinance, 1979 are the normal assessments and all the general provisions contained in the Ordinance including the definitions in section, 2 are applicable to such assessments until and unless specifically excluded while assessments framed under section 59 fall within the ambit of special provisions and are to be governed within the framework of Self Assessment, Scheme formulated by the C.B.R. for each assessment year separately. The general provisions of law contained in the Income-tax Ordinance if in conflict with the provisions contained in the Self-Assessment Scheme shall give way to the provisions contained in the Self-Assessment Scheme. In short the provisions contained in the Self-Assessment Scheme shall override the general provisions contained in the Income Tax Ordinance, 1979 on the principle that the special provisions override the general provisions of law. In fact, the Schemes framed by the C.B.R. for Self Assessment under section 59 are complete code in themselves and any assessee desirous of availing the benefit of Self-Assessment Scheme has to adhere to the provisions contained therein and is not allowed to fall back on the general provisions contained in the Income Tax Ordinance, 1979. With the enactment of Self-Assessment Scheme the normal powers vested in the Income-tax Authorities under the Income-tax Ordinance are excluded and curtailed. An assessee availing the benefit of Self-Assessment Scheme derives enormous benefits by curtailing of the powers vested in the Income-tax Authorities and exclusion of the normal provisions of the Income Tax Ordinance and, therefore, an assessee cannot turn around and say that special provisions restricting and curtailing the powers of Income-tax Authorities are acceptable while the special provisions not favouring to the assessee are not acceptable. The Self-Assessment Scheme or any such other scheme is either to be accepted in toto or is to be refused in entirety.
In the present case there is no conflict in the provisions contained in the Self-Assessment Scheme and the provisions contained in the Income Tax Ordinance, 1979. "Income assessed" and "income last assessed" are not defined in section 2 of the Income Tax Ordinance, 1979 as these expressions are not relevant for the purpose of qualifying a return for the normal assessment under section 62/63. These provisions are relevant in the context of Self-Assessment Scheme only and as such have been defined in the Self Assessment Scheme and they are relevant for the purpose of Self-Assessment Scheme only as specifically stated in para. 6(b) of the Self-Assessment Scheme for the Assessment year 1992-93. The reason being that under the Self-Assessment Scheme the assessees are protected from the enquiries and investigations by the assessing officer and, therefore, by inclusion of such provisions the interest of revenue has been safeguarded which was necessary for striking a balance. Section 2(7) contains the definition of assessment and the definition contained therein is not in conflict with the definition of expression "income last assessed" contained in para 6(b) of the Self Assessment Scheme for the Assessment year 1992 93. The purpose and purport as well as connotation of the two provisions are absolutely different and, therefore, the question of any conflict or contradiction does not arise.
The Self-Assessment Scheme is not the only provision in the Income Tax Ordinance which is in the nature of special provision. There are several other provisions which deal with the special provisions regarding business of insurance and production of oil and natural gas and exploration and extraction of other mineral deposits. The assessments in respect of insurance, business and production of oil and natural gas is made in accordance with the provisions contained in 4th and 5th Schedules to the Income Tax Ordinance, 1979. Without going into further details it would be sufficient to say that the general provisions contained in the Income-tax Ordinance shall not apply to the assessments made under section 26 read with 4th Schedule and 5th Schedule to the Income Tax Ordinance, 1979 and both these Schedules contain their own definition clauses just as the Self-Assessment Scheme, contains definition clause for its own purposes.
The Self-Assessment Scheme framed by the C.B.R. under section, 59 is in the nature of special provision and, therefore, shall exclude and override the general provisions contained in the Income Tax Ordinance and secondly there is no conflict or contradiction in the definition contained in the Self-Assessment Scheme with any definition contained in section, 2 of the Income Tax Ordinance, 1979.
Chanda Motors v. C.B.R. 1990 PTD 948; 1996 PTD (Trib.) 388 and Central Insurance Co. and others v. C.B.R. 1993 SCMR 1232 = 1993 PTD 766 ref.
Aminuddin Ansari for Appellant.
Qamaruddin, D.R. for Respondent.
Date of hearing: 12th August, 1996.
ORDER
This appeal is directed against the order dated 25-5-1995 by the learned C.I.T. (A) Zone-VII, Karachi in I.T.A. No.802/VII, relating to the Assessment year 1992-93.
2. Heard Mr. Aminuddin Ansari, learned counsel for the appellant and Mr. Qamaruddin, learned representative for the department. The sole point contested in this appeal by Mr. Ansari is the exclusion of return of income filed by the appellant from the purview of Self-Assessment Scheme.
3. Briefly stated the relevant facts are that the appellant is an individual deriving income from jewellery business. The appellant filed return of income for the Assessment year 1992-93 under the Self-Assessment Scheme by declaring income at Rs.7,156. The assessing officer held that the return of i income did not qualify for being processed under the Self-Assessment Scheme as the income declared was less than the last assessed income for the Assessment year 1991-92. The assessment was thus completed under the normal law and the total income was determined at Rs.2,94,446. The appellant preferred first appeal which was dismissed and hence this second appeal before the Tribunal. As already stated Mr. Aminuddin Ansari has not contested the appeal on merits and facts. The sole contention pressed and contested by him relates to the exclusion of return of income from the purview of Self-Assessment Scheme. The Assessing Officer excluded the return of income filed by the appellant from the purview of Self-Assessment Scheme under para. 1(e) of the Self-Assessment Scheme for the Assessment year 1992-93 contained in Circular No. 16 of 1992. The above para. provided that the returns in cases where income declared is less than the income last assessed or the income last declared shall not qualify for acceptance under the Self-Assessment Scheme. The expression 'income last assessed' is defined in para. 6(b) of Circular No. 16 of 1992 as follows:
" Income last assessed means the total income assessed for the latest assessment year, prior to the Assessment year 1992-93 as it stands before the last date for filing of return of total income for the Assessment year 1992-93 after adjustment of loss due to unabsorbed depreciation or otherwise carried forward from the earlier assessment year, as modified in appeal s/revision/rectifications, etc. And where decision of appeal, etc. is communicated to the assessee after the last date for filing of return, 'income last assessed' shall mean as it stood before decision of appeal etc. "
4. Mr. Aminuddin Ansari has submitted that on the date of filing of return appeals against the assessment orders -for the Assessment years 1990-91 and 1991-92 were pending before C.I.T.(A) and the decisions therein were communicated to the appellant subsequently. He has further stated that the assessment for the Assessment year 1989-90 was completed as the income declared under the Self-Assessment Scheme at Rs.1,53,000 was accepted and thus according to Mr. Ansari last assessed income on the date of filing of return was for the Assessment year 1989-90 which was Rs.53,000 and, therefore, the income declared by the appellant for the Assessment year 1992-93 at Rs.71,056 was more than the last assessed income. He has further contended that as the appeal for the Assessment year 1991-92 was pending before the learned C.I.T.(A), therefore, the assessing officer was not justified in comparing the declared income for the Assessment year 1992-93 with the income assessed by the assessing officer for the Assessment year 1991-92 which was at Rs.1,10,965.
5. Mr. Aminuddin Ansari has frankly conceded that according to the definition of expression "income last assessed" as contained in para. 6(b) of the Self-Assessment Scheme for the Assessment year 1992-93, return filed by the appellant did not qualify for being processed under the Self-Assessment Scheme but his contention is that the definition in the Self-Assessment Scheme for the Assessment year 1992-93 is ultra vires being in conflict with the definition of "assessment" contained in section 2(7) of the Income Tax Ordinance according to which the assessment inclosure-assessment and additional assessment and cognate expression shall be construed accordingly. He has further contended that an appeal is a step in a series of judicial proceedings and an assessment attains finality after disposal of appeals, if any. In support of his contention he has placed reliance on the judgment of Hon'ble Sindh High Court in the case of Chanda Motors v. C.B.R. reported as 1990 PTD 948. He has maintained that the definition of income last assessed as contained in para. 6(b) of the Self-Assessment Scheme for the Assessment year 1992-93 to the extent that, "and where decision of appeal etc. is communicated to the assessee after the last date for filing of return, income last assessed shall mean as it stood before decision of appeal etc." is violative of the definition of assessment as contained in the main body of the Income Tax Ordinance, 1979 and interpreted by the superior Courts. He has urged that when an assessment order is assailed in appeal, the entire assessment order is reopened and cannot be deemed to be final assessment order and as such the C.B.R. could-not provide a definition which is not in consonance with the spirit and established definition of the expression "assessment" contained in the main body of the ordinance read with the established interpretation by the superior Courts. He has, thus, submitted that the definition of income last assessed as contained in para. 6(b) of the Self-Assessment Scheme for the Assessment year 1992-93 may be declared as ultra vires, inoperative and invalid and it may be held that the income last assessed should lie taken as the total income finally assessed for the latest Assessment year prior to the Assessment year 1992-93 meaning thereby an assessment which has attained finality after disposal of all the appeals/revisions, if any Mr. Aminuddin Ansari has proceeded on to argue that if his contention is accepted the income last assessed in the case of appellant shall be for the Assessment year 1989-90 which had attained finality and the-assessed income in the said year was Rs.53,000. In the said case when the returned income for the Assessment year 1992-93 is compared it is on higher side and thus it would not be a ground for excluding the return of income filed by the appellant from the scope of Self-Assessment Scheme for the Assessment year 1992-93.
6. Mr. Aminuddin Ansari has further contended that the C.B.R. has no authority to interpret the law and, therefore, the definition of income last assessed as contained in para. 6(b) of the Self-Assessment Scheme for the Assessment year 1992-93 may be held to be ultra vires and without jurisdiction. This contention is in addition to the submissions made by Mr. Aminuddin Ansari on the point of alleged conflict in the definition of income last assessed contained in the Self-Assessment Scheme for the Assessment year 1992-93 and the "assessment" contained in section 2(7) of the Income Tax Ordinance, 1979 read with the various judgments of the superior Courts to the effect that the appeal is a step in the assessment proceedings and the assessment attains finality on conclusion of the appeals/revisions, if any. In support of his contention Mr. Ansari has placed reliance on the judgment of this Tribunal reported as 1996 PTD (Trib). 388 in which it has been held that C.B.R. is not empowered to interpret any provision of law. The Tribunal has taken this view on the authority of dictum laid down by the Hon'ble Supreme Court of Pakistan in the case of Central Insurance Co. and others v. C.B.R. 1993 SCMR 1232 = 1993 PTD 766.
7. On the other hand Mr. Qamaruddin, learned representative for the department has supported the exclusion of return of income filed by the appellant from the purview of Self-Assessment Scheme. He has submitted that Mr. Aminuddin Ansari has conceded that according to the provisions contained in the Self-Assessment Scheme the return of income was rightly excluded from the purview of Self-Assessment Scheme as the income declared by the appellant was less than the income last assessed as defined in para. 6(b) of the Self-Assessment Scheme for the Assessment year 1992-93. He has further contended that the C.B.R. is empowered under section 59 of the Income Tax Ordinance, 1979 to frame scheme for the self-assessment for each year and the Self-Assessment Scheme so framed by the C.B.R. becomes a part and parcel of the Self-Assessment Scheme. According to the learned D.R. while framing scheme for the self assessment by virtue of authority vested under section 59(1) of the Income Tax Ordinance, 1979 the C.B.R. is empowered to frame special provisions and in doing so the C.B.R. is not bound or required to adhere to the normal and general provisions of law contained in the Income Tax Ordinance. The learned D.R. has submitted that the provisions contained in the Self-Assessment Scheme are in the nature of special provisions and, therefore, they shall override the general provisions contained in the Income Tax Ordinance, 1979. The learned D.R. has further submitted that the expressions "assessed income" or "income last assessed" are not defined in section 2 of the Income Tax Ordinance, 1979 which contains the definitions of various expressions used in the Income Tax Ordinance. He has further maintained that the definition of expressions "income assessed" or "income last assessed" are not relevant for the purpose of framing normal assessment as in the case of normal assessment. Every assessment is an independent unit and has to be considered on its own facts. However, in the case of Self-Assessment Scheme these expressions are relevant for the reason that if a return on income qualifies for being processed under Self-Assessment Scheme the powers of the departmental officers are drastically curtailed and they are not empowered to make any probe or enquiry into the facts alleged by an assessee and are to be accepted subject to certain just exceptions in accordance with the provisions contained in the Self-Assessment Scheme itself. The learned D.R. has submitted that in view of this fact definition of certain expressions not contained in the Income-tax Ordinance provided in the Self-Assessment Scheme and they are to be read in the context of Self-Assessment Scheme only and not in the broader context of the provisions contained in the Income Tax Ordinance, 1979. The learned D.R. has pointed out that according to para. 6(b) of the Self-Assessment Scheme for 1992-93 the definitions are relevant for the purpose of Self-Assessment Scheme for the Assessment year 1992-93 and have nothing to do with the normal provisions contained in the Income Tax Ordinance, 1979 which are relevant and applicable for the purpose of framing normal assessment. He has further contended that even if any definition is contained in section 2 of the Income Tax Ordinance, 1979 it is not to be read in absolute terms or in isolation as according to section 2 itself the definitions contained in section 2 are to be read as they are unless the context otherwise requires. He has, therefore, submitted that the definitions contained in section 2 of the Income Tax Ordinance, 1979 are to be read in the context in which the expression so defined have been used and thus the expressions contained in section 2 are not to be read in the context of the Self-Assessment Scheme which has its own connotations and expressions being in the nature of special provision in contrast to the general provisions of law contained in the Income Tax Ordinance, 1979.
8. I have carefully considered the contentions raised on behalf of the learned representatives for the parties. The contention of Mr. Aminuddin Ansari that the C.B.R. is not empowered to interpret any provision of law and his reliance in this behalf on the judgment of this Tribunal reported as 1996 PTD (Trib.) 388 and the judgment of Hon'ble Supreme Court of Pakistan in the case of Central Insurance Co. reported as 1993 SCMR 1232 = 1993 PTD. 766 is not relevant. The reason being that no question of interpretation is involved in the present proceedings and the, definition of "income last assessed" assailed by Mr. Aminuddin Ansari is not by way of interpretation but it is by, way of supporting legislation on the part of C.B.R. which is duly empowered to frame the Self-Assessment Scheme under section 59(1) of the Income Tax Ordinance, 1979. The submission of Mr. Aminuddin Ansari in this behalf, therefore, requires no further consideration. As regards the contention that the definition of expression "income last assessed" contained in para. 6(b) of the Self-Assessment Scheme for the Assessment year 1992-93 is ultra vires, illegal and inoperative being violative of the provisions contained in section 2(7) of the Income-tax Ordinance, 1979 read with the judgments of superior Courts that appeal is a step in the assessment proceedings, I am not persuaded to agree with the submission of Mr. Aminuddin Ansari. On the other hand I am of the opinion that there is lot of force in the submissions made by the learned D.R. When confronted with the question if the Self-Assessment Scheme envisaged under section 59(1) and contained in the circular issued by the C.B.R. by virtue of authority vested in it under section 59(1) of the Income Tax Ordinance, 1979 read with section 165 of the said Ordinance which provides that the C.B.R. may by notification in the official Gazette make rules for carrying out the purposes of the Ordinance and inter alia may make rules particularly prescribing the manner and procedure by which the income, profits and gains liable to tax and the tax payable under this Ordinance shall be determined in the case of persons to whom section, 59 applies, is in the nature of special provision. Mr. Aminuddin Ansari could not deny that the provisions contained in the Self-Assessment Scheme fall within the domain of special provisions of the Ordinance. He could not deny further that it is established principle of the interpretation of statutes that the special acts overrule the general enactments and the special provisions in a particular enactment overrule the general provisions contained therein. Mr. Aminuddin Ansari further conceded that in the common parlance with Income Tax Department and assessees, the assessments framed under sections 62 and 63 of the income Tax Ordinance are termed as normal assessments while in contradistinction the assessment framed under the Self-Assessment Scheme are not termed as normal assessments but are called self assessments. Thus I um of the considered opinion that there can be no cavil to the proposition that the assessments completed under sections 62 and 63 of the Income Tax Ordinance, 1979 are the normal assessments and all the general provisions contained in the Ordinance including the definitions in section 2 are applicable to such assessments until and unless specially excluded while assessments framed under section 59 fall within the ambit of special provisions and are to be governed within the framework of Self-Assessment Scheme formulated by the C.B.R. for each Assessment year separately. The general provisions of law contained in the Income Tax Ordinance if in conflict with the provisions contained in the Self-Assessment Scheme shall give way to the provisions contained in the Self-Assessment Scheme. In short the provisions contained in the Self-Assessment Scheme shall override the general provisions contained in the Income Tax Ordinance on the principle that the special provisions override the general provisions of law. In fact, the) schemes framed by the C.B.R. for self-assessment under section 59 are) complete code in themselves and any assessee desirous of availing the benefit of Self-Assessment Scheme has to adhere to the provisions contained therein and is not allowed to fall back on the general provisions contained in the) Income Tax Ordinance, 1979. Mr. Aminuddin Ansari conceded to the fact that with the enactment of Self-Assessment Scheme the normal powers vested in the income Tax Authorities under the Income Tax Ordinance are excluded and the normal powers vested in the Income Tax Authorities are curtailed An. assessee availing the benefit of Self-Assessment Scheme derived enormous benefits by curtailing of the powers vested in the Income-taxi authorities and exclusion of the normal provisions of the Income-taxi Ordinance and, therefore, an assessee cannot turn around and say that special provisions restricting and curtailing the powers of Income-tax authorities are acceptable while the special provisions not favouring to the assessee are not acceptable. The Self-Assessment Scheme or any such other scheme is either to be accepted in toto or is to be refused in entirety.
9. In addition to my above finding that the Self-Assessment Scheme is in the nature of special provision and shall exclude the general provisions contained in the Self-Assessment Scheme and consequently if the definitions contained in the two provisions of same expression are in conflict with each other the provisions contained in the Self-Assessment Scheme shall prevail, I am persuaded to agree with the submission of learned D.R. that in the present case there is no conflict in the provisions contained in the Self Assessment Scheme and the provisions contained in the Income Tax Ordinance, 1979. The learned D.R. has rightly argued that "income assessed' and "income last assessed" are not defined in section 2 of the Income-tax Ordinance, 1979 as these expressions are not relevant for the purpose of qualifying a return for the normal assessment under section 62/63. These provisions are relevant in the context of Self Assessment Scheme only and as such have been defined in the Self Assessment Scheme and they are relevant for the purpose of Self-Assessment Scheme only as specifically stated in para. 6(b) of the Self-Assessment Scheme for the Assessment year 1992-93. The reason being that under the Self-Assessment Scheme the assessees are protected from the enquiries and investigations by the assessing officer and, therefore, by inclusion of such provisions the interest of revenue has been safeguarded which was necessary for striking a balance. It is held that section 2(7) contains the definition of assessment and the definition contained therein is not in conflict with the definition of expression "income last assessed" contained in para. 6(b) of the Self-Assessment Scheme for the Assessment year 1992-93. The purpose and purport as well as connotation of the two provisions are absolutely different and, therefore, the question of any conflict or contradiction does not arise.
10. The Self-Assessment Scheme is not the only provision in the Income Tax Ordinance which is in the nature of special provision. There are several other provisions and here I would refer to the provisions contained in section 26 only which deal with the special provisions regarding business of insurance and production of oil and natural gas and exploration and extraction of other mineral deposits. The assessments in respect of insurance business and production of oil and natural gas is made in accordance with the provisions contained in 4th and 5th Schedules to the Income Tax Ordinance, 1979. Without going into further details it would be sufficient to say that the general provisions contained in the Income Tax Ordinance shall not apply to the assessments made under section, 26 read with 4th Schedule and 5th Schedule to the Income Tax Ordinance, 1979 and both these Schedules contain their own definition clauses just as the Self-Assessment Scheme, contains definition clause for its own purposes.
11. For the foregoing reasons it is held that first, the Self-Assessment' Scheme framed by the C.B.R. under section 59 is in the nature of special provision and, therefore, shall exclude and override the general provisions contained in the Income Tax Ordinance and accordingly there is no conflict or contradiction in the definition contained in the Self-Assessment Scheme with any definition contained in section, 2 of the Income Tax Ordinance, 1979. Coming to the facts of the present appeal which has already been stated in the earlier part of this order it is held that the assessing officer rightly excluded the return of income filed by the appellant from the purview of Self-Assessment Scheme. The orders of the learned two officers now are hereby maintained.
12. No other objection is pressed by learned counsel for the appellant. The appeal stands dismissed accordingly.
13. Before parting with this order I would like to express my appreciation and gratitude for the assistance provided to me by Mr. Aminuddin "Ansari, learned counsel for the appellant and Mr. Qamaruddin, learned representative for the department on the points of law canvassed during the course of arguments.
M.B.A./232/T Order accordingly.