I.T.A. NO.3673/LB OF 1999 VS I.T.A. NO.3673/LB OF 1999, 2000 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 1447 (1999)

Income Tax Ordinance (XXXI of 1979)---

----Ss. 59(1) & 66-A---C.B.R. Circular No.5 of 1997, dated 12-7-1997, para. 3(II)(a)---C.B.R. Circular No.11 of 1997, dated 9-9-1997---Self Assessment Scheme---Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order---Assessment year 1997-98---New assessee---Condition of filing wealth statement---Assessment completed under S.59(1) of the Income Tax Ordinance, 1979 was cancelled by Inspecting Additional Commissioner under S.66-A of the Income Tax Ordinance, 1979 on the ground that no wealth statement was filed alongwith the income-tax return which was obligatory upon the new assessee in terms of para. 3(II) of C.B.R. Circular No.5 of 1997, dated 12-7-1997---Assessee contended that condition of filing statements, accounts, details and documents had been waived through C.B.R. Circular No. ll of 1997, dated 9-9-1997, therefore; assessee was not required to file wealth statement to be legible to avail the Self-Assessment Scheme---Department pleaded that this concession was only for old taxpayers---Validity---Condition of filing statements, accounts, details and documents alongwith the returns was waived off by the Central Board of Revenue through Circular No. II of 1997, dated 9-9-1997---Contention of Department that benefits of the concession were meant for the old tax-payers only and the new taxpayers were outside the pale of this concession did not find support from any provision in the Circular---Term "statements" used in C. B. R. Circular No. l l of 1997 would include the "wealth statements"---Concession given by said circular to the assessee not to file various statements, accounts, details and documents would, therefore, extend to the new tax-payers also---Return filed by the assessee was rightly accepted under S.59(l) of the Income Tax Ordinance, 1979 and there was no justification with the Inspecting Additional Commissioner to invoke the provisions of S.66-A of the Income Tax Ordinance, 1979.

Muhammad Shahid Abbas for Appellant.

Muhammad Asif, D.R. for Respondent,

Date of hearing: 8th October, 1999.

ORDER

MAHMOOD AHMAD MALIK (ACCOUNTANT MEMBER).--- This appeal has been filed by the assessee for the assessment year 1997-98 against cancellation of the statement framed under section (1) of the Income Tax Ordinance, 1979, by the learned IAC under section 66-A.

2. The brief facts of the case are that the assessee, an individual, derives income from sale of cloth on wholesale basis. It was stated by the learned IAC in the impugned order that the return was filed for the first time being a new case and the assessment for the year under appeal was completed under section 59(1) on 2-1-1998. Perusal of the record revealed that no wealth statement was filed alongwith the income tax return. It was obligatory upon the assessee to file wealth statement alongwith the return in terms of para. 3(II) of the C.B.R. Circular No. 5 of 1997, dated 12-7-1997. The learned IAC, therefore, issued a show-cause notice confronting the assessee with the cancellation of assessment under section 66-A as the same was considered erroneous as well as prejudicial to the interest of revenue on account of non-filing of wealth statement. No reply was received from the assessee and, therefore, the learned IAC cancelled the assessment framed under section 59(1) of the Income Tax Ordinance, 1979.

3. Parties have been heard. It was contended on behalf of the assessee that it is correct that wealth statement had not been filed but no notice for short documents had been issued by the Assessing Officer. The learned counsel also referred to Circular No.11 of 1997, darted 9-9-1997 wherein it was provided that persons filing returns under the simplified Self-Assessment Scheme may not file the statement, accounts details and documents (required to be. filed under S.S.A.S) alongwith the ore page return. It was further stated in the Circular that the assessee will, however, be required to file the documents and details in case they are selected for special audit through computer ballot. It was contended by the learned counsel that the condition to file wealth statement and other documents had been waived through Circular No.11 referred above and that the case had also not been selected for special audit through computer and, therefore, the assessee was not required to file wealth statement to be eligible to avail of the Simplified Self Assessment Scheme. The learned D.R. on his part stated that Circular No.5 of 1997 was the basic document of simplified Self-Assessment Scheme and it was provided in sub-para. (11)(a) of para. 3 of this circular that in case of new taxpayers additional requirement was that the new taxpayer individuals will file wealth statements as on 30th June of the relevant years. He was of the opinion that the concession for non-filing of statement, accounts, details and documents had been given for the old tax-payers only because the phrase "statements, accounts, details and documents" was a reproduction of the same phrase from sub-para. I of para. 3 of S.S.A.S which was meant for old tax-payers and it could not be extended to the new tax-payers. It was argued that since the wealth statement had not been filed the case did not qualify under the Simplified Self-Assessment Scheme.

4. We have considered the submissions made by both the parities. The contentions raised by the learned counsel carry weight. The condition of filing statements; accounts, details and documents alongwith the returns was waived off by the C.B.R. through Circular No. 11 of 1997, dated 9-9-1997. There is nothing in the circular to suggest that this waiver did not include the wealth statement. The contention of the D.R. that the benefits of the concession were meant for the old tax-payers only and the new tax-payers were outside the pale of this concession does not find support from any provision in the circular. If the C.B.R. had the intention to deprive the new tax-payers from this benefit, it could say so in clear terms. There appears to be no ambiguity on this score. If, however, there is any ambiguity or doubt, we have to follow the well-settled principle that the construction cost beneficial to the tax-payer should be adopted. Accordingly. we have (sic) that the term "statements" used in Circular No. 11 of 1997 (Income Tax), dated 9th September, 1997 would include the wealth statements". The concession given by this Circular to the assessee not to file various statements, accounts etc would, therefore, extend to the new tax-payers also who were required to file wealth statement under para. 3(11)(a) of C.B. Rs. Circular No.5 of 1997 (Income tax), dated 12th July, 1997 but had not filed the same. In the circumstances the return filed by the assessee was rightly accepted under section 59(1) and there was no justification available with the IAC to invoke the provisions of section 66-A of the Income Tax Ordinance, 1979.

5. The appeal filed by the assessee is allowed accordingly.

C. M. A. /M. A. K./11/Tax(Trib.)Appeal allowed.