I.T.AS. NOS.91/KB AND 92/KB OF 1998-99, DECIDED ON 5TH JANUARY, 1999. VS I.T.AS. NOS.91/KB AND 92/KB OF 1998-99, DECIDED ON 5TH JANUARY, 1999.V
1999 P T D (Trib.) 1433
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Mujibullah Siddiqui, Chairman and Muhammad Mehboob Alam, Accountant Member
I.T.As. Nos.91/KB and 92/KB of 1998-99, decided on 05/01/1999.
(a) Words and phrases---
----"Levy"---Meaning and connotation.
Messrs Friends Sons v. Dy. Collector, Central Excise and Sales Tax 1989 PTD 961 and Abdul Rashid v. Central Board of Revenue and others PLD 1965 Pesh. 249 ref.
(b) Words and phrases---
----"Assessment"---Connotation.
16,15 . Commissioner, Madras v. Muthukaruppan AIR 1'9'39 Mad. 376 rel
(c) Income Tax Ordinance (XXXI of 1979)---
---Ss.89, 62 & 80-D---Assessment made under S.62, Income Tax Ordinance, 1979---Charge of additional tax for failure to pay tax or penalty---Minimum tax under S.80-D of the Ordinance---No payment of demand during appeal---Appeal was dismissed---Assessing Officer charged additional tax for late payment of minimum tax under S.80-D, Income Tax Ordinance, 1979---First Appellate Authority cancelled levy of additional tax on the contention of assessee that no additional tax could be charged for default of payment under S.80-D and said section was not contained in Chaps. VII & XI of the Income Tax Ordinance, 1979---Validity---Held, that the tax was charged under S.80-D and process of assessment of determining of tax liability was to be made under S.62 meaning thereby that tax was levied under Chap. VII of the Income Tax Ordinance, 1979---Additional tax, thus, could be levied on failure to pay tax created as a result of assessment under S.62 of the Income Tax Ordinance, 1979---Order of First Appellate Authority was vacated and the order of Assessing Officer under S.89 of the Ordinance was restored.
(d) Income Tax Ordinance (XXXI of 1979)--
----Ss.89 & 85(2)---Additional tax---Assessment year 1991-92---Payment of tax was stayed by virtue of the proviso to S.85(2), Income Tax Ordinance, 1979---Additional tax was charged a 24 % on demand after the decision of appeal by the Assessing Officer ---Assessee contended that additional tax should be charged Q 15 % according to the prevalent law relating to the relevant assessment year---Validity---Income-tax Appellate Tribunal confirmed the order of the Assessing Officer on the basis of proviso inserted in S.89, Income Tax Ordinance, 1979 by Finance Act, 1991 and omitted by Finance Act, 1996---Contention of assessee was repelled in circumstances.
Manzoor Qureshi, D.R. for Appellant. Sirajul Haque Memon for Respondent.
Date of hearing: 26th September, 1998.
ORDER
MUHAMMAD MUJIBULLAH SIDDIQUI (CHAIRMAN). ---The above appeals at the instance of department are directed against the order, dated 21-4-1998 by the learned CIT(A), Zone-I, Karachi in I.T.As. Nos.409 and 410 of-1997, relating to the assessment years 1991-92 and 1994-95.
2. The common objection raised by the department is that the learned C.I.T.(A) was not justified to cancel the orders under section 89 for the reason that no additional tax under section 89 can be charged in case of default committed in payment of tax due under section 54 which also includes tax due under section 80-D..
3. Heard Mr. Manzoor Qureshi, learned representative for the department and Mr. Sirajul Haque Memon, learned counsel for the respondent.
4. Briefly stated the relevant facts are that the Deputy Commissioner of Income-tax, Circle C-7, Cos.I, Karachi vide order, dated 14-3-1995 imposed additional tax under section 89 of the Income Tax Ordinance, 1979 which is reproduced below:---
"Assessment was completed under section 62 on 22-10-1992 creating demand of Rs.794,222. Assessee preferred appeal and the learned CIT(A) vide his Order, No.650 of 1992, dated 2-5-1993 has dismissed the appeal. No payment has so far been made. Therefore additional tax under section 89 Q 24% is leviable from 23-11-1992 to 20-12-1994 for 758 days is leviable. The assessee vide this Office Letter No.329, dated 23-2-1995 was asked to file objection if any to the levy of additional tax under section 89. Assessee failed to give any reply to it.
In view of above additional tax under section 89 Q 24 % is charged for the above period which comes to Rs.3,95,849."
5. The same assessing officer made an order, dated 10-3-1996 for the assessment year 1994-95 which reads as follows:---
"Assessment in this case was finalised under section 62 on 28-3-1995 by creating net demand of Rs.10,01,371 which was payable by 28-4-1995. The assessee has paid a sum of Rs.887,667 on 1-12-1995. Due to late payment, additional tax under section 89
is leviable. The assessee was asked to file objection if any to the levy of additional tax under section 89. Vide letter, dated 18-2-1996 has stated that credit of tax paid at Rs.95,165 was not allowed at the time of assessment. The contention of the assessee has beenexamined and additional tax under section 89 is charged on the amount paid and not on whole amount.
In view of above, additional tax under section 89 is charged as follows:--
887.667 x 15 x 272 Rs.99,224"
65x 100
6. The respondent feeling aggrieved preferred first appeal before the learned C.I.T.(A), Zone-I, Karachi contending that the additional tax under section 89 has been levied for late payment of minimum tax liabilities due under section 80-D of the Income Tax Ordinance, 1979. It was contended that the orders under section 89 were ab initio illegal and ultra vires, as the provision of section 89 was not applicable in case of default committed under section 80-D read with section 54 of the Income Tax Ordinance, 1979. It was further submitted before the learned C.I.T.(A) that in the assessment order the demand was created on the basis of tax payable under section 80-D of the Income Tax Ordinance and the additional tax under section 89 has been levied for the non-payment of such tax which was not sustainable in law because it is provided in section 89 that where any assessee fails to pay the whole or any part of the taxes levied under Chapter-VII or the whole or any part of any penalty levied under Chapter-XI he shall be liable to pay additional taxes. It was further contended that section 80-D is not contained in Chapters-VII and XI of the Income Tax Ordinance and is contained in Chapter VIII of the Income Tax Ordinance, 1979, therefore, in the event of default of payment of tax charged under section 80-D no additional tax under section 89 can be levied. It was further contended before the learned CIT(A) that the charge of the additional tax under section 89 on account of non payment of tax under section 80-D has already been decided by the Regional Commissioner of Income-tax, Karachi vide RP Nos. l and 2 of 1996-97/299, dated 11-6-1996 and by CIT, Cos. II, Karachi vide RP No. JUD/RP No. 115, dated 28-4-1997 and C.I.T.(A), Hyderabad vide Appeals Nos.274 to 277, dated 13-11-1997.
7. The learned C.I.T.(A) agreed with the contention and observed that the legal position as expounded by his predecessor was quite clear to the effect that the additional tax under section 89 cannot be charged in default committed in payment of tax due under section 54 which also includes tax due under section 80-D. With these observations the learned C.I.T.(A) held that the orders under section 89 were illegal and void in law. The orders were cancelled accordingly.
8. Being aggrieved the department has preferred these appeals before us.
9. The learned D.R. has submitted that the learned C.I.T.(A) has confused the facts and has misapplied the provision of law. He has contended that the assessing officer imposed additional tax under section 89 of the Income Tax Ordinance, 1979 which has nothing to do with any default in payment of tax under section 54. The additional tax for failure to pay the tax with the return as required under section 54 of the Income-tax Ordinance is to be levied under section 88 and not under section 89 of the Income-tax Ordinance. He has pointed out that the additional tax under section 89 is charged where any assessee fails to pay the whole or any part of the tax levied under Chapter-VII or the whole or any part of any penalty levied under Chapter-XI, and, therefore, reference to section 54 in the impugned order of learned C.I.T.(A) is not relevant at all which is in Chapter-VI of the Income Tax Ordinance, 1979. He has further submitted that the bare perusal of the orders under section 89 shows that reference has been made to the completion of assessment order under section 62 and the creation of demand as a result thereof. The period of default shown in the orders under section 89 are also from the date of payment in pursuance of the assessment orders and, thus, no issue pertaining to any default under section 54 was involved and no order was made under section 88 of the Income-tax Ordinance which provides for charge of additional tax for failure of assessee to pay tax under section 54. The learned D.R. has further submitted that on legal plane also the impugned order of learned C.I.T.(A) is not sustainable. He has submitted that section 89 refers to the failure of an assessee in paying whole or any part of any tax levied under Chapter-VII and the assessment orders in pursuance whereof demands were created in both the assessment years under appeal were made under section 62 of the Income-tax Ordinance which is in Chapter-VII of the Income Tax Ordinance, 1979. He has submitted that section 80-D is a charging section in the same manner as sections 9 and 10 are the charging sections, while tax is levied under sections 59, 59-A, 62, 63 or section 65 of the Income-tax Ordinance which sections are referred to in section 88 of the Income-tax Ordinance and are contained in Chapter-VII of the Income Tax Ordinance, 1979. He has further submitted that in case of normal assessment the tax is always levied under Chapter-VII of the Income-tax Ordinance irrespective of the charging provisions. He has further contended that the learned C.I.T.(A) has confused the charging provisions with the provisions contained in the Income-tax Ordinance for the levy of tax which means a process of assessment through which the demand of tax is created. He has contended that the impugned order of learned C.I.T.(A) being misdirected and unwarranted in law may be vacated and the orders under section 89 levying additional tax on admitted default in payment of tax payable in pursuance of assessment orders under section 62 may be restored.
10. On the other hand Mr. Sirajul Haque Memon, learned counsel for the respondent has supported the impugned order of learned CIT(A). Mr. Sirajul, Haque Memon has submitted that the finding on the issue depends on the point if any tax is levied under Chapter-VII of the Income Tax Ordinance, 1979. He has submitted that the entire issue revolves around the interpretation of expressions levy and charge. He has submitted that the expression levy and charge have been considered and their connotations examined in depth by Justice Rustam S. Sidwa of Lahore High Court in the case of M/s. Friends Sons v. Dy. Collector, Central Excise and Sales Tax reported as 1989 PTD 961. Mr. Sirajul Haque Menton has next contended that if it is held that the additional tax under section 89 can be charged on the failure to pay the tax charged under section 80-D, the rate of additional tax in the assessment year 1991-92 may be reduced from 24 % to 15 % as the rate of additional tax was enhanced by Finance Act, 1996 which is not applicable to the assessment year 1991-92. He has submitted that the law as prevailing in the assessment year under appeal shall be applicable for the purpose of charging tax as well as additional tax.
11. We have carefully considered the facts available on record and the contentions raised by the learned representatives for the parties. The scope of provisions contained in section 89 of the Income Tax Ordinance, 1979 (hereinafter referred to as the Ordinance) require consideration and, therefore, for the sake of convenience it is reproduced below:---
"89. Charge of additional tax for failure to pay tax or penalty.---
Where any assessee fails to pay the whole or any part of the tax levied under Chapter-VII or the whole or any part of any penalty levied under Chapter-XI, or has been allowed stay of payment or payment in instalments of the tax under subsection (2) of section 85, he shall be liable to pay additional tax at the rate of fifteen per cent. per annum on the amount of such tax or penalty or any part thereof, as the case may be, which has not been paid; and such additional tax shall be calculated from the date on which such tax or penalty or part thereof, as the case may be, was originally payable to the date on which it is paid or, in respect of each instalment, the date on which it is paid. "
12. We agree with the submission of Mr. Sirajul Haque Memon that the decision of the issue under consideration revolves on the connotation of the word 'levy'. Since the interpretation of this word is key to the issue under consideration, therefore, we would like to dilate on it in some details. As already referred, Mr. Sirajul Haque Memon has brought to our notice the judgment of Honourable Lahore High Court reported as 1989 PTD 961 in which Hon'ble Justice Rustam S. Sidhwa, has examined the connotation of word 'levy'. The relevant excerpts from the above judgment are reproduced below:---
'" 18. There are three distinct types of provisions generally in every fiscal enactment. The charging provisions, which relate to the levy or charge of the tax, which usually state that tax is to be levied and on what matter, or goods or income and in which manner and at what rate and matters relevant thereto. The assessment provisions, which deal with the assessment, calculation or quantification of the tax for the purposes of determining the amount of tax due and payable or which has escaped collection or has been under assessed or assessed at a lower rate or on which excessive relief or refund has been allowed. The collection provisions, which relate to the mode and manner of receipt or collection of the tax. The charging sections have to be strictly construed and any benefit found therein has to be given to the tax-payer. However, the assessment and collection provisions are merely the machinery sections and they can be liberally construed.
19. The words 'levied', 'charged', 'paid', and 'collected' generally used in charging sections do not indicate that assessment provisions or collection provisions are included in the charging sections. These words are only used in a general sense to indicate that the duty or tax would be demanded or collected at the rate or in the manner as provided by the charging section. The procedures as regards assessment and collection are separately provided for. The words 'where any Central Act enacts that income-tax shall be charged for any year at any rate or rates, tax at that rate or those rates shall be charged for that year', as appearing in section 3 the Income-tax Act, 1922, did not mean that the word 'charged' gives any indication that the provisions of assessment are included in that section. Likewise, the words 'there shall be charged, levied and paid ...income-tax in respect of the total income', as appearing in section 9 of the Income Tax Ordinance, 1979 also do not mean that the provision with regard to levy, assessment and collection are provided in this section. They are rather provided separately in Chapters III, VII and IX, similarly the words 'there shall be levied and collected tax in section 3 of the Sales Tax Act, 1951', and the words 'there shall be levied and collected in such manner as may be prescribed duties of excise..., in section 3 of the Central Excises and Salt Act, 1944, do not mean that the assessment and collection provisions all stand included in the said charging sections.
20. However, it is possible to conceive of cases where the words 'levied' or 'collected' in the charging sections of certain enactments have perforce to be construed as covering assessment proceedings. In such cases the word 'levied' or 'charged' could validly be construed as including assessment or the entire process of collecting the tax. But this would be on the principle of implied construction or necessity. However, since the present case does not fall in this category, I need not dwell on it any further.
21. The words 'lieved', 'charged', 'collected', 'paid' and 'payable' are generally found connected with charging sections in fiscal enactments. In charging section the word 'levied' generally means to raise, impose or collect tax or duty. In Abdul Rashid v. Central Board of Revenue and others (PLD 1965 Pesh. 249) the word, 'levied', as used in Articles 48 and 237 of the Constitution of 1962, was held to relate to the charging provision. i.e. fixation of a rate of , duty. By itself the words 'levied', 'charged' and 'collected' does not impose the charge. The charge or imposition arises by virtue of the language of the charging sections itself. These words only point or give indications to the element of demand namely, that it will be demanded, claimed or collected at the rate arid/or in the manner provided in the charging section. However, apart from charging sections, the word 'levy' in other parts of fiscal enactments could indicate not only the power to impose or raise a tax or duty, but also to assess or collect the same, depending upon how, where and in what context the word is used and whether such extended meaning is possible. There is no cardinal rule that wherever the word 'levy' or 'levied' occurs, the element of assessment or collection must be deemed included. "
13. From the perusal of above findings it appears that the word 'levied' to be interpreted and connotation to it is to be assigned with reference to the context in which the word has been used by the Legislature. In some uses the word 'levy' may be restricted to the tax that will be raised or collected and in other cases a larger meaning to include the power to assess to tax is also warranted. We will examine the meaning assigned to the word levy in various dictionaries to ascertain the scope and connotation of the word. In Cassel's English Dictionary the meaning of the word 'levy' is given, 'the act of raising or collecting for public service; that which is so raised or collected; a body of troops called out for military service; a duty, Lx, or impost'. In the Chamber's Dictionary similar meaning has been given. In the Shorter Oxford English Dictionary, 1964 Edition, the word levy has been given the meaning, 'the action of levying, an assessment, duty, tax'. The meaning includes raising of taxes, to raise a sum by legal execution or process etc. In the New Shorter Oxford Dictionary, 1993 Edition, the meaning of word 'levy' has been given as the collection of an assessment, duty or tax raising, the sum of money by legal execution or process. According to Black's Law Dictionary the word 'levy' means to assess; raise; execute; tax; collect; gather; take up; seize'. It further means to levy (assess, exact, raise, or collect) a tax. It is further defined that, 'it is obtaining of money by legal process through seizure and sale of property'. In reference to taxation it is stated that, 'word may mean the legislative function and declaration of the subject and rate or amount of taxation; or the formal order, by proper authority declaring property subject to taxation at fixed rate at its assessed valuation; or the ministerial function of assessing, listing and extending taxes; or the doing of whatever is necessary in order to authorise the collector to collect the tax.' It is further stated that when used in connection with authority to tax denotes exercise of legislative function, whether state or local, determining that a tax shall be imposed and fixing A amount, exaction. In the same dictionary the word 'assess' has been defined, 'to impose a pecuniary payment upon person or property and when used in connection with taxation of property, means to make a valuation and appraisal of property usually in connection with listing of property liable to taxation and implies the exercise of discretion on the part of officials charged with duty of assessing, including the listing or inventory of property involved, determination to extent of physical property, and placing of a value thereon. To calculate the rate and amount to taxes, to levy a charge on the owner of property for improvement thereto.' It is further stated in the Black's Law Dictionary that 'assess is some times used as synonymous with 'levy'. While defining the word 'assessment' it is stated in the Black Law Dictionary that, 'it is used in connection with assessing property taxes or levying of property taxes and also the amount assessed. With reference to taxation it is stated that, it fixes the liability of taxpayer and ascertains the facts and furnishes the data for the proper preparation of the tax rolls.' In the Legal Thesaurus William C. Burton the word 'levy' has been defined to mean 'assess a tax, charge and collect money'. It has been held by a Full Bench of the Madras High Court in the case of Commissioner, Madras v. Muthukaruppan reported as AIR 1939 Mad. 376 that the word 'assessment' is used in two senses in the Indian Income-tax Act, the process of determining the amount of profit or loss and process of levying tax.
14. On going through various cannotations of the words 'levy.' and 'assessment' as shown above we have no hesitation in holding that the word 'levy' has a wide connotation and the meaning assigned to this word is to be ascertained with reference to the context in which it is used. It includes the act of creating charge, collecting the tax as well as the process of assessment. Now when we examine the word 'levy' used in section 89 of the Ordinance we find that it is with reference to Chapter VII and Chapter XI of the Ordinance. Chapter VII deals with the assessment and Chapter XI deals with the penalties and the procedure for imposition of penalty. It would be appropriate to observe that under normal law the tax demand can be created under the Ordinance in pursuance of an assessment/order and not otherwise. It is such a cardinal principle of law of taxation that we need not dwell on it in any detail. Thus, when the word 'levy' used in section 89 is read with reference to Chapter VII which deals with assessment it leads to the only conclusion that it refers to the assessment in pursuance whereof the tax demand is created against an assessee. Now when we read the provisions contained in section 80-D we find that no tax under section 80-D can be levied or charged untill, and unless, there is an assessment order in accordance with the provisions contained in Chapter VII of the Ordinance which deals with the assessment. Section 80-D cannot become operative in isolation or by its own force without an assessment under the relevant sections contained in Chapter VII pertaining to the assessment. The assessing officer can invoke the provision contained in section 80-D after making an assessment only and not without any assessment under Chapter VII. The assessments in the case of assessee before us were made under section 62 of the Income Tax Ordinance which provides that the Deputy Commissioner shall by an order in writing, assess the total income of the assessee and determine the tax payable by him on the basis of such assessment. Under the normal provision after the assessment of total income the tax payable is to be determined with reference to the provisions contained in sections 9 and 10 of the Income Tax Ordinance which are charging provisions and are contained in Chapter III of the Ordinance at the rate or rates specified in First Schedule. However, section 80-D is contained in Chapter VII dealing with tax liability in special cases. If sections 9 and 10, 62 and 80-D are read together we find that under the normal law the tax is to be levied in respect of total income at rate or rates specified in First Schedule but in the special circumstances and eventualities specified in section 80-D if no tax is payable under the normal law or the tax payable or paid is less than one and half per cent of the amount representating its turnover from all sources the aggregate of the declared turnover shall be deemed to be income of the company and registered firm, and the tax thereon shall be charged in the manner specified in subsection (2) of section 80-D. For the sake of convenience section 80-D is reproduced below:---
"80-D. Minimum tax on income of certain companies and registered firm.---(1) Notwithstanding anything contained in this Ordinance or any other law for the time being in force, where no tax is payable or paid by a company or a registered firm resident in Pakistan or the tax payable or paid is less than one-half per cent. of the amount representing its turnover from all sources, the aggregate of the declared turnover shall be deemed to be the income of said company or a registered firm and tax thereon shall be charged in the manner specified in subsection (2).
(Explanation.---For the removal of doubt, it is declared that the expressions 'where no tax is payable or paid' and 'or the tax payable or paid' apply to all cases where tax is not payable or paid for any reason whatsoever including any loss of income, profits or gains or set off of loss of earlier years, exemption from tax, credits or rebates in tax, and allowances and deductions (including depreciation) admissible under any provision of this Ordinance or any other law for the time being in force).
(2) The company (or a registered firm) referred to in subsection (1) shall pay as income-tax---
(a) an amount, where no tax is payable (or paid) equal to one-half percent. of the said turnover; and
(b) an amount, where tax payable (or paid) is less than one-half per cent. of the said turnover, equal to the difference between the tax payable and the amount calculated in accordance with clause (a).
(Explanation.---For the removal of doubt, it is declared that 'turnover' means the gross receipts, exclusive of trade discount shown on invoices or bills, derived from sale of goods or from rendering, giving or supplying services or benefits or from execution of contract).
15. On reading of sections 9 and 10, section 62 and section 80-D we find that in normal course the tax is levied as a result of assessment under section 62 in accordance with the charging provisions contained in sections 9 and 10 at the rate or rates specified in First Schedule. In special circumstances as specified in subsection (1) of section 80-D, the minimum tax is levied in accordance with the assessment made under section 62, with the modification that for total income the deemed income is substituted which is 'turnover' as explained in section 80-D and the rate of tax is to be applied as provided in subsection (2) of section 80-D instead of specified in the First Schedule. The result is that the section 62 which is contained in Chapter VII of the Ordinance always comes into play whether the tax is charged under sections 9 and 10 in accordance with the rates specified in First Schedule on the total income or minimum tax is charged as specified in subsection (2) of section 80-D on the turnover which shall be deemed to be income of the assessee. Thus, the process of assessment and the determination of tax payable by an assessee is to be made on the basis of assessment completed under section 62 which is contained in Chapter VII of the Ordinance.
16. Consequent to above discussions we hold that in either case whether tax is charged under sections 9 and 10 or under section 80-D the process of assessment of determining of tax liability is to be made under section 62 C meaning thereby that the tax is levied under Chapter VII of the Ordinance. Mr. Sirajul Haque Memon has frankly conceded that if any tax demand is not paid which is created as a result of assessment under section 62 the additional tax can be levied. We, therefore, conclude that the failure to pay whole or any part of tax either charged under sections 9 and 10 contained in Chapter III of the Ordinance or charged under section 80-D contained in Chapter VIII of the Ordinance, shall entail the charging of additional tax under section 89 because in both the cases the tax is levied under section 62 c of the Ordinance which is contained in Chapter VII thereof. We are further persuaded to agree with the submission of learned D.R. that the learned C.I.T.(A) has confused the entire facts by making reference to section 54 of the Income Tax Ordinance, as no additional tax was levied under section 88 'or non-payment of tax under section 54 but the additional tax was levied under section 89 for non-payment of tax as a result of assessment orders under section 62
17. This brings us to the last submission of Mr. Sirajul Haque Memon that in the order under section 89 relating to the assessment year 1991-92 the additional tax has been levied at 24 % which may be reduced to 15 % as the rate of additional tax was enhanced by Finance Act, 1996 which is not retrospective in effect. Mr. Sirajul Haque Memon has pointed out that the assessing officer has himself applied rate of additional tax for the assessment year 1994-95 at 15 % . We have carefully considered the contention and have perused the orders under section 89. In the first instance the contention of Mr.. Sirajul Haque Memon appeared to be forceful but on perusal of relevant law as it stood in the assessment year 1991-92 we find that the treatment given by the assessing officer was correct and no interference is required on our part. The reason is that a proviso was inserted to section 89 by Finance Act, 1991 which was omitted by Finance Act, 1996. The proviso reads as follows:---
"Provided that, where payment of tax is deemed to have been stayed under the proviso to subsection (2) of section 85 additional tax at the rate of 24 % per annum shall be paid in respect of the tax deemed payable after giving effect of the order under section 129; and such additional tax shall be calculated from the date of payment given in the notice under subsection (1) of section 85 in respect of the order appealed against to the date of payment. "
18. A perusal of the above provio and the orders under section 89 for the assessment years 1991-92 and 1994-95 shows that in the assessment year 1994-95 no appeal appears to have been preferred by the respondent and, therefore, there was no stay under subsection (2) of section 85 of the Ordinance. However, in the assessment year 1991-92 appeal was preferred and, therefore, by virtue of the proviso to section 85(2) the payment of tax demand was stayed till the decision in appeal. The proviso to subsection (2) of section 85 was also inserted by Finance Act, 1991 and was omitted by Finance Act, 1996 which read as follows in the assessment year 1991-92:--
"Provided that, where assessee files an appeal under section 129 after the thirtieth day of June, 1991, in respect of an order relating to sum payable as specified in the notice under subsection (1), the payment of the said sum shall be deemed to have been stayed till the decision in appeal under the said section. "
19. The treatment given by the assessing officer while making order under section 89 for the assessment year 1991-92 is in consonance with the law as contained in the provisos to sections 85(2) and 89, therefore, the submission of Mr. Sirajul Haque Memon for reduction in the rate of additional tax is not acceptable.
20. For the foregoing reasons and as a result of findings given above the impugned order of learned C.I.T.(A) is hereby vacated and the orders under section 89 as made by the assessing officer for both the assessment years under appeal are hereby restored. The appeals at the instance of department are allowed accordingly.
C.M.A./14/Trib. Appeals allowed.