I.T.A. No.4071/LB of 2000, decided on 7th February. 2002. VS I.T.A. No.4071/LB of 2000, decided on 7th February. 2002., 2002 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2318 (2002)

(a) Income-tax----

‑‑‑‑Acknowledgment slip being the intent of the Legislature was a statutory mandate.

(b) Income Tax Ordinance (XXXI 79)‑‑‑

‑‑‑‑S.66‑A‑‑‑Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order‑‑‑Opportunity of being heard‑‑‑Physical appearance‑‑‑Opportunity of being heard as used in S.66‑A of the Income Tax Ordinance, 1979 did not mean that if the assessee or his Authorised Representative did not physically show appearance and replied through a letter the requirement of law was not fulfilled.

(c) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑S.66‑A‑‑‑Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order‑‑‑Quality of assessment‑‑‑In‑depth inquiry‑‑‑Cancellation of assessment‑‑‑Validity‑‑‑Quality of assessment was not a valid reason for considering the order as erroneous and prejudicial to the interest of Revenue and likewise the suspicion and presumption that in‑depth inquiry in the case would have resulted in more Revenue had, no basis‑‑‑Such style of cancelling the order was against the spirit of law.

(d) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑S.66‑A‑‑‑Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order‑‑‑Depreciation not claimed‑‑‑Cancellation of assessment‑‑‑Validity‑‑‑Taxpayer was not legally bound to claim depreciation in the sense that the law had prescribed a procedure for the claim‑‑‑If the claim was not made in the prescribed manner the Assessing Officer had the power to disallow the same‑‑‑If the assessee said that he purchased the asset/car at the fag end of the year, practically there was no depreciation and he therefore, opted not to claim the same‑‑‑Claim for deprecations would have resulted in lesser income, which did not cause prejudice to the interest of Revenue‑‑‑Neither on purchase of asset/car nor on the issue of depreciation the Inspecting Additional Commissioner could establish the order to be erroneous nor he could justify that it had caused prejudice to the interest of Revenue‑‑‑Cancellation of order was not .justified and the same was disapproved by the Tribunal.

Sher Muhammad Gondal for Appellant.

Anwar Ali Shah, D.R. for Respondent.

Date of hearing: 22nd November, 2001.

ORDER

KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER).‑‑‑--This appeal under section 66‑A is filed by the assessee. The learned A.R. while challenging the same firstly argued that the acknowledgment slip issued by the Department is not an order hence it should not be cancelled by the I.A.C. Further, that the assessee has not been asked to come to the Department physically, which is in contravention to the requirements of section 66‑A that speaks of allowance of an opportunity of being heard. These arguments of learned A.R. are purely misconceptions. The acknowledgment said has been declared to be an order by the Legislature. To say that it is not an order is not acceptable top us.

Furthermore, the opportunity of being heard as used in section 66‑A does not mean that if the assessee or his A.R. does not physically show appearance and replies through a letter the requirement of law is not fulfilled. Compliance of letter by the assessee shows that he has been allowed an opportunity of being heard.

This disposes of the first two objections of learned A.R. Without prejudice to above the learned A.R. argued that the issue of purchase of car has properly been taken care of by the Assessing Officer. The difference in sale of the old car and purchase of the new car which was of Rs.88,000 stood separately explained. The statement of affairs is obtaining on record and the difference has been met from the sources available. The objection of I.A.C. that the assessee could not have saved Rs.88,000 from his total income for the year at Rs.1,41,000 is an observation which does not find support from the record of assessment. The quality of assessment he remarked has never been considered as a valid reason for considering the order as erroneous and prejudicial to the interest of Revenue. The entire discussion of the I.A.C. revolves around his suspicion and presumption that in depth inquiry in the case would have resulted in more Revenue. We have in a number of cases held this style of cancelling the order to be against the spirit of law.

The learned D.R. was confronted this fact time and again, The Court asked him to point out from the record facts and particular events on the basis of which the order has been considered as erroneous. In reply whereof he repeated the observations of learned I.A.C.

The other issue is that the assessee has not claimed depreciation hence the order becomes erroneous and prejudicial to the interest of Revenue. The taxpayers are not legally bound to claim depreciation in the sense that the law has prescribed a procedure for the claim. It says that if the claim is not made in the prescribed manner the Assessing Officer has got the power to disallow the same. Further, the assessee says that he purchased the car on the fag end of the year hence practically there was no depreciation. He, therefore, opted not to claim the same. Moreover, the claim would have resulted in lesser income, which obviously does not cause prejudice to the interest of D Revenue.

Neither on purchase of car nor on the issue of depreciation the learned I.A.C. could establish the order to be as erroneous nor he could justify that it has caused prejudice to the interest of Revenue. The cancellation of order, therefore is not justified and the same is hereby disapproved.

The appeal filed by the assessee, therefore is accepted and is accordingly disposed of.

C.M.S./M.A.K /349/Tax(Trib.)??????????????????????????????????????????????????????????? Appeal accepted.