I.T.A. NO.2047/KB OF 1995 VS I.T.A. NO.2047/KB OF 1995
1997 P T D (Trib.) 2269
[Income-tax Appellate Tribunal Pakistan]
Before Ch. Muhammad Ishaq, Judicial Member and Saleem Asghar Mian, Accountant Member
I.T.A. No.2047/KB of 1995, decided on 14/03/1996.
Income Tax Ordinance (XXXI of 1939)---
----S. 66-A---Revision by I.A.C.---Prize Bonds---Income and profits-- Chargeability to tax ---Assessee's case was finalised under Self-Assessment Scheme---Subsequently explanation was sought about income and profits obtained from Prize Bonds---Held, assessee's claim regarding exempted income as separate block of income in the return regarding which tax had been deducted was separate block of income not to be included in total income---No question of earlier assessments to be erroneous or prejudicial to Revenue arose---Action under S.66-A was uncalled for in circumstances.
Siddique Ch., A.R. for Appellant.
Muhammad Akram Tahir for Respondent.
Date of hearing: 12th March, 1996.
ORDER
CH. MUHAMMAD ISHAQ (JUDICIAL MEMBER).---This is an appeal by the assessee in respect of the assessment year 1991-92. It calls in question the order made by the I.A.C. of Income Tax/Wealth Tax, Range-I, Zone-A, Lahore under section 66-A of the Income Tax Ordinance, 1979.
2. He have heard the learned Counsel, learned D.R. and examined the record.
3. It is contended that the assessment for the year 1991-92 was processed under Self-Assessment Scheme. The income declared by the assessee was accepted and a copy of I.T.O. was accordingly delivered to the appellant.
4. Subsequently, however, the learned I.A.C., issued a notice under section 66-A of the Income Tax Ordinance, 1979 asking the assessee to explain as to why an amount of Rs.70,000 be not charged to tax. In reply, the appellant explained that the said amount of Rs.70,000 was his income from the Prize Bonds which is exempted by law. However, he explained that the profit obtained from the Prize Bonds is a separate entity for which the law prescribed on independent rate. The assessee claims that the tax on the said amount was duly-deducted by the authorities at the time of payment of prize money. Accordingly, he asserted that there was no justification for the Revenue to open the assessment once finalised under the Self-Assessment Scheme. He, therefore, challenges the assumption of jurisdiction by the Inspecting Assistant Commissioner under section 66-A of the Income Tax Ordinance, 1979. The impugned order shows that the observations of the I.A.C., record the afore-stated foots in the second last para. on page-2 of the impugned order whereby it is concluded that the assessment framed under Self-Assessment Scheme was erroneous and, therefore, prejudicial to the interest of the Revenue. Accordingly, he cancelled the assessment for de novo proceedings.
5. The question in this case is that whether the amount of income shown in respect of the prize money is at all a separate block of income and an independent entity or else it is to be included in the total income of assessee. This question has been powered by the Tribunal in the past. The Tribunal holds the view that the assessee's claim regarding the exempted income shown at Rs.70,000 as separate block of income in the return in respect of which the tax has been deducted at 7.5 % is certainly a separate block of income not to be included in the total income. The reason being that a separate independent rate of tax at 7.5 % has been prescribed in respect of the prize money obtained by the assessee which was duly deducted at Rs.3,750 by the concerned department. The factual position being so, there was no question of the earlier assessments, having been finalised under Self Assessment Scheme to be erroneous or prejudicial to Revenue. Consequently, no prejudice to the Revenue appears to have been caused, in the circumstances of the case.
6. We are of that view that in the afore-stated circumstances, the action taken by the learned I.A.C., under the provisions of section 66-A of the) Income Tax Ordinance, 1979 was uncalled for under the law.
7. In view of the afore-stated reasons, the appeal succeeds and is accordingly allowed. The order passed by the I.A.C., is, consequently cancelled. The appeal is disposed of as indicated above.
M.S./283/Trib Appeal allowed.