Income Tax Ordinance (XXXI of 1979)‑‑-

‑‑‑Ss. 62(1), 129 & 134‑‑‑Assessment on production of accounts, evidence, etc. ‑‑‑Assessing Officer failed to confront the assessee in terms of provisions of S.62(1) of the Income Tax Ordinance, 1979 in respect of the defects found in the books of accounts‑‑‑First Appellate Authority set aside the assessment for de novo decision with the direction that Assessing Officer should confront the assessee with the specific defects noted by him in the books of accounts of the assessee‑‑‑Validity‑‑‑First Appellate Authority had erred in law while setting aside the case instead of annulling the assessment when the Assessing Officer failed to confront the assessee with the defects found by him in the books of accounts which was mandatory provision of law for framing the assessment‑‑‑Order of the Assessing Officer was vacated by the Appellate Tribunal being in violation of S.62 of the Income Tax Ordinance, 1979.

1999 PTD (Trib.) 3892 and 1985 PTD (Trib.) 178 rel,

Abdul Rasheed Gill, I.T.P. far Appellant.

Mehboob Alam, D.R. for Respondent.

Date of hearing: 11th December, 2001.

ORDER

SYED NADEEM SAQLAIN (JUDICIAL MEMBER).‑‑‑The titled appeal has been filed at the instance of the assessre against the order, dated 11‑10‑2001 passed by the learned CIT(A). The sole grievance of the assessee/appellant is that the learned CIT(A) was not justified set aside the case instead of annulling the same.

2. The assessee, a private limited company, derives income frown manufacturing and assembling of split air‑conditions units and chillers. Before the learned CIT(A), the learned A,R. of the assessee contended that the learned DCIT, failed to confront the assessee in terms of provisions of section 62(1) in respect of the defects found in the books of accounts. However, the learned CIT(A), after accepting the plea of the assessee, set aside the assessment for de novo decision with the direction that he should confront the appellant with the specific defects noted by him in the books of accounts of the appellant. Being aggrieved with the above decision, the assessee has preferred this appeal.

3. The learned A.R. of the assessee made his emphasis on the legal ground and submitted that as per law the Assessing Officer was bound to confront the assessee with the defects found by him in the books of accounts and since he failed to do so, the assessment framed being ab initio void should have been annulled by the learned First Appellate Authority. In support of his contention reference was made to a case reported as 1999 PTD (Trib.) 3892. The relevant paragraph of the Tribunal's order is reproduced as under:

"ITO in terms of proviso to subsection (1) of section 62 should have confronted the assessee with the defects found in the books of accounts: It was a mandatory provision which he was required to follow. As he failed to do so he has no legal authority to make any addition in the declared trading results. Any addition made is, therefore, ab initio, illegal and void."

In another case reported as 1985 PTD (Trib.) 178 it has been held that failure to comply with mandatory provision of statute with regard to giving reasonable opportunity to the assessee has‑rendered the impugned order in this behalf wholly void. Directions were also made to annul the assessment instead of setting aside the same. The learned D.R. on the other hand supported the impugned finding of the learned first Appellate Authority and prayed for the maintenance of the same.

4. After hearing both the parties and, going through the case‑law cited at the bar, we are of the considered view that the learned First Appellate Authority was erred in law while setting aside the case instead of annulling the assessment when the Assessing Officer failed to confront the assessee with tag defects, found by him in the books of accounts A which is mandatory 'provision of law for framing the assessment. We, therefore, vacate the order of the learned First Appellate Authority and annul the assessment framed by the Assessing Officer being in violation of section 62 of the Income Tax Ordinance, 1979.

5. Appeal of the assessee succeeds in the manner indicated above.

C.M.A./M.A.K./230/Tax (Trib.)

Appeal succeeds.