I.T.As. Nos.902/KB/DB to 904/KB/DB of 2000-2001,decided on 20th March, 2002. VS I.T.As. Nos.902/KB/DB to 904/KB/DB of 2000-2001,decided on 20th March, 2002., 2002 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2431 (2002)

Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss.66‑A(2), 62 & 156‑‑‑Second Sched: Cl. (6‑A)‑‑‑Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order‑‑‑Rectification of mistake‑‑‑Exemption‑‑‑Limitation‑‑‑Assessing Officer allowed exemption under Cl. (6‑A) of the Second Sched. of the Income Tax Ordinance, 1979 by rectifying the original order passed under S.62 of the Income Tax Ordinance, 1979 which was not applicable in the case of assessee‑‑‑Inspecting Additional Commissioner modified the order passed under S.156 of the Income Tax Ordinance, 1979 and income exempted was included in the income of the assessee‑‑‑Assessee contended that order passed under S.66‑A of the Income Tax Ordinance, 1979 was barred by limitation as the limitation started from the date of main order under S.62 of the Income Tax Ordinance, 1979 and not from the date of rectified order under S.156 of the Income Tax Ordinance, 1979‑‑‑Validity‑‑‑Contention of the assessee was generally correct but there were distinguishable features in the case, the relief on exemption of income was not granted in original assessments but was only granted in the order passed under S.156 of the Income Tax Ordinance, 1979 and actual grievance of the Department had come into being on the date of order passed under S.156 of the Income Tax Ordinance, 1979 by the Assessing Officer‑‑‑Period of limitation will start from the date of rectified order‑‑‑Normally the order passed under S.66‑A would be within the period of four years of the main assessment order passed under S.62 of the Income Tax Ordinance, 1979 but where such order was silent on points, which were taken into the orders subsequent to order under S.62 of the Income Tax Ordinance, 1979 were passed by the Assessing Officer, may also be considered‑‑‑Under S.156 of the Income Tax Ordinance, 1979, the changes could be brought in assessment orders which relate to creating new burden on the assessee or new relief to the assessee as the issues were not discussed in order under S.62 of the Income Tax Ordinance, 1979‑‑‑Period of limitation provided under S.66A of the Income Tax Ordinance, 1979 would start from the new order passed under S.156 of the Income Tax Ordinance, 1979 and not from the order originally passed under S.62 of the Income Tax Ordinance, 1979‑‑‑Period of limitation was available to the Inspecting Additional Commissioner and this order was within the time provided under S.66‑A of the Income Tax Ordinance, 1979 and the same was held proper by‑the Tribunal‑‑‑Appeals were dismissed by the Tribunal.

(1999) 79 Tax 273 (Trib.) I.T.A. No.150/KB of 1996‑97; (1992) 66 Tax 126 SC Pak. and (1998) 78 Tax 343 (Trib) ref.

Hassan Naeem, ITP for Appellant.

Imtiaz Barakzai, D.R. for Respondent.

Date of hearing: 21st February, 2002.

ORDER

SYED KABIRUL HASAN (JUDICIAL MEMBER). ‑‑‑These appeals relating to assessment years 1994‑95 to 1996‑97 arise from the order passed under section 66‑A of the Income Tax Ordinance, 1979.

2. The brief facts are that in all the assessment years, the assessee neither filed any claim of exemption nor the return was revised. The original assessment order under section 62 of the Ordinance was passed on 17‑11‑1994 This issue was also not agitated before the learned CIT(A) whereas assessee has filed the appeals on other grounds.

3. Later on, on rectification application, under section 156 of the Ordinance, the Assessing Officer passed an order on 20‑6‑1996 and allowed the exemption. This exemption was granted by the Assessing Officer under clause (6‑A) of the Fourth Schedule to the Income Tax Ordinance. 1979, which was inserted vide Presidential Ordinance VI of 1997 dated 14‑1‑1997, which was not applicable in case of the assessee. therefore, the learned IAC modified the order passed under section 156 of the Ordinance dated 29‑6‑1997 and the income which was exempted was included in the income of the assesses.

4. We have heard Mr. Hassan Naeem learned A.R. of assessee and Mr. Imtiaz Barakzai, learned D.R. We have also perused the relevant record.

5. Mr Hassan Naeem learned A.R. of the assessee, has firstly contended that the orders passed under section 66‑A of the Ordinance were time‑barred as the main orders under section 62 of the Ordinance were passed on 17‑11‑1994; 30‑11‑1995 and 21‑9‑1996 for assessment years 1994‑95. 1995‑96 and 1996‑97 respectively whereas the orders under section 66‑A of the Ordinance for these years were passed on 1‑12‑2000. In support of this contention he has relied upon case‑law (1999) 79 Tax 273 (Trib.).

6. The contention of learned A.R. is generally correct but in this case, there are distinguishable features, as in this case the original assessments were no doubt, passed on 17‑11‑1994, 30‑11‑1995 and 2‑1‑9‑1996 for assessment, years 1994‑95; 1995‑96 and 1996‑97 respectively, but relief on exemption income was not granted. This relief was only granted in the order passed under section 156 of the Ordinance on 20‑6‑1997. In our view, the actual grievance of the Department has come into being on the date of order passed under section 156 of the Ordinance on by the Assessing Officer, therefore, the period of limitation will start from the date he rectified his order. In this respect, the wording of section 66‑A of the Ordinance is as under:‑‑

"66A Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's orders‑‑‑‑(1) The Inspecting Additional Commissioner may call for and examine the record of any proceedings under this Ordinance and if he considers that any order passed .therein by the Deputy Commissioner is erroneous in so far as it is prejudicial to the interests of Revenue. he may, after giving the assessee an opportunity of being heard and after making, or causing to be made, such enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment to be made??????"

For the reading of above, it appears that the Inspecting Additional Commissioner is authorised to call for an examination of the record of any proceedings under the Ordinance and if he considers that any order passed therein by the Deputy Commissioner is erroneous and prejudicial to the interests of Revenue, then he can take action required under the law. And the limitation is mentioned in subsection (2) which is as under:‑‑

"(2) No order under subsection (1) shall be made after the expiry of four year's from the date of the order sought to be revised."

Here, the wording used is: "No order shall be made after the expiry of four years from the date of the order sought to be revised".

7. Therefore, in our view normally the order passed under section 66‑A would be within the period of .four years of the main assessment order passed under section 62 of the Ordinance. but in case where this order would be silent on points, which are taken into the order subsequent to order under section 62 of the Ordinance were passed by the Assessing Officer may also be considered in view of this the contention of learned A.R. of the assessee is repelled.

8. Secondly, the learned A.R. has contended that clause (6‑A) of Part IV or the Second Schedule to the Income Tax Ordinance, 1979 was introduced on 14‑1‑1997 and was applicable for the assessment year 1997‑98. In clause (6‑A). it was mentioned:‑‑‑

? (6-A) Exemption of capital gains from sale of shares.‑‑‑In computing income under this Schedule there , shall not be included `capital gains' being income from the sale of any instrument of redeemable capital as defined in clause (30A) of subsection (1) of section 2 of the Companies Ordinance. 1984 (XLVII of 1984), listed on any stock exchange in Pakistan or shares of a public company, as defined in sub‑paragraph (2) of part IV of the First Schedule to this Ordinance, derived in respect of any assessment year ending on or before the thirtieth day of June, 1998."

This provision, according to learned A. R., was applicable in all the previous years as it was mentioned. "it relates to any assessment years". When it was suggested that whether it was applicable to past and closed transactions as well, the learned A.R. submitted that even the transactions were past and closed because the mistakes can be rectified under section 156 of the Ordinance and the period of four years is always available to the assessee to correct such mistakes. He has also relied upon an unreported case?-law bearing I.T.A. No.150/KB of 1996‑97 and other dated 13‑8‑1997. On this issue, he has also submitted that any remedial or creative legislation designed to soften the harsh and unjust law. The law can be retrospective or prospective as the situation demands. For this assertions, he has relied upon case‑law (1992) 66 Tax 126 SC Pak. And (1998 ) 78 Tax 343 (Trib.), but in our view, the case law relied upon by learned A.R. do not help his case as the contention that the assessee can always take remedy provided under section 156 of the Ordinance and for that, four years time has been provided, but in this case‑this will not apply to past and closed transactions. But in any case, it is presumed that under section 156 of the Ordinance. the changes can be brought in assessment orders which relates to creating new burden on the assessee or new relief to .the assessee as the issues were not discussed in order under section 66‑A of the Ordinance would start froth the new order passed and not from the order originally passed under section 62 of the Ordinance This contention of learned A.R. is also not acceptable and it is held that period of limitation was available to learned IAC and his order is within the time provided under section 66‑A of the Ordinance.

9. Since no other grounds have been taken by learned A.R. of the assessee, therefore, these appeals are dismissed and it is held that the orders passed under section 66‑A of the Ordinance in all the assessment years were proper and the same are upheld.

C.M.A./M.A.K./361/Tax (Trib.)?????????

Appeals dismissed.