I.T.A. NO.4537/1_13 OF 1999 VS I.T.A. NO.4537/LB OF 1999, 2000 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 3752 (2000)

(a) Income Tax Ordinance (XXXI of 1979)---

-----S.59(1)---C.B.R. Circular No.5 of 1995 dated 11-7-1995, para. 10(b)-- Broad Based Self-Assessment Scheme---New taxpayer---Change in nature of business and name ---Assessee who changed his business from sale of second hand motor vehicles of assorted brands to sale of new brand motor vehicles on the same premises to be treated as "New taxpayer".

(b) Income Tax Ordinance (XXXI of 1979)---

----Ss.59(1) & 129---Broad Based Self-Assessment Scheme---Appeal to the Appellate Additional Commissioner---Successor Appellate Authority-- Jurisdiction to revise predecessor's order---Not open to the successor-in -office to disturb the clear-cut finding recorded by his predecessor with regard to disqualification of assessee's return under Broad Based Self-Assessment Scheme especially when successor-in-office could not show that predecessor had wrongly cited pertinent facts or had wrongly interpretated the relevant law/applicable Circulars---Successor-in-office had no authority under the law to record a different finding on the same cited facts.

(c) Income Tax Ordinance (XXXI of 1979)---

----Ss.59(1) & 65---C.B.R. Circular No.5 of 1995, dated 11-7-1995, para. 10(b)---Self-assessment---Additional assessment ---Assessee's ease was processed under normal law due to concealed/suppressed gross commission receipts ---Assessee contended that return should have been first accepted under S.59(1) to invoke the provision of S.65 of the Income Tax Ordinance, 1979---Validity---Provision of S.65 would be applicable . in the case of an "existing assessee" in terms of C.B.R. Circular No.5 of 1995---For a "new taxpayer" it was open to the department to select a certain percentage of returns filed for normal law assessment---Assessee's case, being new taxpayer, could be taken up for normal law assessment.

(d) Income Tax Ordinance (XXXI of 1979)---

----Ss.59(l), 61, 62, 129 & 156---Self-assessment---C.B.R. Circular No.5 of 1995, .dated 11-7-1995---Assessment year 1995-96---Return was filed under .Broad Based Self-Assessment Scheme---Notices under Ss.61 & 62 of the Income Tax Ordinance, 1979 were issued to process the case under normal law before 30-6-1996 and assessment was made after 30-6-1996---Appeal of the assessee was- dismissed by the First Appellate Authority ---Assessee moved application under S.156 of the Income Tax Ordinance, 1979 before successor Appellate Authority claiming that Assessing Officer was not justified to make assessment under S.62 of the Income Tax Ordinance, as the case had already been finalized under S.59(4) of the Income Tax Ordinance,. 1979---Successor-in-office ' rectified the order accordingly ---Validity-- Findings of the predecessor-in-office had been totally ignored by the successor-in-office and without exanuning and disposing of the finding, the successor-in-office. had proceeded to "rectify" the order of his predecessor under 5.156 of the Income Tax Ordinance, 1979 which action was found to be patently illegal---Successor-in-office had proceeded to "review" the order of his predecessor, which he could not do---Finding that assessment stood finalized under S.59(4) as no order had been passed by 30-6-1996 was - wholly misconceived as the assessee had already been advised well before 30-6-1996 that his return for the year did not qualify under Broad Based Self-Assessment Scheme and notices under S.61 had been issued and served and case was discussed with the D.R.---Order of the successor-in-office was annulled by the Appellate Tribunal in circumstances.

Shahid Zaheer, D.R. for Appellant

Talat Javed, F.C.A. for Respondent.

Date- of hearing: 3rd June, 2000.

ORDER.

M. MUNIR QURESHI (ACCOUNTANT MEMBER).---Thisis an appeal by Revenue against' order of the C.I.T.(A), Multan Zone, dated 14-4-1999 in which the First Appellate Authority has rectified the order of his predecessor and has held. that the order passed by the predecessor CIT (A) was defective in so far as no adjudication had been made with regard to Ground No. 1.

Briefly stated, the facts in this case are that the assessee, an AOP, filed Return under BBSAS for 1995-96. declaring Total Income ofRs.1,04,775 on 30-8-1995. On scrutiny of the Return, the DCIT found that (a) the assessee had changed its nature of business from purchase and sale of "used" cars of assorted brands to- exclusive sale of new, Honda brand automobiles supplied by Honda Atlas Cars (Pakistan) Limited. In the computation appended with the return fled, the income declared related entirely to commission earnedfrom HACPL on sale of its- brand new vehicles and no income whatsoever had been declared from purchase and sale of used automobiles. This was seen by the DCIT as a qualitative charge in the nature of business as in the past the assessee had declared income from sale of "used" motor vehicles only. Furthermore, the status of the assessee though still that of an AOP, also recorded a change in so far as the previous AOP having three Members known by the name of New Hameed Motors, Sher Shah Road, Multan NTN 04-03-0808359 (Mr. Muhammad Akmal, Mr Anjum Hameed and Mst. Nargis Hameed) stood enlarged with the induction of new members so that the total strength of the new AOP known by the name of Honda Breeze was of six members.

Besides the above, the DCIT also found that-the gross commission receipts from HACPL declared by M/s. Honda Breeze for assessment year 1994-95 amounting to Rs.37,12,457 was not consistent with the information furnished by HACPL showing gross commission disbursed to assessee amounting to Rs.65,69,013. Prima- facie, the assessee appeared to have concealed/suppressed commission receipts from HACPL.

In view of the fact that the assessee having changed its nature of its business and furthermore; the assessee having concealed/suppressed- gross commission receipts, for HACPL, the DCIT found the assessee to be ineligible under the BBSAS for 1995-96. Statutory notices under section 61 of the Ordinance were then issued on 10-12-1995 and duly served on the assessee on 14-12-1995. In compliance, Mr. M.A. Hadi, Chartered Accountant/AR appeared before the Assessing Officer and discussed various aspects of the case. Statutory notices under section 61 were subsequently also issued on 21-12-1995 and 10-2-1996.

The assessee's A.R. challenged the selection of return filed for 1995-96 under BBSAS for normal law assessment on the ground that the said Return duly qualified for acceptance under BBSAS. The A.R. was confronted with the findings made by DCIT regarding status of the assessee and concealment/suppression of gross commission receipts. The A.R. contested DCIT's findings and denied any change in the nature of business/status of the assessee. As regards, the alleged concealment of gross commission receipts,. the A.R. explained that the assessee did not maintain any regular accounts and the alleged discrepancy in gross commission. receipts referred to by the DCIT was in fact due to cash basis recording receipts adopted by the assessee as against the accrual basis adopted by the Principal (HACPL)

The DCIT further found that besides commission earned by the assessee from HACPL on Honda vehicles, the assessee had also made independent purchases of brand new Honda motor-vehicles of some 205 cars during the period relevant to assessment year 1995-96. The assessee's earnings on such independent purchase of motor cars was also found to have been concealed. When confronted on the matter, the assessee's A.R. explained that the assessee was required by HACPL to purchase motor vehicles independently from those supplied by. HACPL for show-room display purposes and it was for this reason that the assessee had made purchases on own account of Honda Motor Vehicles besides the Honda vehicles supplies on commission basis by HACPL.

After discussion of the case with the assessee's A.R. and after examining the assessee's response on various findings confronted, the DCIT found that (a) M/s. Honda Breeze fell in the category of a "new assessee" and furthermore, that M/s. Honda Breeze had actually concealed/suppressed gross commission receipts from HACPL and the explanations given were wholly unsatisfactory. The DCIT held that for the reasons aforementioned, the assessee's case fell in the definition of "new assessee". Furthermore, on account of furnishing inaccurate particulars of its income, its return for 1995-96 fell outside the purview of BBSAS in terms of para.6 of Circular No.5 of 1995.

After recording finding as above, the DCIT proceeded to frame assessment under normal law and determined total income at Rs.49,55,162 computed as under:---

The order of assessment is dated 4-6-1998 and the DCIT has issued notice under section 116 for furnishing of inaccurate particulars of income.

On appeal before the first appellate authority, the assessee reiterated its claim for acceptance under BBSAS. The CIT (A) examined the case in depth and found that the assessee's claim under BBSAS was wholly misconceived as the DCIT had rightly come to the conclusion that the assessee's case fell in the category of "new tax-payers" as the "nature of business" of the newly constituted AOP had undergone a qualitative change and furthermore, the assessee having concealed gross commission receipts from HACPL was, therefore, disqualified for assessment under section 59(1) or 59(4). The CIT(A) noted specifically that notices under section 61 had been duly issued on 10-12-1995, 21-12-1995 and 10-2-1996 i.e. before 30^th June, 1996, and the assessee had been duly confronted with DCIT's findings regarding (a) its classification as a new taxpayer and (b) concealment of gross commission receipts from HACPL. As such confrontation had been made before 30th June, 1996 and as statutory notices under section 61 had been issued before 30th June, 1996, therefore, the CIT(A) found that the provisions of section 59(4) were not attracted and the subsequent assessment made under section. 62 dated 4th June, 1998 was consistent with statutory stipulation. The relevant portion from the order of the CIT(A) dated 12-11-1998 is reproduced hereunder for facility of reference:---

"EXCLUSION FROM SELF-ASSESSMENT SCHEME.

The counsel of the appellant, as per ground of appeal/written arguments, submitted that the return was filed under BBSAS of. 1995-96 which was deemed to be finalized on 30-6-1996 in terms of section 59(4) of the Income Tax Ordinance, 1979. The exclusion of the case on October 18, 1997 was without any legal authority. The Assessing Officer has not reopened the case, therefore, the assessment deemed to be finalized on 30-6-1996 still prevails and the subsequent assessment under section 62 has no value.

I have considered the arguments made by the counsel of the appellant on this issue and have gone through the record, which indicates that Sh. Abdul Hameed was previously doing business mainly in old vehicles on commission basis in the name of M/s_ Hameed Motors with the status of an AOP consisting of 3 members only whereas now he is dealing in new vehicles as dealer of Honda Atlas Company in the name of M/s. Honda Breeze with status of AOP consisting of 6 members with increased capital to which separate T.R. has been assigned by the Department. . Capital investment in the business has also increased. Also there is change in the nature, name and style of the business as rightly pointed out by the Assessing Officer, which is hit by para. 10, clause (b) of Circular No.5 of 1995, dated 11-7-1995 which lays down as under:---

'Where a new taxpayer takes over the business of an existing assessee, it would be a case of succession in business and the successor shall be taken to be an existing assessee, unless, the place or 'nature of business' has changed' (Emphasis mine).

Since, in this case nature, name and style of the business has changed, it is, therefore, not a case of succession of the business. Also the appellant declared the commission received at Rs.37,12,457 instead of confirmed receipt of Rs.41,32,648 and earned commission of Rs.65,69,013 and, therefore, suppressed commission during the period under consideration. Order under section 59(1) can only be passed in such cases which qualify for acceptance - in accordance with the provisions of Scheme of Self Assessment as made by the C.B.R. for that year. Since here in this case, the case did not qualify for processing under Self-Assessment Scheme, the same was rightly excluded from the purview of Self Assessment\ Scheme and the action of the officer for initiation of normal proceeding by issuance of notices under section 61, dated 10-12-1995, 21--12-1995, 10-2-1996 before 30-6-1996 constituted intimation to the appellant that its case has bean excluded from the purview of Self-Assessment Scheme. Viewpoint of the counsel of the appellant that since the order under section 59(1) was- passed before 30-6-1996, the assessment may be deemed to be finalized under section 59(4) is not correct in view of the facts of the case and the provisions of the section which clearly indicate that the benefits of Self-Assessment Scheme as envisaged under section 59(1) or 59(4) as claimed by the appellant are not available to him as discussed above -as it is not case of a succession in business and also concealment of income exists which makes. the case ineligible for processing under section 59(1), therefore, action of the officer regarding exclusion of the case from the purview of Self-Assessment Scheme since based on facts of the case and as per law it is, therefore, upheld."

(S.I.C.)

Consequent to adjudication made by the CIT(A), the assessee approached the successor CIT(A), Multan Zone, and filed application for rectification under section 156 on the ground that the predecessor CIT(A) had failed to adjudicate assessee's first ground of appeal viz. that the DCIT was not justified to make assessment of the case under section 62 claiming the case had already been finalized under section 59(4) (i.e.' deemed to be assessed under BBSAS) of the Income Tax Ordinance, 1979.

The successor CIT(A) then recapitulated the sequence of events leading to finalization of assessment under section 62 on 4-6-1998 and came to the conclusion that, the predecessor CIT(A) had erred in upholding assessment made under section 62 as no order of assessment having been passed till 30th June, 1996, assessee's return filed under BBSAS for 1995-96. was deemed to have been finalized under section 59(4) on 30th June, 1996. That being so, it was held that such Return deemed to have been assessed under section 59(4) on 30th June, 1996, could not subsequently be reassessed under section 62 on 4th June, 1998 and the predecessor CIT(A) had wrongly confirmed the DCIT's order of assessment under section 62 when the DCIT had no jurisdiction in law to proceed under section 62 after 30th June, 1996. The successor CIT(A) then made elaborate analysis of the business affairs of M/s. Honda Breeze for 1995-96 and came to the conclusion that the DCIT was misconceived in his view that the assessee (a) fell in the category of new taxpayer and (b) had concealed gross commission receipts from HACPL. The successor CIT (A) concluded that assessee's return stood assessed under section 59(4) on 30th June, 1996 as the DCIT had failed to pass any order of assessment by that date and subsequent assessment made under section 62 was without jurisdiction and hence a nullity, in the eye of law. The successor CIT(A) concluded his order of rectification under section 156 in the following words:---

"It is, therefore, revealed that this issue going into the root of the case was not examined by my predece9sor and he was not justified to ignore that the assessment for the assessment year 1995-96 was completed under section 59(4).-The-issue on which the case is being reviewing is floating on record and no further investigation was required so far as the matter of section 59(4) is concerned. As a result of this rectification, it is held that the DCIT, Circle 03, Multan had no jurisdiction to make assessment of the case under section 62. "

Before the Tribunal, the Department has taken the view that the successor CIT(A) was not justified to rectify order of his predecessor dated 12-11-1998 and was also not justified to hold that the assessment for the It is also pointed make assessment

In the case presently before us, the matter requiring resolution is whether the order of the CIT(A), Multan Zone, dated 12-11-1998 is rightly subject to action under section 156.

According to the successor CIT(A), his predecessor CIT(A) fell in error when he statedly failed to adjudicate Ground No.l preferred by the assessee before him and this alleged lapse on the part of the predecessor CIT(A) entitled successor CIT(A) to invoke the provisions of section 156.

Our examination of the relevant record shows that the CIT(A), Multan Zone, in his order, dated 12-11-1998 did adjudicate Ground No. l of the Ground of Appeal fled before him on pages 4 and 5 of his order, dated 12-11-1998 extract from which has been reproduced above. The adjudication of Ground No. l by the predecessor CIT(A) is unambiguous and unequivocal.

The successor CIT(A). in his otherwise elaborate recapitulation of events leading to assessment under section 62 on 4-6-1998 by the DCIT, has failed to make any mention of the fact that the DCIT. issued notices under section 61 of the Ordinance on 10-12-1995, 21-12-1995 and 10-2-1996 and that these notices were properly served and further that assessee's (then) A.R. duly appeared before the Assessing' Officer and discussed various aspects of the case and was duly confronted with the DCIT's finding regarding assessee's classification as "new taxpayer" and concealment of gross commission receipts from HACPL. This failure on the part of the successor CIT(A) to make any reference to the statutory notices issued under section 61 by the DCIT before 30th June, 1996 has a vital bearing on the legality of the assessment made under section 62 on 4-6-1998. As it is patent from the relevant record that statutory notices under section 61 were indeed issued and properly served before 30th June, 1996, the question -that now remains to be answered is whether return filed under BBSAS, could be selected for total audit as a return filed by a new taxpayer.

In Circular No. 5 of 1995 (Income-tax), dated 11th July, 1995.

SUBJECT: BROAD BASED "SELF-ASSESSMENT SCHEME" OF

INCOME-TAX FOR ASSESSMENT YEAR 1995-96.

Paragraph 10 thereof states:---

"For the purposes of this Broad-Based Self-Assessment Scheme for the assessment year 1995-96.

(a) Where a new taxpayer derives income from a business, it shall be presumed that his business capital at the end of the income .year was not more than three times the business income declared and the sources of his business capital shall not be investigated to that extent.

EXPLANATION:

"New Taxpayer" means a person who has never filed a return under the Income Tax Ordinance, 1979, in the past and/or no assessment has ever been made in the case. .

(b) Where a new taxpayer takes over the business of an existing assessee, it would be a case of succession in business and the successor shall be taken to be an existing assessee, unless the place "or" nature of business has chanced. (Emphasis mine).

As there is no doubt whatsoever that M/s. Honda Breeze derives commission income on sale of new 'Honda' brand motor vehicles supplied by HACPL whereas the previous business at the same premises, was under the name and style of M/s. New Hameed Motors deriving income from sale of 'second-hand' motor vehicles of 'assorted brands', therefore, in terms of paragraph 10(b), the assessee i.e. M/s. Honda Breeze, falls in the category of "new taxpayer". '

In paragraph 7 of the BBSAS for 1995-96, it is stipulated:---

"From amongst the returns filed by 'new taxpayer' under the Scheme, a certain percentage of returns may be audited. "

It is thus clear that from among the returns filed by new taxpayers for 1995-96 under BBSAS, a certain percentage of returns could be taken-up for normal law assessment.

As in the present case, M/s. Honda Breeze is a new taxpayer as defined in para. 10(b) of Circular No-.5 of 1995, therefore, there was no bar on the selection of its return for normal law assessment.

The CIT(A), Multan Zone, vide order, dated 12-11-1998 has precisely- addressed the issues raised in Ground No. l . of Grounds of Appeal filed before him and as clarified above, the finding of the predecessor CIT(A) is clear and unambiguous. Very pertinently, the marshalling of facts by the predecessor CIT(A) is a correct and consistent with the relevant assessment record., As against this, the marshalling of facts by the successor CIT(A) is selective and this is established beyond doubt by the fact that the successor CIT(A) has failed to make any mention whatsoever of the fact that the DCIT issued notices under section 61 of the Ordinance for assessment year 1995-96 before 30th June, 1996 and in doing. so, duly advised assessee of the reasons why return filed under BBSAS for 1995-96 had not been accepted under self-assessment provisions. This omission on the part of the successor CIT(A) distorts the factual position and appears to be deliberately contrived to justify recourse, to the provisions of section 156 by the successor CIT(A).

The other important aspect here is whether a finding recorded by the predecessor CIT(A) can be disturbed by the successor CIT(A) merely on the basis of "a change of opinion" with regard to statutory interpretation. In the present case, the successor CIT(A) has interpretated the BBSAS for 1995-96 as per his own perception of the meaning attached to the language embodied in Circular No.5 of 1995. The predecessor CIT(A) had already interpretated Circular No.5 of 1995 and had explained that the assessee M/s. Honda Breeze fall in the category of "new taxpayers". Furthermore, the predecessor CIT(A) had also interpretated the position obtaining regarding gross commission receipts earned by Honda Breeze from HACPL in the period relevant to assessment year 1995-96 and had found that M/s. Honda Breeze had concealed/suppressed gross commission receipts. Prima facie, the interpretation as made by the predecessor CIT(A) cannot be said to be in straightforward and obvious conflict with the relevant provisions of the Income Tax Ordinance, 1979 including the BBSAS announced through Circular No.5 of 1995. That being so, it was not open to the successor CIT(A) to disturb the clear-cut finding recorded by his predecessor with regard to disqualification of assessee's return under BBSAS especially when the successor CIT(A) could not show that his predecessor had wrongly cited pertinent facts or had wrongly interpretated the relevant law/applicable circulars.

It. is pertinent to note that the assessee's A.R. who argued the appeal before the successor CIT(A) is different from the A.R. who appeared before the DCIT during the course of assessment proceedings initiated by the DCIT well before 30th June, 1996. The successor A.R. of the assessee appears to be oblivious of the participation of his predecessor A.R. before the DCIT and this too must have a bearing on the legality of the proceedings under section 156. The successor CIT(A) has obviously attached no significance to the change in A.R. when the order of the DCIT makes it abundantly clear that the then A.R. did appear before him in compliance to notices issued under section 61. The following extracts from page 4 of the order of assessment of DCIT dated 4-6-1998 is illustrative:---

"Normal assessment proceedings were initiated by issuing statutory notices under section 61 of - the Income. Tax Ordinance, 1979 on 10-12-1995 which was duly served upon the assessee on 14-12-1995.. In response thereto Mr. M.A. Hadi, Chartered Accountant/A.R, of M/s. Hadi & Co. has been attending the proceedings from time to time without any books of accounts on the plea that none were maintained. Other relevant documentary details/explanations, wherever necessary were obtained, scrutinized and placed on- file. Case was discussed with attending representative of the assessee in detail.

"During the course of assessment proceedings, the assessee's A.R. challenged initiation of proceedings under normal law and contended that the case qualifies to be processed under Broad Based Self-Assessment Scheme. The contention of the assessee was duly considered in the context of facts and circumstances of the case. The same was found to be devoid of any merit. The A.R. failed to rebut the definite information in possession of this office with regard to suppression of commission receipts. He also could not furnish any plausible explanation with regard to change in nature of business and constitution of AOP. The A.R.'s contention being illogical is, therefore, rejected. Assessment proceedings have justifiably been taken up under normal law."

During the course of arguments made before the Tribunal, assessee's A.R. pointed out that the DCIT should have first accepted assessee's return under section 59(1) and thereafter if he was of the opinion that the assessee was guilty of concealment of income, invoked the provisions of section 65 of the Ordinance.,

We have looked into this aspect of the matter and we find that the provisions of section 65 would be applicable in the case of an "existing assessee" in terms of Circular No.5 of 1995. In the case of a "new taxpayer", it is open to the Department to select a certain percentage of returns filed for normal law assessment. In the present case, it has been shown that the assessee M/s. Honda Breeze falls in the category of "new taxpayer" and, I there a its return could be taken up for normal law assessment.

The First appellate Authority (successor CIT(A)) has made much of the alleged fact that the assessee's case had allegedly and therefore, statedly stood finalized under section 59(4) on 30th June, 1996 been found eligible for BBSAS before the 30th June, 1996. The CIT(A)'s observations in this regard appearing on page 3 of the appellate order, dated 14-4-1999 (para.2) are quite unequivocal.

As is abundantly clear from the discussion in the above paras, statutory notices under section 61 of the Income Tax Ordinance were issued to the assessee on 10-12-1995, 21-12-1995 and 10-2-1996 and the assessee's then A.R. Mr. Hadi, F.C.A., did appear in compliance before the Assessing Officer and was duly confronted with the department's finding regarding ineligibility of assessee's case under BBSAS for 1995-96. However, as pointed out above, the first appellate authority has chosen to omit all references to .the issuance of statutory notices under section 61 on three different occasions stated above before 30-6-1996. Under these circumstances the successor CIT(A)'s finding that the assessee's case was not found ineligible for BBSAS before 30-6-1996 is a clear misstatement. By selectively marshalling facts as is obvious from the deliberated omission of any reference to issuance of statutory notices under section 61, the CIT(A) has not dealt with the matter under appeal before him in a fair and equitable manner. Rather, a pronounced bias, in favour of the assessee and against Revenue is obvious.

As already pointed out in above paras. the predecessor CIT(A) in his order, dated 12-11-1998 page 5, para. l, thereof, has categorically stated that "initiation" of normal law proceedings by issuance of notices under section 61, dated 10-12-1995, 21-12-1995 and 10-2-1996 before 30-6-1996 constituted intimation to the appellant that its case had been excluded from the purview of Self-Assessment Scheme.

The above unequivocal finding of the predecessor CIT(A) has been totally ignored by the successor CIT(A) and without in any manner examining and disposing of the said finding, the successor CIT(A) has proceeded to "rectify" under section 156 order of his predecessor which action is found to be patently illegal In actual fact, the successor CIT(A) has proceeded to "review" the order of his predecessor, which he- cannot do. Proceedings admittedly initiated by the DCIT under section 61 on 10-12-1995, 21-12-1995 and 10-2-1996 have been brought to a conclusion on 4-6-1998 on which date the assessment for 1995-96 has been finalized under section 62. There is nothing in the law that requires the DCIT to conclude proceedings initiated under section 61 in the case of return filed under BBSAS (when such return is considered eligible under BBSAS) by 30-6-1996. The essential requirement here is that proceedings under section 61 be initiated before 30-6-1996 when return filed under BBSAS is not considered eligible. This requirement has been duly met as statutory notices on three different occasions had admittedly been issued under section 61 before 30-6-1996 and had also been complied with by the assessee's then A.R. The ambient circumstances also go to show that the department has never changed its stance ~regarding ineligibility of assessee's. return under BBS';S of 1995-96. This is evident from: the fact that the department continued to requisition information having .a bearing on the computation of assessee's total income from various sources including H.A.C.P.L. The DCIT's correspondence with the assessee on various pertinent aspects is also indicative of the fact that proceedings initiated under section 61 were alive and matters involved were under active consideration and in the knowledge of all concerned parties. Under these circumstances, there is no justification whatsoever to hold that assessment proceedings initiated under section 61 had been aborted before 30-6-1996. It is correct that the Assessing Officer after initiating proceedings under section 61 of the Income Tax Ordinance for 1995-96 assessment year, suddenly on 25-2-1996 sent assessee's return for 1995-96 to D.P.U. This sudden move by the Assessing Officer (when, proceedings already initiated under section 61 were underway and had not been brought to a -conclusion) is clearly patently illegal. If the Assessing Officer had come to the conclusion that the assessee's return for 1995-96 duly qualified under BBSAS, then he should have recorded firm findings to that effect on the order-sheet and thereafter sent assessee's return to D.P.U. In any case, assessee's return for 1995-96 was never actually processed by D.P. U. and was rather-retrieved and the Normal Law proceedings. initiated in this case w.e.f. 9-12-1995 were brought to a conclusion and order passed under section 62 on 4-6-1998. Under these circumstances when the Assessing Officer illegally dispatched the assessee's return to D.P.U., when proceedings under section 61 had not been brought to a conclusion, cannot be made a basis for holding that the return for 1995-96 duly qualified under BBSAS. Simultaneously, the CIT(A)'s finding that assessment stood finalized under section 59(4) as no order had been passed by 30-6-1996 is wholly misconceived as the assessee had already been advised well before 30-6-1996 that his return for the year did not qualify under BBSAS and notices under section 61 had been issued and served and case discussed with the then A.R.

For the reasons given above, we hold that the successor CIT(A) was not competent to act on the order of his predecessor-in-office in the manner that he has done. The successor CIT(A) has marshalled facts selectively by omitting all reference to notices issued under section 61 before 30-6-1996 and discussion with the assessee's then A.R. on the question of ineligibility of assessee's return under BBSAS and furthermore, the successor CIT(A) has virtually re-interpretated statutory provisions, including BBSAS provisions for 1995-96, after a firm finding on the issues had been duly recorded by his predecessor-in-office. The successor CIT(A) had no authority under the law to record a different finding on the same cited facts and in fact the successor CIT(A) has not even marshalled facts properly but rather has distorted the factual position by omitting all references to action under section- 61 before 30-6-1996 and subsequent interaction between the department and the assessee on various pertinent aspects as well as the fact the department had continued to requisition information having a bearing on the computation of assessee's total income, before as well as after 30-6-1996.

Resultantly, we annul the order of the CIT(A) dated 14-4-1999 and restore the order of the predecessor CIT(A) dated 12-11-1998.

The departmental appeal succeeds.

C,M.A./42/Tax(Trib.)Order accordingly.