I.T.A. NO.6134/LB OF 1999 VS I.T.A. NO.6134/LB OF 1999
2001 P T D (Trib.) 3117
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Munir Qureshi,
Accountant Member and Syed Nadeem Saqlain,
Judicial Member
I.T.A. No.6134/LB of 1999, decided on 31/03/2001.
(a) Income Tax Ordinance (XXXI of 1979)---
----Ss.66A & 59(I)---Powers of-Inspecting Additional Commissioner to revise Deputy Commissioner's order---Self-Assessment Scheme ---Non availability of assessment order---In response to show-cause notice under S.66A of the Income Tax Ordinance, 1979, question of non-availability of assessment order under S.59(1) of the Income Tax Ordinance, 1979 was not raised but the assessment was supported and it was asserted to be valid in all respects ---Assessee could not be allowed subsequently to contest alleged non availability of such order under S.59(1) of the Income Tax Ordinance, 1979 at appellate stage.
(b) Income Tax Ordinance (XXXI of 1979)---
----S.59(l)---Self-assessment---Assessment order---Order under S.59(1) of the Income Tax Ordinance, 1979 is generated automatically once Return filed under Self-Assessment Scheme is found to be in order and taken up for processing by making appropriate entry on the order sheet.
(c) Income Tax Ordinance (XXXI of 1979)---
----Ss.66A &59(1)---C.B.R. Circulars No. 5 of 1997, dated 12-7-1997 and No.11 of 1997, dated 9-9-1997---Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order---Self-Assessment Scheme for the assessment year 1997-98---New assessee---Inspecting Additional Commissioner initiated action order S.66A of the Income Tax Ordinance, 1979 on the basis of violation of Self-Assessment Scheme's requirements i.e. non-filing of wealth statement and declaration being not in the ratio of 1/3rd of the capital---Validity---Even if it be accepted that A.O.P. had in effect been exempted from filing wealth statement the fact remains that capital available vis-a-vis income declared was grossly understated/deficient and income cited on the return was as a consequence inadequate and unacceptable for self-assessment purposes---Order of the Inspecting Additional Commissioner was maintained by the Tribunal.
S. A. Khan for Appellant.
Ahmad Kamal, D.R. for Respondent.
Date of hearing: 15th February, 2001.
ORDER
MUHAMMAD MUNIR QURESHI (ACCOUNTANT MEMBER).--- This appeal by an A.O.P. is directed against order of the I.A.C., Range-V, Zone-A, Lahore, dated 2-11-1999.
2. According to the appellant, I.A.C.'-s action under section 66A is not tenable in law as there is, statedly, no order of assessment under section 59(1) available on the assessment record of appellant. It is argued that the I.A.C. can only exercise revisionary jurisdiction under section 66A provided an order under section 59(1) exists on the assessment record and as in the present case revision has been made in the alleged absence of an order of assessment, the condition precedent for action under section 66A has statedly been violated rendering the impugned order under section 66A to be a nullity in the eye of law.
3. The above contention of appellant has been made through "Additional Ground of Appeal" filed on 7-9-2000 and this Ground is statedly additional to the grounds already filed by appellant alongwith appeal in which it had been argued that reliance placed by the I.A.C. or C.B.R. Circular No.5 of 1997 was misplaced as the said Circular had statedly been superseded/modified by C. B. R. Circular No. 11 of 1997.
4. The D.R. has been heard.
5. We have looked into the matter and after examining the available record and the submissions made by both parties we find that the appellant has made what amounts to an "about face" on filing the additional ground of appeal. This is evident from the fact that in the original grounds the appellant had simply contested I.A.C.'s reliance on Circular No.5 insofar as the action under section 66A had been initiated on the basis of alleged violation of the Self-Assessment Schemes requirement that (a) wealth statements of members of A.O.P. accompany the Return of Income and (b) that income and capital be cited in the Return in the katio of 1:3. The I.A.C. having noted on inspection of appellant's assessment record that no wealth statement had been filed by the members of the A.O.P. and total income declared as per Return at Rs.43,200 was, prima facie, woefully inadequate in that the minimum capital investment required to be made in the case of a flour mill stood in the range of Rs.75 lacs to Rs. l crore and resultantly total income too had to be cited at between Rs.25 lacs to Rs.33 lacs vis-a-vis capital of Rs.75 lacs to Rs. L crore if it was to be acceptable under the S.A.S. for 1997-98. As against this, the appellant had declared Total Income at Rs.43,200 only and on the basis of such level of income, the capital derived at Rs.129,600 (i.e. 3 times the income declared) was insufficient/deficient/understated thereby ousting Return from the purview of Self-Assessment. Acceptance of such a Return under section 59(1) was found to be erroneous as it was in conflict with express statutory stipulation and it was prejudicial to the interest of revenue as tax required to be paid on the basis of total income so declared was significantly less than the tax required to be paid with a return that cited correct capital and income.
6. The appellant vehemently contested the I.A.C.'s findings when show-cause notice was issued and it was submitted by the appellant that the C.B.R. had allegedly modified the original self-assessment scheme through Circular No. 11 of 1997 and the I.A.C. by statedly ignoring Circular No. I I had made an error that was allegedly fatal to the action under section 66A.
7. We have examined Circular No. It, dated September 9, 1997. In it it is laid down that the one page Return of Income prescribed under the Simplified S.A.S. for 1997-98 would be acceptable without any accompanying statement, accounts, details and documents as stipulated in the S.S.A.S. itself. Thus what Circular No.11 does is to further simplify the S.S.A.S. and free assessee from the hassle of filing supporting documentation/statement/details of any sort with the Return. This in effect would mean that assessees would no longer be required to file wealth statements too and thus assessees' failure to file wealth statements alongwith the Return would be taken care of and would not invalidate the Return from the purview of S.S.A.S. for 1997-98. The I.A.C. had replied back to the appellant then that Circular No.11 was not applicable to "new assessee's" and as the appellant was a new assessee, therefore, the appellant would still be required to file wealth statement etc. The appellant had strongly contested this rebuttal by I.A.C. and had reiterated that the circular was applicable to new assessees as well as the existing assessees.
8. As regards the I.A.C.'s second reason for invoking section 66A (deficient capital/income) the appellant had taken the stance that enquiry regarding capital or cost of assets is not within the purview of section 66A and that no probing enquiry was possible in exercise of revisionary jurisdiction.
9. In view of the discussion supra, it is patent that the appellant had asserted before the I.A.C. that assessment made under section 59(1) by the Assessing Officer accepting the return filed by the A.O.P. under the simplified Self-Assessment Scheme for 1997-98 was consistent with statutory stipulation and there being no valid grounds for action under section 66A, that assessment made under section 59(I) had attained finality and could not be disturbed.
10. Now the appellant is telling us through its additional grounds of appeal that there is no order of assessment under section 59(1) in the field as no copy thereof allegedly obtains on appellant's assessment record and notwithstanding the presence of Form IT-30, Notice of Demand under section 85 and entry in D.C.R. and entry on order-sheet, the I.A.C. is, according to the appellant, debarred from taking any action under section 66A.
11. We have duly considered appellant's changed stance and we find that it is trite law that a taxpayer cannot approbate and reprobate in the same breath. This is exactly what the appellant is doing in the present appeal. First the appellant argues before the I.A.C. that the assessment under section 59(1) be left undisturbed and now before the Tribunal the same appellant asserts that there is no assessment under section 59(1) in the field at all. Clearly this is a contradiction in terms and undoubtedly an afterthought.
11-A. As the appellant never challenged the alleged non-availability of assessment order passed under section 59(1) when the I.A.C. issued his show-cause notice and the appellant supported that assessment and asserted A the same to be valid in all respects, the appellant cannot contest alleged non availability of said order under section 59(1) at this stage. If for some reason the order under section 59(1) is not now available on the assessment record at this stage, the only conclusion is that it has been misplaced and was available when the I. A. C. took action under section 66A. In any case it is to be noted that an order under section 59(1) is generated automatically once return filed under S.A. S. is found to be in order and taken up for processing by making appropriate entry on the order-sheet. In the present case, it is not denied that order sheet entries, IT-30 calculations, D.C.R. entry and Notice of Demand issued under section 85 of the4Ordinance alongwith the assessment order, are all in order. That being so, we find that the additional ground filed is of no help to the appellant in contesting the I.A.C.'s action under section 66A.
12. Coming now to the original grounds of appeal, we bind that the appellant has belatedly fled documents purporting to show that the appellant A.O.P. had sold out his flour mill assets comprising machinery and furniture to Mr. Qaiser Rashid for consideration of Rs.277,000 as on 1-7-1996. This assertion was never made before the I.A.C. earlier. No registered sale-deed is available to substantiate contention made. We will, therefore, ignore this contention of the appellant, belatedly made before us for the first time.
13. The only matter remaining is the applicability and scope of Circular No.11. We have given the matter our undivided attention and we find that even if it be accepted that the A.O.P. had in effect been exempted from filing wealth statements the fact remains that Prima facie capital available vis-a-vis income declared is grossly understated/deficient and income cited on the return is as a consequence, inadequate and unacceptable for self-assessment purposes. As stated above, a flour mill requires significant investment ranging anywhere between Rs.75 lakhs to Rs.l crone. No doubt the appellant says (belatedly) that the A.O.P. had sold out the mill To one member of the A.O.P. for Rs.277,000 only. However, this contention is uncorroborated, unsubstantiated and unproved and appears to have been contrived artificially simply to escape due levy of tax under section 66A. We, therefore, reject the same and maintain the order of the I.A.C.
14. Resultantly, the appeal is rejected.
C.M.A./M.A.K./115/Tax(Trib.)Appeal rejected.