I.T.A. NO.391/KB OF !995-96, DECIDED ON 23RD SEPTEMBER, 1997. VS I.T.A. NO.391/KB OF !995-96, DECIDED ON 23RD SEPTEMBER, 1997., 1998 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 1393 (1997)

Income Tax Ordinance (XXXI of 1919)---

--S.59---Self-Assessment Scheme (1992-93), para. 4---C.B.R. Circular No.16 of 1992, dated 1-7-1992, para. 4---Return under Self-Assessment Scheme (1992-93) was filed by assessee which qualified for acceptance under the said Scheme---No deficiency in the said return having been pointed out by the Department, its selection for total audit through random ballot was ab initio illegal.

I.T.O. v. Chappal Builders 1993 PTD 1108 = (1979) 118 ITR 326 and C.I.T. v. Siemen A.G. 1991 PTD 488 ref.

Muhammad Javed Zakaria for Appellant.

Amjad Malik, D.R. for Respondent.

Date of hearing: 20th September, 1997.

ORDER

This appeal at the instance of the assessee is directed against the order of the learned Appellate Additional Commissioner of Income-tax (Appeals) dated 19-12-1995. The appellant claims the case to be immune from total audit and, therefore, agitates its exclusion from Self-Assessment Scheme. Alternatively the appellant agitates the limited relief given by the learned A.A.C. in the estimate of income.

2. Mr. Javed Zakaria, Advocate, the learned authorized representative, submitted that the appellant/assessee a goldsmith had filed his return of income under the Self-Assessment Scheme. The return qualified for acceptance under the scheme. No deficiency in the return was pointed out by the income-tax officer. The case of the assessee for the assessment year 1992-93 was selected for total audit and the assessment order was framed under normal law. It was submitted that as per note to para. 4 of the Self Assessment Scheme (Circular No. 16 of 1992, dated 1st July, 1992) for the assessment year 1992-93 an assurance has been given that "a case once selected through computer ballot will not be earmarked for such ballot in the next two years". It was submitted that in view of this assurance the case of the appellant could not be selected for. total audit for the assessment year 1994-95. It was submitted that the learned A.A.C. instead of adjudicating on the above issue raised a new issue which has not been mentioned in the assessment order that the assessee had not declared and paid tax to the extent of 10 % more in the year under consideration which was required for qualifying under the Self-Assessment Scheme. The learned A.R. submitted that this observation should not have been made for rejecting assessee's appeal by the learned A.A.C., firstly for the reason that this was not the basis for selecting the case of the assessee for total audit. It was submitted that if this allegation of the learned A.A.C. was correct, the case of the assessee would not qualify to be processed under the Self-Assessment Scheme. The department as in the assessment order has clearly stated that the return has been filed under the Self-Assessment Scheme and that the case of the assessee has been selected for total audit through random ballot. As regards the payment of tax made by the assessee, it is more than 10% of the tax paid in the earlier year. Necessary proof has been filed with the return of income which has been accepted by the department by confirming that the return has been filed under the Self-Assessment Scheme which has been selected for total audit through random ballot. It was pleaded that the department cannot back out from the assurance given in the Self-Assessment Scheme for the assessment year 1992-93. The return of the assessee qualified for assessment under the Self-Assessment Scheme and the department has no legal right to select it for total audit. The vested interest of the assessee which has been created by the Self-Assessment Scheme for the assessment year 1992-93 could not be arbitrarily taken away by the Income Tax Officer. The learned authorised representative relied on a number of case-law and referred the cases reported as I.T.O. v. Chappal Builders 1993 PTD 1108, (1979) 118 ITR 326 and C.I.T. v. Sieman A.G. 1991 PTD 488.

3. The learned departmental representative, however, supported the impugned order and submitted that the assessee at the time of assessment did not object to the selection of the case for total audit through random ballot at the assessment stage. No other objection was, however, raised and defense against the arguments of the learned A.R. recorded above.

4. The learned A.R. replied to the learned D.Rs. objection submitted that the assessee had protested against the selection of its case for total audit and vide later, dated 27th May, 1995, which was filed (under protest), it was made clear to the Commissioner of Income-tax that the case of the assessee could not be selected for total audit due to immunity given in the Self Assessment Scheme for the year 1992-93. Compliance of I.T.O.'s direction to file wealth statement and details of personal expenses etc. was made under protest reserving the right to claim immunity from total audit.

5. I have considered the submissions made by the learned representatives. I agree with the statement and pleadings of the learned A.R. The return filed by the assessee for the assessment year 1994-95 qualified for acceptance under the Self-Assessment Scheme. For the said year the case of the assessee could not be selected for total audit through random ballot as guaranteed by the Self-Assessment Scheme for 1992-93. The selection of the case for total audit for the assessment year 1994-95 was therefore, ab initio illegal. In this view of the matter, the orders of the lower Authorities are vacated and it is directed that the return filed by the assessee for the assessment year 1994-95 should be accepted under the Self-Assessment Scheme.

6. In view of the above decision given by me, merits of the case are not being discussed. The appeal succeeds in the manner indicated above.

M.B.A./509/Trib.Appeal accepted.