I.T.AS. NOS.966/KB AND 967/KB OF 2000-01, DECIDED ON 10TH NOVEMBER, 2001. VS I.T.AS. NOS.966/KB AND 967/KB OF 2000-01, DECIDED ON 10TH NOVEMBER, 2001.
2002 P T D (Trib.) 710
[Income‑tax Appellate Tribunal Pakistan]
Before Inam Ellahi Sheikh, Chairman and
Munsif Khan Minhas, Judicial Member
I.T.As. Nos.966/KB and 967/KB of 2000‑01, decided on /01/.
th
November, 2001. (a) Income Tax Ordinance (XXXI of 1979)‑‑‑
‑‑‑‑Ss. 66‑A, 80‑C, 143‑B & 59‑A‑‑‑Power of Inspecting Additional Commissioner to revise. Deputy Commissioner's order‑‑‑Statement under S. 143‑B of Income Tax Ordinance, 1979 was filed‑‑‑IT‑30 and notice of nil demand was issued under S.59‑A of the Income Tax Ordinance, 1979‑‑‑.No source for investment for purchase of plot, vehicle and bungalow was explained by the assessee‑‑‑Inspecting Additional Commissioner cancelled the assessment ‑‑‑Assessee contended that invoking of provisions of S.66‑A of the Income Tax Ordinance, 1979 was wrong as there was no order in‑ the field‑‑‑Assessment could be made only on the basis of .return filed and, in the present case no return had been filed and order made was invalid which could not be cancelled‑‑‑Validity‑‑‑Inspecting Additional Commissioner had proposed to cancel the order passed under S.59‑A of the Income Tax Ordinance, 1979 whereas in fact there was no such order‑Inspecting Additional Commissioner had proceeded on the basis of presumptive provision in S.80‑C of the income Tax Ordinance, 1979 which provides that an order under S.59‑A shall be deemed to have been passed and such order could not be equated with an actual order for invoking jurisdiction under S.66‑A of the Income Tax Ordinance, 1979‑Order of the Inspecting Additional Commissioner was cancelled by the Tribunal in the circumstances.
2000 PTD 2193 and 1998 PTD 1201 rel.
(b) Income Tax Ordinance (XXXI of 1979)‑‑‑
‑‑‑‑S. 66‑A‑‑‑Power 'of Inspecting Additional Commissioner to revise Deputy Commissioner's order‑‑‑Evasion of tax‑‑‑Disregard of provision of law‑‑‑Evasion or any lapse on the part of the assessee did not provide licence to the Inspecting Additional Commissioner to disregard the provisions of law.
Muhammad Mehtab Khan for Appellant.
Syed Riazuddin, D.R. for Respondent.
Date of hearing: 6th November, 2001.
ORDER
INAM ELLAHI SHEIKH (CHAIRMAN). ‑‑‑By this consolidated order we proceed to decide two appeals of an income‑tax assessee against two separate orders of the learned I.A.C. of Income‑tax, Range‑II, Zone‑A, Karachi both, dated 12‑12‑2000 recorded under section 66‑A of the Income Tax Ordinance, 1979 (hereinafter called ‑ the 1979 Ordinance).
2. The relevant facts in brief are that the assessee derived income from import and supply business and. no return, was filed for the two years under consideration. The income was taxable under section 80C of the 1979 Ordinance and the statement under section 143‑B of the 1979 Ordinance was filed. However, it appears that the Assessing Officer also issued IT‑30 under section‑'143‑B of the 1979 Ordinance and notice of demand in these two years. In the assessment year 1997‑98 an order under section 59‑A of the 1979 Ordinance was also issued on 24‑12‑1998. However, no demand was created. On perusal of the assessment record, the learned I.A.C. found that the assessee had purchased a plot for Rs.45,000 and vehicle for Rs.3,01,552 in the assessment year 1996‑97 whereas in the assessment year 1997‑98 a Bungalow had been purchased for, a declared value of Rs.3.4 million. On perusal of the record the learned I.A.C: concluded that the assessee did not have sufficient sources to make these investments and he confronted the assessee under section 66‑A of the 1979 Ordinance by issuing the show‑cause notice. It was proposed to cancel the assessment orders `finalized under section 59‑A of the 1979 Ordinance by the Assistant Commissioner of Income‑tax, Circle A‑5, Zone‑A, Karachi in both the years by separate notices: The assessee failed to file any explanation despite the fact that adjournment was allowed. The learned I.A.C., therefore, proceeded to cancel the `assessments' in both the years in the following manner:‑‑
"In view of the above the assessment order passed under section 59(1) for the assessment year 1999‑2000 is hereby cancelled being erroneous as well‑ as prejudicial to the interest of Revenue. The Assessing Officer is directed to complete the assessment under normal law."
3. The learned counsel of the assessee has strongly attacked the order of the learned I.A.C. with the submission that the learned I.A.C. was wrong in invoking the provisions of section 66‑A of the 1979 Ordinance, as there was no order in the field, which could be cancelled. The learned counsel agreed that the assessee's income was taxable under section 80‑C of the 1979 Ordinance and thus the assessee has filed the statement under section 143‑B of the 1979 Ordinance whereas no return was filed in these two years emphasized it. It was submitted by the learned counsel that an assessment under section 59‑A of the 1979 Ordinance could be made only on the basis of a return filed by the assessee and in the present case no return had been filed. The learned counsel of the assessee has relied upon two decisions of the Tribunal reported as 2000 PTD 2193 and 1998 PTD 1201 to support his contention. As regards the assessment order under section 59‑A of the 1979 Ordinance in the assessment year 1997‑98, it was submitted by the learned counsel for the assessee that such order was an invalid order and could not be cancelled by the learned I.A.C. The learned D.R. on the other hand supported the order of the learned I.A.C. with the submission that the facts of the parallel cases relied upon by the learned counsel were different.
4. We have considered the submissions of both the parties and we have also perused the relevant orders. The case‑law relied upon by the learned counsel of the assessee/appellant has also been considered. This appears to be a case where the learned I.A.C. has discovered certain information, which he considers to be useful, and he thinks that the assessee has evaded the tax. However, even if there was any evasion on the part of the assessee or even there was any lapse on the part of the assessee, this did not provide licence to the learned I.A.C. to disregard the provisions of law. Not only the learned I.A.C. has not proceeded according to the law, but he has also adopted a very casual approach in this matter. The operating paragraph of the order of the learned I.A.C. already been reproduced above which is common in both the years. In both the years he has cancelled the assessment orders passed under section 59(1) of the 1979 Ordinance for the assessment year 1999‑2000 whereas in the opening part of the orders he has attacked the order passed under section 59A of the 1979 Ordinance. The plea of the learned D.R. is that this is typing error. It may be so. Nevertheless an officer of rank of I. A. C. is required to be more careful. Another instance of the casual attitude of the learned I.A.C. that at the top of the order under section 66‑A of the 1979 Ordinance he has described his office as office of the Inspecting Assistant Commissioner, Range‑II, Zone‑A, Karachi' whereas while signing the order he has described himself as `Inspecting Additional Commissioner of Income‑tax, Range‑II, Zone‑A, Karachi.
5. Now coming to the real issues, we find a lot of substance in the arguments of the learned counsel of the assessee. The learned I.A.C. has proposed to cancel the order passed under section 59‑A of the 1979 Ordinance whereas in fact there was no such order in the assessment year 1996‑97. It appears that the learned I.A.C. has proceeded on the basis of a presumptive provision in section 80‑C of the 1979 Ordinance which says that an order under section 59‑A shall be deemed to have been passed. We are afraid that a deemed order cannot be equated with an actual order for invoking jurisdiction of section 66‑A of the 1979 Ordinance. In the case reported as 1998 PTD 1201 (supra) it has been clearly held that any assessment made by the Assessing Officer in such circumstances would be without jurisdiction. If the department does come across any cases on evasion where presumptive tax regime has been applied, certainly some other provisions of the law can be invoked. However, that would require a proper application of mind by the I Revenue Officers. Hence we are inclined to accept these two appeals of the assessee and cancel the orders of the learned I.A.C. The appeals succeed accordingly.
C.M.A./M.A.K./189/Tax (Trib.) ???????????????????????????????????????????????????????? Appeals accepted.