I.T.AS. NOS. 5314/LB AND 5315/LB OF 1991-92 VS I.T.AS. NOS. 5314/LB AND 5315/LB OF 1991-92
1997 P T D (Trib.) 2381
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Tauqir Afzal Malik, Judicial Member and Iftikhar Ahmad Bajwa, Accountant Member
I.T.As. Nos.5314/LB and 5315/LB of 1991-92, decided on 23/05/1996.
Income Tax Ordinance (XXXI of 1979)---
----Ss. 13(1)(a), 63 & 65---Unexplained investment---Addition---Absence of new material before Assessing Officer---Re-opening of assessment-- Validity--Assessee was assessed under Self-Assessment Scheme, later on case was re-opened on the ground that at the time of issuance of refund, it was noted that assessee made heavy imports which were impossible in view of available funds---Assessment was accordingly completed and additions were made---First Appellate Authority found that treatment was arbitrary and illegal and based on suspicion---Tribunal in second appeal held that content of import was available on record at the time of assessment, no material showing escapement was brought on record, therefore, orders under S. 63/65 being illegal and void were annulled and original order of assessment was restored.
Zulfiqar Ali Sh., I.T.P. for Appellant.
Zafar Ahmad, D.R. for Respondent.
Date of hearing: 23rd May, 1996.
ORDER
MUHAMMAD TAUQIR AFZAL MALIK (JUDICIAL MEMBER). ---These are two appeals by the appellant first is that the CIT(A) is not justified in confirming the re-opening of assessment which 'was made by the I.T.O. in contravention of provisions of subsection (2) of section 65 of the Income Tax Ordinance, 1979. The learned Commissioner has ignored the fact that order under section 63/65 was merely a change of opinion.
2. That the re-opening of assessment and additions under section 13(1)(a) are also unjustified.
3. That the application of G. P. Rate and other additions under section 13(1)(a) were also without jurisdiction.
4. Arguments heard record perused.
5. The appellant is an individual derives income from import and sale of auto parts. Original assessment in this case was finalised under Self Assessment Scheme at total income of Rs.98,000 and Rs.99,000 respectively. The assessments were re-opened on the ground that at the time of issuance of refund, it was noted that the appellant had made heavy imports which were not possible in view of the available capital with the assessee. The assessments were accordingly made at Rs.10,26,305 and Rs.16,00,000 respectively. In the assessment year 1988-89 additions under section 13(1)(aa) was made at Rs.10,26,305 while no such additions were made in the year 1989-90 on the account that these were covered by trading additions.
6. The appellant challenged the assessment under section 63/65. The CIT(A) after agreeing to his contention that the assessments are arbitrary, illegal and whole action was based on suspicion. No additional information was either brought on record or was available with department which could justify the issuance of notice under section 65. The issuance of notice under section 65 by the LT .O. was illegal and void ab initio, as the ITO had not pointed out whether there was under assessment or concealment by the appellant. Set aside the order of the I.T.O. for de novo decision.
7. According to us:---
(i) The content of import was available on record at the time of both these assessments, as the amount of refund was made out in IT-30 firm.
(ii) No material showing under assessment, escapement of income from tax orconcealment was brought on record.
8. In view of the above the orders under section 63/65 are illegal and void ab initio. They are annulled and the original orders of the assessments, for the years under appeal are restored.
9. The appeals are accepted as above.
C.M.S./386/Trib. Appeal allowed.