COMMISSIONER OF INCOME-TAX, RAWALPINDI ZONE, RAWALPINDI VS MUHAMMAD ASHRAF BKO, GUJJAR KHAN
2001 P T D 2620
[Lahore High Court]
Before Nasim Sikandar and Mansoor Ahmad, JJ
COMMISSIONER OF INCOME‑TAX, RAWALPINDI ZONE, RAWALPINDI
versus
MUHAMMAD ASHRAF BKO, GUJAR KHAN
C.T.R. No. 68 of 1997, heard on 08/05/2001.
Income Tax Ordinance (XXXI of 1979)‑‑‑
‑‑‑‑Ss. 65 & 136‑‑‑Assessment‑‑‑Reference to High Court‑‑‑Assessment relating to the charge years 1975‑76 to 1979‑80 after the commencement of the Income Tax Ordinance. 1979, could not be made without issuance of notices under S.65 of the Ordinance.
C. T. R. No.345 of 1991 ref.
Kh. Muhammad Saeed for Petitioner.
ORDER
This is a case stated by the Rawalpindi Bench of the Income Tax Appellate Tribunal under section 136(1) of the Income Tax Ordinance, 1979. The following question of law is said to have arisen out of their order recorded on 15‑1‑1985:‑‑‑
"Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal had rightly concluded that after the commencement of the Income Tax Ordinance, 1979 the assessments relating to the charge years 1975‑76 to 1979‑80 could not be made without issuance of notices under section 65 of the Ordinance?
2. The facts in brief are that the respondent at the relevant tithe owned a brick kiln at Dora Boda, Tehsil Gujar Khan District Rawalpindi on the basis of survey report he was issued notices under section Sty of the Ordinance requiring him to put in returns. In response to the sail notices served upon him in June, 1982 the respondent/assessee returned nil income, for the assessment years 1975‑76 to 1978‑79 while for the charge year 1979‑80 a sum of Rs.1,500 was declared as income. As to the years prior thereto viz. 1975‑76 to 1978‑79 it was claimed that no business was done by him.
3. The Assessing Officer rejected the returned version and framed assessments for the years 1975‑76 to 1979‑80 at various sums. The assessee succeeded with relation to the assessment years 1975‑76 to 1978‑80 as the learned First Appellate Authority concluded that no evidence worth the name was brought on record to reject the plea of the assessee that no business was done during these years. The assessment framed for the year, 1979‑80 was however, maintained. The assessee as well as the revenge approached the Tribunal by way of a cross‑appeal. After hearing both of them and by relying upon their earlier reported judgments by a Single Bench of the Tribunal, concluded that the assessments framed in pursuance of the notices issued and served on the assessee under section 56 of the Ordinance were void ab initio. According to the learned Member the legislature had not made any provision of saving clause for section 56 of the Ordinance and, therefore, it could not be applied to any period prior to the enforcement of the Income Tax Ordinance. Thereafter, at the request of the revenue the aforesaid question was framed for our reply and consideration.
4. After hearing the learned counsel for the revenue we are of the view that the answer to the aforesaid question has to be in the affirmative.
5. In a recent opinion expressed in C.T.R. No 345 of 1991 we have examined the provisions of sections 56 and 65 of the Income Tax Ordinance., 1979 in the perspective of repealing and saving provisions of section 166 thereof.
Para. 17 of. the said case reads as under;‑‑ .
"Lastly coming to the issue if notices under section 56 of the Income Tax Ordinance could be issued for a period prior to the enforcement of Income Tax Ordinance, 1979 we find that the revenue does not have any case to argue. Section 166 providing for repeal and savings for certain kind of pending proceedings does not contemplate issuance of notice under section 65 of the Income Tax Ordinance for a period dating back to days when the Act was in force. The two situations contemplated under sub‑clause (c) of subsection (2) of section 166 do not cover a situation where a person had not filed a return before the enforcement of the Ordinance. The first situation relates to cases where a notice under section 34 of the repealed Act had already been issued before the enforcement of the Ordinance and second, where the provisions of section 65 of the Ordinance needed to be invoked on the grounds stated therein. Since no saving clause provides for issuance of a notice under section 56 in respect of any year prior to the enforcement of the Ordinance we will hold that a notice under section 56 cannot be issued for any assessment year prior to the date of enforcement of the Ordinance i.e. 1‑7‑1979."
6. That being so we find that the view adopted by the learned Single Bench of the Tribunal is in accordance with law. Therefore, the aforesaid question framed at the instance of the revenue is answered in the affirmative.
M.B.A./C 95/L ?????????????????????????????????????????????????????????????????????? Reference answered.