Wealth Tax Act (XV of 1963)‑‑‑

‑‑‑‑S. 17B & Second Sched., Part I, Cl. 12(1)‑‑‑Powers of Inspecting Assistant Commissioner to revise Wealth Tax Officer's order‑‑ Exemption‑‑‑House ‑‑‑Exemption. allowed of one self‑occupied house at Lahore was cancelled by the Inspecting Assistant Commissioner on the ground that assessee was employed in Faisalabad and thus was not residing in her house at Lahore‑‑‑Validity‑‑‑House was used for her residence since she lived therein during days off and further her so who was a student of Medical College at Lahore also lived therein‑‑‑‑l lore than one house can be under the occupation of the assessee for' ,the purpose of his residence and exemption under Cl. 12(1) of Part I" of Second Sched. of Wealth Tax Act, 1963 was ‑allowed for `one residential house'. only‑‑‑Inspecting Assistant Commissioner was not justified in taking action under S.17B of the Wealth Tax Act, 1963 on the ground that since the assessee was posted at Faisalabad the house at Lahore was not in her occupation‑‑‑Order of the Inspecting Assistant Commissioner, was vacated and original assessment framed by the Assessing Officer was restored by the Tribunal.

Shahid Abbas for Appellant.

Muhammad Asif; D.R. for Respondent.

Date of hearing: 31st May, 2001.

ORDER

KHALID WAHEED AHMED (JUDICIAL MEMBER).‑‑‑The above six wealth tax appeals pertaining to assessment years 1994‑95 to 1999‑2000 have been filed by the assessee/appellant to assail the order, dated 20‑2‑2001 passed by I.A.C. of Income Tax and Wealth Tax Companies Zone, Range‑II, Faisalabad.

2. Learned representatives of both the parties are present and have been heard.

3. Brief facts of the case are that through the common grounds of appeal for all the years under consideration the assessee. Contests the order of IAC under section 17B of Wealth Tax Act, 1963 (hereinafter called the Act) on the issue .of exemption of self‑occupied house as unjustified: The service of show‑cause notice, dated 9‑2‑2001 has also been denied by the assessee for' the assessment years 1994‑95 and 1995‑96. The order passed under section 17B of the Act by the I.A.C. and its validity has also been challenged in the grounds of appeal as time‑barred. It is the contention of learned A.R. that the action of the I.A.C. to cancel the assessment under section 17B of the Act was unjustified. According to the learned A.R. the order passed by the Assessing Officer was neither erroneous nor prejudicial to the interest of Revenue. Learned AR further submitted that the exemption of Self- occupied/owned by the assessee was rightly allowed by the Assessing Officer. Learned A.R. further stated that the house at 8‑A Sarfraz Rafiqui Road, Lahore was under the self‑occupation of the assessee where her son studying in King Edward Medical. College was residing and further stated that she and her husband also come' and live there during off days. Learned A.R. stated that under the provision of clause 12(1) of 2nd Schedule to the Wealth Tax Act, 1963the residential house was owned and occupied by the assessee for the purpose of his own residence and the assessee had rightly opted for exclusion of this house for the wealth tax purposes. It is also the contention of learned A.R. that proceedings under section 17B initiated by, the I.A.C. are without application of mind and the action was taken on the basis of audh objection. According to learned AR such action of the I.A.C. is not maintainable under the law. Learned A.R. further submitted that the assessee may occupy more than one house for the purpose of his residence and that is why the exemption of one residential house has specifically been provided in clause 12(1) of the 2nd Schedule to the Wealth Tax Act, 1963.

4. Learned D.R. on the other hand supported the impugned order of the I.A.C. According to learned D.R. the action taken by the I.A.C. under section 17B of Wealth Tax Act, 1963 for the years under conside ration was justified because the Assessing Officer has failed to take cognizance of the fact that the assessee was employed in DHQ Hospital, Faisalabad and thus was not residing in her house at Lahore. Learned D.R: further submitted that the action of the IAC under section 17B of the Act on the basis of above information already available on record was fully justified. Learned D.R. further submitted that the proceedings were initiated by the I.A.C. after examining the assessment record and confronting the assessee by issuing notice, dated 9‑2‑2001.

5. Arguments of learned representatives of both the parties have been heard and the record has also been perused. No date of order has been /mentioned on the order of assessment framed for the assessment years 1994‑95 and 1995‑96. However, the assessee has produced copy of demand notices for the assessment years 1994‑95 and 1995‑96 whereon the dates mentioned are 17‑6‑1995 and 10‑1‑1996, whereas the combined order for the assessment years 1994‑95 to 1999‑2000 under section 17B of the Wealth Tax Act, 1963 has been passed by the IAC of Income Tax and Wealth Tax Range‑II Companies Zone, Faisalabad on 20‑2‑2001. Thus, the order under section 17B for the assessment years 1994‑95 and 1995‑96 has been passed after the time limitation of 4 years provided under section 17B of the Act which is held to be void in law being barred by time limitation.

6. With regard to assessee's claim of exemption under clause 12(1) of the 2nd Schedule to the Wealth Tax Act, 1963 the contention of learned A.R. of the assessee that the residential house situated at 8/A, Sarfraz Rafiqui Road, Lahore was under the self occupation for the purposes of her own residence also carries weight. Under the provisions of sub‑clause (1) of clause 12 of Part I of the 2nd Schedule to Wealth Tax Act, 1963 the exemption is subject to following qualifications:‑‑‑

(i) It is available in respect of one residential house only,

(ii) the house should be owned by the assessee,

(iii) the house is occupied by the assessee for the purpose of this own residence, and

(iv) the assessee opts to exclude such house from his assets.

In the instant case the residential status of the house and its ownership by the assessee are not disputed. The assessee has also opted for the exclusion of this house from her assets under Clause 12(1) of Part I of the 2nd Schedule to Wealth Tax Act, 1963. Now the only issue before us is that whether the house is self‑occupied for the purpose of own residence in terms of clause 12(1) supra. According to learned A.R. it is in her occupation and is used for her own residence and was used for her residence since she lived therein during days off and further that her son who was a student of K.E. Medical College Lahore and dependent on parents also lived therein. In our opinion more than one houses can be under the occupation of the assessee for the purposes of his residence. This finds support from the language used in the provisions of clause 12(1) itself whereby the exemption has been allowed for `one residential house' only. Under the circumstances in our opinion the I.A.C. was not justified in taking action under section 17B of the Wealth Tax Act, 1963 for the years under consideration on the ground that since she was posted at Faisalabad the house at Lahore wasnot in her occupation.

7. As a result the appeals of the assessee for all the year's are accepted. The order of the I.A.C. passed under section 17B of the Wealth Tax Act, 1963 for the assessment years 1994‑95, 1995‑96, 1996‑97, 1997‑98, 1998‑99 and 1999‑2000 is hereby vacated and the original assessments framed by the Assessing Officer are hereby restored.

C.M.A./M.A.K./183/Tax (Trib.)Appeals accepted.