I.T.A. NO.2210/KB OF 1995-96 VS I.T.A. NO.2210/KB OF 1995-96
1997 P T D (Trib.) 911
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Mujibullah Siddiqui, Chairman and S.M. Sibtain, Accountant Member
I.T.A. No. 2210/KB of 1995-96, decided on 24/12/1996.
Income Tax Ordinance (XXXI of 1979)---
----S. 154---Civil Procedure Code (V of 1908), O.V, R.19---Service of notice---Service of notice issued under Ss.61 & 62, Income Tax Ordinance, 1979 by affixation on the business premises---Assessing Officer, without examining the process-server on oath, completed the ex parte assessment-- Mandatory requirement of S.154, Income Tax Ordinance, 1979 and O.V, R.19, Civil Procedure Code, 1908 having not been satisfied by the Assessing Officer, Tribunal in circumstances, set aside the assessment.
Mst. Azizan v. Mehr Din 1993 CLC 1187 ref.
Muhammad Mehtab Khan for Appellant.
Inayatullah Kashani, D.R. for Respondent.
Date of hearing: 24th December, 1996.
ORDER
MUHAMMAD MUJIBULLAH SIDDIQUI, CHAIRMAN.---This appeal at the instance of assessee is directed against the order, dated 25-2-1986 by the learned C.I.T. (A) Zone, Hyderabad in I.T.A. No.330/E/Hyd., relating to the assessment year 1992-93.
2. Heard Mr. Muhammad Mehtab Khan, Advocate for the appellant and Mr. Inayatullah Kashani, learned representative for the Department.
3. The appellant has raised objection to the ex parte proceedings under section 63, without service of notice under section 61 of the Income Tax Ordinance, 1979. Tracing out the chequered facts of this case Mr. Mehtab Khan has stated that the proceedings were initiated on an information received from Collectorate of Customs (Export, Customs House, Karachi) to the effect that appellant fraudulently received export rebate of Rs.3,49,13,851. Notice under sections 56 and 58(1) were issued which were duty served on Mr. Muhammad, Sohail, one of the members of the A.O.P. in jail. Subsequently, jurisdiction was transferred from Zone-A to Zone-E, Karachi and the subsequent assessing officer, to wit, Assistant Commissioner of Income-tax, Circular E-2, Zone-E, Karachi, issued fresh notices under sections 61 and 62 which were not served. Ultimately on 3-6-1995 the assessing officer directed the Income Tax Inspector to serve notice by affixture. The notices were handed over to the Income Tax Inspector who submitted report on 7-6-1995 to the effect that the business premises of the appellant was closed and the members of A.O.P. were not available, therefore, the notices were served by affixture on the business premises of appellant. The assessing office on the basis of this report by the Income Tax Inspector proceeded ex parte and completed the assessment under section at the total income of Rs.3,49,13,851. The appellant preferred first appeal without any success and hence this second appeal before us. Mr. Mehtab Khan has submitted that under section 154 of the Income Tax Ordinance, 1979 the assessing officer could serve the appellant either by poet or in the manner provided for service of summons issued by a Court uncut the Code of Civil Procedure, 1908. The assessing officer has not issued notice by post and has resorted to the service of notice in the manner provided in the Code of Civil Procedure. Mr. Mehtab Khan has contended that the relevant provisions contained in the Civil Procedure Code are Order V, Rule 17 read with Order V, Rule 19. It is permitted that where summons is returned under Rule 17 (which relates to the service of summons by affixture) the Court shall if the return under that rule has not been verified by the affidavit of the serving officer and may if it has been so verified examine the serving officer on oath or cause him to be examined by another Court touching his proceedings and may make such further enquiry in t1w matter as it Thinks fit and shall either declare that the summons has been duly, served or order such service as it thinks fit. Mr. Mehtab Khan has proceeded on to argue that under the provisions contained in Order V, Rule 19, C.P.C the assessing officer was required to examine the Income Tax Inspector (Process-Server) on oath as his statement to respect of the service affixture was not sworn on affidavit. Since the assessing officer has failed to examine the Process-Server on oath, therefore, the mandatory requirement of law have not been fulfilled and as such there is no proper service of notice on the appellant according to law. In support of his contention that with examining the Process-Server on oath the substitute service is not proper Mr. Mehtab Khan has placed reliance on the judgment of Hon'ble Lahore High Court in the case of Mst. Azizan v. Mehr Din, 1993 CLC 1187. Mr. Mehtab Khan on the basis of above contentions has submitted that the assessment may be annulled.
4. The learned D.R. has supported the orders of the learned to officers below but he has not denied the facts as narrated by Mr. Mehtab Khan.
4-A. We have carefully considered the contentions raised by the learned representatives for the parties. The record has been perused by us with the assistance of learned representatives for the parties and on perusal of record we are persuaded to agree with the submission of Mr. Mehtab Khan that the assessing officer has failed to make compliance of the mandatory provision contained in Order V, Rule 19 of the Civil Procedure Code read with section 154 of the Income Tax Ordinance, 1979. However, we are not persuaded to agree with his submission that in the facts and circumstances of the case the assessment order may be annulled. The reason being that I admittedly notice under section 56 was served on Mr. Muhammad Sohail, one of the members of A. O. P. and the assessing officer acquired jurisdiction', to proceed with the assessment by service of notice under section 56. All other proceedings were admittedly with jurisdiction and the objection raised by the appellant to the manner of service of notice is not an objection to the proceedings but in fact it amounts to objection in the proceedings which will not make the entire proceedings void ab initio. In the above circumstances we are of the opinion that it would be in the interest of justice to set aside the assessment with the direction to proceed afresh from the stage where the proceedings were on 3-6-1995 when the notices were issued to the appellant. Since the case has become sufficiently old, therefore, in order to avoid further delay in the proceedings it is directed that the appellant shall appear before the assessing officer on 24-3-1997 for further proceedings without any further notice from the assessing officer. The direction given by this Court to the learned counsel for the appellant shall be deemed to be notice for appearance of appellant before the assessing officer. On appearance of appellant before the assessing officer he shall be served with all the necessary notices deemed fit by the assessing officer and thereafter the proceedings shall be conducted in accordance with the law and the assessment shall be completed after considering the explanations furnished, if any, by the Appellant and evidence brought on record.
6. The appeal is allowed as above.
7. Order announced in presence of the learned representatives for the parties.
M.B.A./307/Trib Appeal allowed.