W.T.AS. NOS.812/LB TO 817/LB OF 2000 VS W.T.AS. NOS.812/LB TO 817/LB OF 2000
2001 P T D 2075
[Income-tax Appellate Tribunal Pakistan]
Before Rasheed Ahmed Sheikh, Judicial Member and
Mrs. Safia Chaudhry, Accountant Member
W.T.As. Nos.812/LB to 817/LB of X000, decided on 26/07/2000.
(a) Wealth Tax Act (XV of 1963)---
---S. 41---Service of notices---Doubtful service---Effect---Assessments were set aside by the First Appellate Authority for fresh adjudication on the ground that services of statutory notices were doubtful ---Assessee asserted that once the First Appellate Authority had come to the conclusion that that ice of notice was doubtful, he should have either annulled or cancelled the re-assessment order rather remanding the case to the Assessing Officer for de novo consideration---Validity---Where order was made in the absence of proper service of call notice or on account of doubtful service, such order wasvoidable and should be set aside rather than annulling or cancelling the same ---No prejudice had been caused to the assessee by setting aside the same assessment for de novo consideration as the matter was still wide open and the assessee was at liberty to plead his case in his own fashion and could also adduce any documentary evidence in support of his contention---Assessment was rightly vacated by the First Appellate Authority ---Appeal was dismissed by Appellate Tribunal in circumstances.
1980 PTD 343 distinguished.
(b) Wealth Tax Act (XV of 1963)------
----S. 16(2)---Assessment---Jurisdiction----Section 16(2) of the Wealth Tax Act, 1963, in no way confers jurisdiction upon the Assessing officer to pass an order under the Wealth Tax Act, 1963---Section 16(2) simply envisages that if the Assessing officer is not satisfied with the return furnished by the assessee, he shall serve a notice upon him either to attend in person in the office on a date specified in the notice or to produce or cause to be produced on that date any evidence on which the assessee may rely in support of his return---Section 16(2) of the Wealth Tax Act, 1963 clearly spells out that S.16 (2) is a machinery section and has nothing to do with the assumption of jurisdiction to assess the net wealth of the assessee and determine the amount payable by him as tax or the amount refundable to him---Said section only required attendance of the assessee so as to direct him to adduce documentary evidence, if any, to substantiate his returned version.
(c) Wealth tax-- -----
----Decision in income-tax proceedings---Effect in wealth tax assessments Decision made in the income-tax proceedings had in no way any binding effect on the wealth tax assessment.
(d) Wealth Tax Act (XV of 1963)---
----S.23(3)---Income-tax Act (XI of 1922), S.31(6)---Comparison and distinction between the two legislations.
Shaukat Amin, F.C.A. for Appellant.
Mian Khadim Hussain, D.R. for Respondent.
Date of hearing: 26th July, 2000.
ORDER
These six appeals preferred at the instance of the assessee are directed against a consolidated order passed by the learned CWT(A) Zone-I, Lahore, dated 11-4-2000 and pertain to the assessment years 1990-91 to 1995-96.
2. The facts leading for disposal of these appeals are that original assessments in respect of the present assessee, were finalized on 30-6-1997, under section 16(5) of the Wealth Tax Act, 1963 at net wealth of Rs.53,17,353, Rs.55,60,052 Rs.56,59,987, Rs.57,59,987, Rs.58,84,987 and Rs.60,34,987 respectively for the assessment years 1990-91 to 1995-96. This order was assailed before the first appellate authority who by virtue of his order, dated 10-1-1998 set aside the case for de novo consideration with the direction that the fresh assessment should be made after affecting proper service of the statutory notices. On re-assessment, according to the Assessing Officer, the statutory notices were issued on quite a number of occasions but the assessee opted not to participate in the reassessment proceedings. This resulted into once again formulation of an, ex parte assessment. Accordingly, the net wealth originally determined was repeated by the Wealth Tax Officer vide his order, dated 30-6-1997. As per the reassessment order the following notices were issued but remained unresponded by the assessee:
| S.No. Notice underDate ofDate ofDate of sectionissueservicecompliance 1.16(2)20-5-199922-5-199926-5-1999 2.16(2)15-6-199917-6-199924-6-1999 3.1717-6-199917-6-199924-6-1999 4.14(2)15-6-199917-6-199924-6-1999 5.16(2)25-6-199925-6-199930-6-1999 |
3. Feeling dissatisfied with this treatment the assessee again filed appeals before the CWT(A) and contended that no statutory notice whatsoever has been served on him. Rather completion of reassessment order came to the assessee's knowledge on receipt of recovery notice on 28-2-2000. Latter on, the appeals were filed after obtaining duplicate copy of the reassessment order and the demand notice. The CWT(A) after having taken regard to the assessee's assertions held that the service of notice was doubtful. This time again the assessment was set aside for fresh adjudication after getting proper service of the statutory notices. Hence, these further appeals.
4. The assessee's learned A.R. vehemently asserted that once the CWT(A) has come to the conclusion that service of the notice was doubtful, he should have either annulled or cancelled the reassessment order rather remanding the case to the Assessing Officer for de novo consideration. The learned A.R. supported his contention by referring to a case cited as 1980 PTD 343 whereby the Tribunal in the similar circumstances had annulled the assessment instead of setting aside the same. He thus, prayed that respectfully following the principle laid down in the reported judgment, the reassessment order may be annulled in the present case as well. The learned D. R., on the other hand, supported the impugned order and contended that it was the assessee's own contention that he was not properly served with the statutory notices. In view of this situation, the learned CWT(A) has rightly set aside the reassessment order. Thus, no grievance has been caused to the assessee by such directions.
5. We have given anxious thought to the averments advanced before us and are fully convinced that the contentions raised by the learned D.R. have no locus standi in the eye of law. It is so because only such order is to be annulled or cancelled where question of assumption of jurisdiction is involved. The whole controversy in the present case revolves around section 16(2) of the Wealth Tax Act, 1963. This section in no way confers jurisdiction upon the Assessing Officer to pass an order under the Wealth Tax Act. This section simply envisages that if, the DCIT is not satisfied with the return furnished by the assessee, he shall serve a notice upon him either to attend in person in the office on a date being specified in the notice or to produce or cause to be produced on that date any evidence on which the assessee may rely in support of his return. Bare reading of this section clearly spells out that this is a machinery section and nothing to do with the assumption of jurisdiction to assess the net wealth of the assessee and determine the amount payable by him as tax or the amount refundable to him. So, this section only requires attendance of the assessee and directs him to adduce documentary evidence, if any, to substantiate the returned version. This is subsection (3) of section 16 of the Wealth Tax Act, 1963 which empowers the DCIT to do so. We, therefore, hold that in the cases where the order is made in the absence of proper service of call notice or on account of doubtful service, such order is voidable and should be set aside rather than annulling or cancelling the same.
6. Coming to the case law referred to by the learned A.R. in support of his assertion cited above, we have noted that the facts of the reported judgment are squarely distinguishable inasmuch as that was a case of income tax enactment while the present is a case of wealth tax jurisdiction. The sphere of both -these enactments is altogether distinct to each other. In no way the decision made in the income tax proceedings has any binding effect on the wealth tax assessment. The case cited by the learned A.R. relates to the repealed Income-tax Act, 1922 whereas the assessee's case is that of wealth tax assessment. Section 23 of the Wealth Tax Act, 1963 deals with institution of appeals by the assessee from the orders of the DCIT and disposal thereof by the A.A.C. whereas section 31 of the Repealed Income Tax Act, 1922 mentions about the same functions. Relevant provision of section 23 of the Wealth Tax Act which enunciates the A.A.C's. power is subsection (3): This subsection empowers the A.A.C. to pass any order on the appeal as he thinks fit after giving the appellant a reasonable opportunity of being heard and communicate the order passed by him to the assessee and the Commissioner. The only exception provided in this subsection is that no order of enhancement in wealth shall be made unless the appellant has been given a reasonable opportunity of showing cause against such enhancement. This, clearly shows that under section 23(3) of the Wealth Tax Act vast powers have been delegated to the A.A.C., for the purpose of disposal of the appeals, as warranted by the facts and circumstances of the case, while according to clauses (a) to (h) of subsection (6) of section 31 of the repealed Income-tax Act, 1922, the A.A.C. is empowered to dispose of the appeals by reducing, enhancing or annulling the assessment or setting aside the assessment and directing the Assessing Officer to make afresh enquiry etc. Comparison of both these sections clearly indicates that under section 23(3) of the Wealth Tax Act wider powers have been delegated to the A.A.C. to pass any order on the appeal whereas the powers assigned to the A.A.C. art; qualified under section 31(6) of the repealed Income-tax Act.
7. Moreover, in the reported decision the contention of the assessee before the Tribunal was that as the ITO had already completed all the enquiries and it was not his case that further enquiries were necessary and if at all that was needed, the A.A.C. may himself require some enquiries to be conducted and may direct the making of such enquiry by the ITO as may have a bearing on the assessment itself. Further, contention was that since the A.A.C. has not issued any such direction, as he did not find it necessary, therefore, he had no other alternative but to annul the assessment. Inter alia, having taken regard to these assertions, the Tribunal finally came at the assessee's rescue and cancelled the reassessment order made under section 63/65 of the income Tax Ordinance, 1979 in that case by holding that setting aside of the assessment was not at all sustainable. On the contrary, in the present case it was the assessee's contention before the first appellate authority that he was not properly served with the call notice besides service of last notice, dated 25-6-1999 was also denied. However, on perusal of the record it was found by the first appellate authority that the statutory notices had been got served upon the assessee but service thereof was found to be doubtful. In this background, the Appeal Commissioner deemed it appropriate to vacate the impugned order for de novo proceedings after proper service of the notices.
8. In the circumstances, we are of the considered view that the case law referred to by the learned A.R. to support his contention cannot be relied upon because the ratio decidendi therein revolves around altogether different set of facts. Hence, the reference and reliance on the case-law cited before us has no bearing in this case. Even otherwise we feel convinced that no prejudice has been caused to the assessee by setting aside the assessment for de novo consideration by the Appeal Commissioner as the matter was still wide open and the assessee is at liberty to plead his case in his own fashion and can also adduce any documentary evidence in support of his contention.
9. In view of foregoing discussion, we hold that the Appeal Commissioner has rightly vacated the assessment order for de novo proceedings after getting the service of statutory notices effected upon the assessee. Accordingly, the Appeal Commissioner's findings are endorsed by us in its entirety. Consequently, all the six appeals filed at the behest of the appellant stand dismissed.
C.M.A./M.A.K./81/Tax(Trib.)Appeals dismissed.