MISCELLANEOUS APPLICATION/(RECT) NO.221/KB OF 2000-2001 IN RE: I.T.A. NO',534/KB OF 1999-2000 VS MISCELLANEOUS APPLICATION/(RECT) NO.221/KB OF 2000-2001 IN RE: I.T.A. NO',534/KB OF 1999-2000
2001 P T D (Trib.) 2069
[Income-tax Appellate Tribunal Pakistan]
Before Inam Ellahi Sheikh, Chairman,
Miscellaneous Application/(RECT) No.221/KB of 2000-2001 in re: I.T.A. No.534/KB of 1999-2000, decided on 20/03/2001.
(a) Income Tax Ordinance (XXXI of 1979)-----
-----S.156---Rectification of mistake---Scope---New facts---Application for rectification of Tribunal's order based on new facts---Validity---In the absence of satisfactory explanation, admission of such facts which were not produced at the time of hearing of appeal, would lead to the revision of order, which is not permissible.
(b) Income Tax Ordinance (XXXI of 1979)---
----S.156---Rectification of mistake---Scope---Three assessment orders in respect of one assessee for the same year were passed under Ss.59(1) & 62 of the Income Tax Ordinance, 1979---Genuineness of the order under S.59(1) was neither challenged in first appeal nor before the Appellate Tribunal by the Department but the same was challenged, later on, in a rectification application on the ground that the order under S.59(1) was neither signed by the Assessing Officer nor its genuineness had been owned by the. D.P.C. and the same was fabricated print-out---Validity---Language of the grounds of appeal before the Tribunal showed that the department did not specifically challenge the genuineness of the order which had now been challenged at the time of hearing of rectification application---Department had not been able to establish a case of mistake apparent from record in circumstances.
PLD 1996 Kar. 68 and 1998 PTD 3478 ref.
Amjad Jamshaid, I.A.C. and Vishno Raja Qavi, D.R. for Applicant.
Muhammad Ishratullah for Respondent.
Date of hearing: 16th January, 2001.
ORDER
This miscellaneous application has been filed under section 156 of the Income Tax Ordinance, 1979 (hereinfater called the Ordinance) by the ACIT, Circle-02, Zone-B, Karachi praying for the rectification of the Tribunal's order, dated 14-9-2000 recorded in I.T.A. No. 534/KB of 1999-2000 for passing a fresh order and to expunge adverse remarks passed against the departmental officials in the same order.
2. The relevant facts of this case have been stated in the order of the Tribunal, dated 14-9-2000 which reads as follows:---
The relevant facts are that the respondent filed return under the self-assessment scheme. The facts admitted on record are that no order was made by the Assessing Officer till 30-6-1997, the date on which the period of limitation provided in self-assessment scheme expired. The result was that the assessment was deemed in law, in terms of Para. 4(b) of Circular No. 16 of 1996. However, according to the assessment order under section 62 a notice was issued under section 61 on 14-7-1997 and 15-8-1998 for the reason that the return did not qualify for self-assessment scheme. It is not stated as to what was the deficiency causing disqualification for acceptance under self-assessment scheme. In the meanwhile an order under section 59(I) was trade on 10-8-1997 which shows D.C.R. No. 00567. The declared income of Rs. 62,000 was accepted and the demand notice showing nil demand was issued. Subsequently the assessee received a demand notice and IT-30, dated 24-6-1999 showing completion of assessment under section 62 and the assessed income at Rs. 1,50,973. The D.C.R. number was 111/136. The respondent preferred first appeal and the learned CIT(A) cancelled the assessment order under section 62 for the reason that assessment was completed under section 59(1) on 10-8-1997.
3. My predecessor, the then Chairman of the Tribunal, sitting singly, dismissed the departmental appeal and also recommended action against certain departmental officials in paragraph 6 of the same order. The departmental appeal was dismissed with the following observations:---
In view of the admitted position that no order was made by the Assessing Officer till 30th of June, 1997, the first deemed assessment order came into existence on 30th of June, 1997. The second assessment order was made under section 59(1) on 10-8-1997. The third assessment order was made under section 62 on 24-6-1999 which is the subject-matter of appeal. Three assessment orders in respect of one assessee for the same year cannot be envisaged in law and therefore the impugned finding of learned CIT(A) is not open to any exception. The appeal at the instance of department stands dismissed.
4. Now the Assessing Officer has filed this miscellaneous application stating that the order under section 59(1) of the Ordinance, dated 10-8-1997 was neither signed by the Assessing Officer nor its generation has been owned by the D.P. C., Karachi. Thus, it is claimed that, such an order is not valid in the eye of the law. Another plea of the department in this application is that the Tribunal as well as first appellate authority failed to appreciate that the return filed by the assessee was normal law return and not a self -assessment return as the return did not qualify for acceptance under Broad Based Self-Assessment Scheme (B.B.S.A.S.) since the tax paid in the year under consideration was less than the tax paid in the immediately-preceding year. The department has also referred in the application to some order sheet entry dated 30-9-1996 in the following manner:---
"Return of income has been filed showing net income of Rs. 62,000 and tax paid at ks. 2,200 is less than the assessment year 1995-96. Return placed on record."
5. It is further stated in the application that the normal assessment proceedings were initiated and the A.R. of the assessee did not raise any objection at the time of hearings under sections 61 and 62 with regard to the duplicity of assessment proceedings. The passing of adverse remarks has also been challenged on the principle of audi altern paltrem.
6. The learned D.R. has submitted at the time of hearing of the present application that the return of the assessee did not qualify for acceptance under B.B.S.A.S: as the assessee has shown an income of Rs. 62,000 with tax payable at Rs. 2,200 in the year under consideration whereas in the immediately preceding year the assessment had been made at an income of Rs. 92,000 with tax payable at Rs. 5,500 under section 59(1) of the Ordinance. Thus, according to the learned D.R. the return of the assessee in the year under consideration was not qualified for acceptance under B.B.S.A.S. in terms of para. 2(b) of the Scheme. The-plea of the learned D.R. is that the orders of the first appellate authority as well as Tribunal were void as these were not based on sound foundation. The learned D.R. further submitted that this was a mistake of law which was rectifiable. Reliance has been placed on a decision of Hon'ble Lahore High Court reported as PLD 1996 Kar. 68 and another case reported as 1998 PTD 3478. The learned D.R. further submitted that there was no such order, dated 10-8-1997 allegedly recorded under section 59(1) of the Ordinance on the record of the department and that the system analyst had also denied having issued any such order/computer print out. The learned D.R. also referred to the clarification contained in Circular No. 16 of 1996 to substantiate the plea that the assessee's return did not qualify for acceptance under self-assessment scheme and thus, the plea of the learned D.R. was that the order could not have been deemed to have been passed under section 59(4) of the Ordinance.
7. The Inspecting Additional Commissioner (IAC), who also appeared alongwith the learned D.R. submitted that the D.C.R. entry mentioned in the impugned order was in fact dated 29-12-1997 and related to some other assessee. The learned IAC raised an allegation that the IT-30, dated 10-8 1996 under section 59(1) of the Ordinance was fabricated print out and it was not issued by the department. The learned IAC also emphasised that the case did not qualify for acceptance under self-assessment scheme and thus, according to him this was mistake apparent on record which could be rectified.
8. The learned counsel of the assessee conceded that the return did not qualify for acceptance under self-assessment scheme. However, he says that he had received the IT-30 as mentioned in the impugned order passed under section 59(1) of the Ordinance. The learned counsel of the assessee also submitted that he did not receive the order issued under section 62 of the Ordinance initially and that he had made a request to the Assessing Officer for supply a copy of such order recorded under section 62 of the Ordinance. The learned counsel of the assessee defended the impugned order with the submission that an order under section 62 of the Ordinance could not be passed in the presence of the order already passed under section 59(1) of the Ordinance unless the order under section 59(l) of the Ordinance was undone by way of cancellation etc. Thus, according to the learned counsel of the assessed the order under section 62 of the Ordinance is duplicate order which could not be maintained. The learned counsel of the assessee further submitted that the department was already aware of the existence of IT-30 issued under section 59(l) of the Ordinance at the time of hearing of the first appeal as a copy of the grounds of appeal was duly served upon the Assessing Officer. According to the learned counsel of the assessed, if such order was not a genuine one, the department could have produced necessary evidence at the first appellate stage. Thus, according to the learned counsel of the assessee this is an afterthought.
9. The fact's of the case and the arguments of both the parties have been summarised above. It must be mentioned here that this is a miscellaneous application under section 156 of the Ordinance and the scope is limited due to a mistake apparent on record. Before considering the arguments of both the parties, it will be useful to reproduce the operating part of the order of the learned CIT(A) and the ground taken by the department before the Tribunal in the following manner:---
Apart from being a duplicate assessment, this assessment has no legs to stand for the following reasons:---
Though the IT-30 indicates that the assessment has been completed under section 62 there is no valid service of notice under section 61, upon assessee.
The columns for date of assessment and DCR No. have been left blank in the IT-30.
Order of assessment has not been made available to appellant as yet, though the application for providing a copy of order was filed by assessee on 30-12-1999, which is constantly being followed up.
In view thereof, the duplicate assessment completed in the appellant's case, determining income at Rs. 150,793 is cancelled, for the charge year 1996-97 . "
GROUND OF APPEAL BEFORE TRIBUNAL
That the learned CIT(A), Zone-VI, Karachi is not justified in cancelling the order, considering it to be a duplicate assessment. The learned CIT(A) in cancelling the order acted harshly as the same may need not to be cancelled.
10. Although the learned counsel of the assessee has conceded before us that his return did not qualify for acceptance under the scheme, still the question remains whether there is a mistake apparent from record in the order of Tribunal which could be rectified presently. The departmental officials have now disowned the IT-30 on the basis of which the assessment order under section 62 of the Ordinance was held to be a duplicate order. The assessee had taken the following specific ground before the learned CIT(A), and it is not the case of the department that the copy of such ground was not provided:--- .
"That the learned Assistant Commissioner of Income-tax erred in completing another assessment on a later date for the assessment year 1996-97 when the Income-tax Assessment for the said assessment year had already been completed by his predecessor on 10-8-1997 vide DCR No. 005/67."
11. It is also not the case of the department before me now, or in the earlier proceedings, that proper opportunity was not afforded to the department before the decision of the appeal. In any case if the department had not been heard before the decision of such appeal then the appropriate remedy available with the department was to approach the first appellate authority for the provision of such opportunity. Thus, this ground of the assessee as reproduced in para. 10 above before the learned CIT(A) was not displaced by the department. A perusal of the Tribunal's order also does not indicate any plea that such order had not been issued by the Assessing Officer. It is also not the plea of the department that the Tribunal had not provided the department an opportunity to produce the assessment record or necessary evidence by way of personal hearing etc. There was no answer to the question as to whether such facts or evidence were produced at the time of hearing of appeal before the Tribunal, and if not, the reason for not doing so. In the absence of a satisfactory explanation admission of any suck evidence as this stage would lead to the revision of the order, which is no permissible.
12. Although the learned counsel of the assessee has frankly conceded that the assessee's return did not qualify for acceptance under B.B.S.A.S., this was not the issue before the learned CIT(A) or before the Tribunal. The plea taken by the department in the present application was not raised during the proceedings of the appeal. In any case the real issue before the learned CIT(A) as well as the Tribunal was whether the impugned order passed under section 62 of the Ordinance could be maintained. As noted in para.9 above, the learned CIT(A) cancelled the order not only because this was duplicate assessment, but also three other reasons were given for cancelling the assessment under section 62 of the Ordinance. The Tribunal has maintained the order of the learned CIT(A) for-the reason that three assessment orders in respect of one assessee for the same year could not be envisaged in law. The three reasons given by the learned CIT(A) as already, mentioned above were never disputed by the department either at the time of hearing of the appeal or at the time of hearing of the present application. The language of the grounds of appeal before the Tribunal, as also given in para.9 above, shows that the department envisaged a milder treatment such as the setting aside of the assessment and the ground does not specifically challenge the genuineness of the order, dated 1a-8-1997 which has now been challenged at the time of hearing of the application. Thus, in my view the department has not been able to establish a case of mistake apparent from record on the issue of cancellation of the assessment.
13. On the issue of the recommendation of my predecessor against the departmental officials, it is noted that only the IAC has taken the trouble to appear at the time of hearing of the application and he too has not explained as to how he recommended the filing of the appeal before the Tribunal. The main grievance shown by the department in the application is that they have been condemned unheard. However, they have not availed of this opportunity to appear before the Bench and explain the reason for their actions. Nevertheless, I am inclined to add the following sentence to the direction of my predecessor given in para.6 of the order of the Tribunal dated 14 9-2000:---
'The above action against the department officials may, however, be taken only after conducting proper inquiries and only if the wilful and negligent default is established. "
The above sentence may be read as a part of para.6 of the Tribunal's order, dated 14-9-2000.
14. The application is decided accordingly.
C.M.A./M.A.K/83/Tax (Trib.)Order accordingly.