I.T.A. NO.1851/LB OF 1999 VS I.T.A. NO.1851/LB OF 1999
2001 P T D (Trib.) 1440
[Income-tax Appellate Tribunal Pakistan]
Before Rasheed Ahmad Sheikh, Judicial Member and Mrs. Safia Chaudhry, Accountant Member
I.T.A. No. 1851/LB of 1999, decided on 25/03/2000.
(a) Income Tax Ordinance (XXXI of 1979)---
----S.59(1)---Self-assessment---Workers' Welfare Fund---Short payment of workers' welfare fund was not the condition precedent for acceptance of the return -under Self-Assessment Scheme.
(b) Income. Tax Ordinance (XXXI of 1979)---
----S.59(1)---Self-assessment---Workers' Welfare Fund---Merger of Workers' Welfare Fund in tax--Workers' Welfare Fund does not merge anywhere for the purpose of, availing benefits of the Self-Assessment Scheme unless specifically so provided therein.
(c) Income Tax Ordinance (XXXI of 1979)---
----Ss.66-A & 59(1)---C.B.R. Circular No.4 of 1996, dated 1-7-1996-- C.B.R: Letter C.N.7(4), S. Asstt. 95---Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order ---Self-assessment-- Workers' Welfare Fund---Assessment completed under Self-Assessment Scheme was cancelled by the Inspecting Additional Commissioner on the ground that tax paid was calculated by including Workers Welfare Fund, and thus, was short and return was erroneously accepted under Self Assessment Scheme---Validity---Workers' Welfare Fund was not a levy to be charged under the Income Tax Ordinance, 1979 and was an allowable expenditure of the assessee---Comparison of tax, had to be made with the tax payable on the basis of last declared/assessed income---Workers' Welfare Fund was not to be merged anywhere for availing benefits of Self Assessment Scheme---Order of Inspecting Additional Commissioner was vacated and that of Assessing Officer under -S.59(1) of the Income Tax Ordinance, 1979 was restored by the Appellate Tribunal.
I.T.A. No.2316/LB of 1998 ref.
Ch. Abdul Ghafoor, I.T.P. and Imran Rasheed for Appellant
Shahid Zaheer, D.R. for Respondent
Date of hearing: 25th March, 2000
ORDER
RASHEED AHMAD SHEIKH (JUDICIAL MEMBER).---This appeal has been filed at the behest of individual to call in question the order of learned I.A.C. Range-II, Faisalabad dated 30-9-1999 whereby he has cancelled the already completed assessment by invoking section 66A of tile Ordinance for fresh assessment.
2. The facts in brief are that the original assessment in this case has been finalized under section 59(1) of the Ordinance at an income of Rs.1,30,606. The revising authority on examination of record noted that in order to qualify the return under the S.A.S., the assessee had to pay Income tax amounting to Rs.15,900 whereas that was paid at Rs.15,862. It was thus concluded by the I.A.C. that since the assessee had paid less tax by an amount of Rs.38 the return was erroneously accepted under section 59(1). Accordingly a show-cause notice was issued and after rejecting the assessee's reply to be unsatisfactory the revising authority cancelled the assessment in terms of section 66-A of the Income Tax. Ordinance, 1979 and directed the Assessing Officer to make fresh assessment on merits.
3. The learned counsel for the assessee contended that the return was fully qualified for S.A.S. and has rightly been accepted as such. He pointed out that so far as is concerned that the tax was not short as alleged by the I.A.C. Rather the W.W.F. was mistakenly worked out at Rs.2,528 instead of Rs.2,178 as was calculated by the I.A.C. He contended that payment of W.W.F. alongwith the return was not a condition precedent for acceptance of the return under the S.A.S. Support .in this connection has been sought from C.B.R. Letter C.N.7(4), S.Asstt.95 whereby a clarification has been made as under:
"Subject: Non-payment of Workers' Welfare Fund with returns under Self-Assessment Scheme for Assessment Year 1994-95-- Request for clarification.
The undersigned is directed to clarify that mere non-payment of W.W.F. would not render a case ineligible under the Self Assessment Scheme."
He mentioned that in view of this Circular the assessee's return was fully qualified to be accepted under the S.A.S. and as such did not hit by the provisions of section 66-A of the Income Tax Ordinance, 1979.
4. The learned counsel for the assessee further submitted that the difference pointed out by the I.A.C. in payment of W.W.F. is so negligible which can be ignored -in the circumstances of the case. A copy of the Tribunal's order bearing I.T.A. No.2316/LB of 1998, dated 14-11-1998 has been produced for our consider to support his contention. In this judgment, it was finally concluded by the Tribunal as under:---
"The other reason as rightly pointed out by the assessee with regard to alleged under statement of electricity expenses was also impertinent. The amount was so negligible that it would readily be accepted as a calculation mistake. The difference of Rs.10 only was not per se sufficient to deprive the assessee of a benefit available to it under the Scheme."
5. The learned D.R. on the other hand supported the impugned order for the reasons stated therein.
6. We have heard the, parties and examined the relevant record. To contend that the assessee had made full payment of tax on his returned income, the learned A.R. with the help of a chart explained factual position of the case as under:---
| Calculation made byCalculation made by the departmentthe assessee. Business income1,28,9101,28,910 Less W.W.F.2,578 2,528 Balance income1,26,3321,26,382 Property income4,224 4,224 Total income1,30,5561,30,606 I. T. S. C. W. W. F.I.T.S. C.W. W. F. Tax paid inclusive12,1111,2112,57812,1221,2122,528 of tax deducted12,1221,2122,52812,1221,2122,528 under section 50(7E)+ 11+ 1-50-- - |
7. Careful perusal of the chart reveals that in fact W.W.F. was paid less by Rs.38 and not the tax by the assessee alongwith the Income-tax return. We have observed that short payment of W. W. F. is not the condition precedent for acceptance of return under the S.A. S. It is pertinent to mention that W.W.F. is not a levy to be charged under the Income Tax Ordinance rather this fund is charged under section 4 of the W. W. F. Ordinance on the total assessed income and thereafter the amount so paid as W.W.F. is deducted therefrom the work out total taxable income of the assessee. So, this is an allowable expenditure of the assessee provided his income falls within the parameter of the said section 4 of the W.W.F., Ordinance. On going through sub-clause (b) of the clause (2) of C.B.R. Circular No.4 of 1996, dated 1-7-1996 relating to 1A.S., it is abundantly clear that comparison of tax paid on the basis of income declared for the year under appeal is to be made with the tax payable on the basis of last declared income or the last assessed income whichever is higher. Thus, payment of W.W.F. does not merge anywhere for the purpose of availing benefits of the Scheme of Self-Assessment unless specifically so provided. therein. It is, therefore, held that the assessee's return did not hit by any disqualification laid down in the Scheme and has rightly been accepted as such by the Assessing Officer. As the order made by the Assessing Officer was neither erroneous nor prejudicial to the interest of revenue the I.A.C. was not justified to cancel the same by invoking the provisions of section 66-A of the Ordinance Consequently, the order of the I.A.C. dated 30-9-1999 is vacated and that of the Assessing Officer made under section 59(1) is restored.
7. As a result of the above discussion, the appeal is accepted.
C.M.A./M.A.K./63/Tax(Trib.) Appeal accepted.