I.T.As. Nos. 2173/KB to 2175/K of 2001, decided on 1st July, 2002. VS I.T.As. Nos. 2173/KB to 2175/K of 2001, decided on 1st July, 2002., 2002 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 3114 (2002)

Income Tax Ordinance (XXXI of 1979)---

----S. 156---Rectification of mistake---Loss assessed---Assessment was rectified as there was mistake apparent on record and consequently, assessments for the next two years were also rectified---Validity---In the original assessments for the charge year 1995,-96 there was a mistake which was apparent from the record---Assessment order was correctly rectified by the Assessing Officer though the method of computing income by the Assessing Officer was different and resultant income remained the same---Order contained a mistake which was apparent from record and was rightly rectified by the Assessing Officer, though his method of computing income was different---Other two assessments were consequent to the rectified assessment for the charge year' 1995-96 and also in accordance with law which were upheld by the Appellate Tribunal.

A.S. Jaffri for Appellant.

Dr. Fazal Muhammad Abrejo, D.R. for Respondent.

Date of hearing: 29th June, 2002:

ORDER.

MUHAMMAD TAUQIR AFZAL MALIK (JUDICIAL MEMBER). ---These are three appeals by the assessee against the order of AAC Sukkur, dated 30--R-2001. All the grounds of appeal for all the years under review are common which are as under:---

That the order of A.A.C. which confirmed the assessment framed under section 156 by the CIT(A) is bad in law and facts.

That the order passed for the years under appeal are unjustified and with allowing proper opportunity of being heard.

That without prejudice to the above the AAC allegedly issued a final notice for hearing of appeal for 24-8-2001 which was not duly served on the appellant and the impugned order was passed on 30-8-2001 which is illegal, ultra vires and against the provisions of section 131 of the Income Tax Ordinance, hence rehearing of the appeal be allowed.

That without prejudice to the above, before passing an order under section 156 proper show-cause notice was properly served upon, the appellant, hence impugned order is illegal and unjustified.

That without prejudice to the above, the impugned addition under section 13(1) of the Ordinance by way of rectification is beyond the jurisdiction, hence the scope of rectification is very limited.

That the AAC has not adjudicated the ground No.6 in his order, therefore, rehearing may be allowed.

As far as the second last grounds are concerned, they are against the order DCIT which shall not be adjudicated by us AR or the assessee knows that what is the proper remedy for which they are the best judge of the circumstances that what remedies are available to them. As far as the appeal on merits is concerned, our order is as under:

DCIT on 3-4-2001 after perusal of the assessment order observed that the assessment under consideration for the charge year 1995-96 declared GP by the assessee was rejected. And GP applied was 20% it worked out at Rs.30,00,000. After reducing administrative expenses claimed by the assessee at Rs.27,54,370 and adding disallowance made at Rs.266,906 and addition made at Rs.11,60,000 his income came to Rs.16,72,536. While in the assessment order by mistake loss has been written since, the mistake was apparent on the record which required rectification, the DCIT after giving an opportunity of being heard to which no compliance was made, rectified this mistake and rectified the order which is as under:---

For the charge year 1996-97 as for the assessment year 1995-96 inadvertently loss was worked out instead of income which came to Rs.16,72,536. Therefore, this order was also rectified. Hence the DCIT found that there was no need to adjust the loss in the income for the year under consideration. The loss earlier adjusted required to be rectified being mistake apparent on record, after affording an opportunity of being heard but no compliance was made by the assessee, rectified the order as under:

Income for the year as originally determinedRs.5,00,000

For the charge year 1996-97 again in view of the inadvertent loss worked out for 1995-96 which was actually income at Rs.16,72,536 the assessment for 1997-98 also found to be rectifiable being mistake apparent on the face of the record and after allowing an opportunity of being heard for which no compliance was made by the assessee rectified the order was passed as under:---

Income for the year as originally determined Rs.2,000,000

The assessee went in appeal before the AAC. The AAC after statutory notices under section 131; dated 31-5-2001 fixed for compliance on 8-6-2001 duly sent through registered post but on the date fixed for compliance from the AR of the appellant, the case was adjourned on the specific request of the appellant and was fixed for compliance on 23-6-2001 for which intimation slip was duly issued and served upon the appellant. That again on the date fixed for compliance another application was received in this office containing request for time, which was again granted and the case was fixed for 5-7-2001 and the intimation of the same was duly sent to the appellant through UMS but again on the date fixed for compliance no one appeared nor any application was received for adjournment,

In the interest of justice and to provide the appellant opportunity of being heard, a final notice under section 131, dated 16-8-2001 was issued fixing date for compliance on 24-8-2001 and the said notice was duly sent through UMS. That again on the date fixed for compliance no one appeared nor any application was received for adjournment.

In view of this the AAC opted to proceed in finalizing these appeals to the best of his judgment. He upheld the order passed under section 156 by the DCIT and dismissed the appeal being devoid of any merit.

In this connection the AR of the assessee worked out for all the three years under appeal his income loss which is annexed as "A" which has been placed on record and is as follows:

Assessment Year 1995-96:

Receipt estimatedRs.15,000,000

G.P. applied @ 20%Rs.30,00,000

Less: Gross LossRs.52.13.128(Rs.22,13,128)

Add Admn expensesRs. 27.54.370

Add Admn expenses(Rs.49,61,498)

(i) Add BacksRs. 2,66,906

(ii) Addition underRs.11.60.000Rs .14.26.906

section 13(1)(d)

Net Loss(Rs.35,40,592)

Asstt. Year 1996-97:

Assessed incomeRs.5,00,000

B/F Loss(Rs.35.40.592)

Loss assessed(Rs.30,40,592)

Asstt. Year 1997-98:

Assessed incomeRs.20,00,000

B/F Loss (Rs.30.40.592)

Net Loss (Rs.10,40,592)

In .rebuttal to the same the . DR worked his computation of income for the charge year 1995-96 which is annexed as "B". This has also been placed on file which is as under:---

CORRECT COMPUTATION OF INCOME

(ASSESSMENT YEAR 1995-96)

Net Loss as per accountsRs.7,967,498

Receipts estimatedRs.15,000,000

G.P. @ 20%Rs.3,000,000

Add Gross LossRs.5,213,128Rs.8.213.128

Rs.245,630

Add backsRs. 266,906

Addition under section 13(1)Rs.1.160.000

Total income:Rs.1,672,536

Resultantly, in the original assessments for the charge year 1995-96 there was a mistake which was apparent from the record. Therefore, the assessment order was correctly rectified by the Assessing Officer though the method of computing income by the Assessing Officer was different from above. However, resultant income remained the same. It has been proved without' any A shadow of doubt that the order contained a mistake which was apparent from record and was rightly rectified by the DCIT. Though his method of computing income was different from the above. As far the other two appeals for the charge years 1996-97 and 1997-98 are concerned they are consequent to the rectified assessment for the charge year 1995-96 and also in accordance with law, hence upheld.

All the three appeals of the assessee being devoid of any merits are dismissed.

C.M.A./M.A.K./453/Tax(Trib.)Order accordingly.