I.T.AS. NOS.84 AND 85/LB OF 1994 VS I.T.AS. NOS.84 AND 85/LB OF 1994
1997 P T D (Trib.) 2079
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Mushtaq, Accountant Member
T.As. Nos.84 and 85/LB of 1994, decided on 13/12/1994.
(a) Income Tax Ordinance (XXXI of 1979)---
----Ss.87 & 156---Additional tax---Changeability---Rectification of mistake-- Failure to pay advance tax---Liability---Order under S.156---Income Tax Ordinance, 1979---Requirements of---Order for charging additional tax must be a speaking order indicating details as to how mistake occurred---Order must indicate liability to pay advance tax, date of payment, mode of calculation of additional tax and period of default.
(b) Income Tax Ordinance (XXXI of 1979)---
----Ss.87 & 156---Failure to pay additional tax---Rectification of mistake-- Additional tax made payable through combined order for more than one assessment year was held not speaking order.
(c) Income Tax Ordinance (XXXI of 1979)---
----S. 80-C---Presumptive tax---Cotton ginners---Cases of cotton ginners, held, were covered by presumptive tax under S.80-C of Ordinance.
Mrs. Sabiha Mujahid, D.R. for Appellant.
M. Hayat Khan for Respondent.
Date of hearing: 13th December; 1994.
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-I, Multan vide A.O. No.503 to 505, dated 7-12-1993.
2. The disputed issues in these two appeals being common and inter linked these two appeals are disposed of by a combined order as under.
3. The respondent in the 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, a 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 request to explanation by 21-10-1992, on which date the assessee appeared and again sought for the stipulated date i.e. 29-10-1992. The assessee neither filed any explanation nor applied for further extend, 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 sector, 1.06 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 ITO was not justifier levying the additional tax.
5. The learned CIT(A) confirmed the levy of additional tax fore assessment year 1989-90. However, for the rest of the years additional levied by the Assessing Officer was deleted with the following observation.
"For the assessment year 1990-91, IT-30 Form dated 22-5-501 under section 156 reveals a refund of Rs.13833 which is` 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 1992 reveals credit of tax paid under section 50 and result in N.D Besides agreement between PCGA and CBR allowing exemption the partners from tax pertaining to assessment year 1991-92 confused by the learned A.R. for assessment year 1990-91. Levy for this also directed to be deleted. "
6. The Income Tax Department feels aggrieved by the relief all by the learned CIT(A) as above. As per grounds of appeals it has contended on behalf of the Income Tax Department for the above two that the learned CIT(A) was not justified in deleting the additional 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 charging 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 never 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.
C.M.S./153/Trib Appeals dismissed.