(a) Income‑tax‑‑‑

‑‑‑‑Precedent‑‑‑Each enactment has its own objectives, philosophy and mechanism and decisions made under it are not binding on the functionaries working under another enactment until and unless the Legislature specifically so directs, although benefit can be derived from such decisions if the latter does not provide, arty guidance on the issues under contention.

(b) Income T~7 Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑S. 19‑‑‑Income from house property‑-‑Annual Letting Value ‑‑‑ALV assesses' by Provincial and Taxation Department under Property Tax Ac; for the purpose of levying property tax was not binding on the Assessing Officer for the purpose of income‑tax under Income Tax Ordinance, 1979.

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

‑‑‑‑S. 19‑‑‑West Pakistan Urban Immovable Property Tax Act (V of 1958), S.6‑‑‑Income from house property‑‑‑Annual Letting Value‑‑‑If the Assessing Officer suspects that the rent had been understated by the landlord with connivance of the tenant, then he could make a fair assessment of the Annual Letting Value of the property keeping ‑in view the relevant factors after discarding the rent declared.

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

‑‑‑‑Ss. 19, 20 & 21‑‑‑Income front house; property‑ Annual Letting Value‑‑‑Assessing Officer had based his assessment of income of assessee's property on the original PT‑I Forms issued by the Excise and Taxation Department whereas the First Appellate Authority had accepted assessee's appeals and directed the Assessing Officer to adopt declare6 GALV of assessee's property which was based on revised PT‑I Form issued by the said Department‑‑‑Validity‑‑‑Orders of both the officers below were vacated by the Tribunal and the matter was remanded to the Assessing Officer for de novo action with the direction to give reasonable opportunity of being hearse (4) the assessee and make fresh assessments keeping in view the provisions of law contained in Ss.19 to 21 of the Income Tax Ordinance, 1979‑‑‑Assessee should be asked to provide rent deeds or any other documents like receipts issued to the tenants in evidence of rent received‑‑‑Tenants could be contacted to verify the rent declared by the assessee‑‑‑If, there was some connivance between the assessee and the tenants, then fair estimate of ALV of assessee.'s property should be made keeping in view the market position and rent paid in respect of similar properties in the vicinity.

Ahmad Kamal, D.R. for Appellant.

Nemo for Respondent.

Date of hearing: 19th September, 2001.

ORDER

MUHAMMAD SHARIF CHAUDHRY (ACCOUNTANT MEMBER). ‑‑‑These eight appeals have been preferred by revenue against appellate order, dated 26‑5‑1996 passed by A.A.C. Appeal Range, Lahore for the years 1980‑81 to 1987‑88 under section 132 of the Income Tax Ordinance. It has been contended in the grounds of appeal that the learned AAC is not justified in ordering the Assessing Officer to accept the G.A.L.V. in all the years as declared by the assessee on the basis o: revised PT‑I Forms. It has been further contended that the learned A.A.C,, has also erred in allowing collection charges and property tax as deduction whereas the assessee had failed to produce documentary evidence in support of these claims.

2. Appellant's D.R. is present who has been heard and available records have been perused. None appeared for the assessee‑respondent who is, therefore, proceeded ex parte under Rule 20(3) of the I.T.A T. Rules of 1981.

3. We have gone through the assessment order of the I.T.O. and the impugned appellate order of the learned A.A.C. The I.T.O. has based his assessment of income of assessee's property on the original PT‑I Forms issued by the Excise and Taxation Department whereas the A.A.C. has accepted assessee's appeals and directed the I.T.O. to adopt declared G.A.L.V. of assessee's property which is based on revised PT‑1 Forms issued by the said department. Thus both the officers, I.T.O. as well as the A.A.C., who are functioning under Income Tax Ordinance of 1979, have entirely depended on the A.L.V. determined by Provincial Excise and Taxation Department for the purpose of levying property tax under Property Tax Act,as if decisions made by the latter department were binding on them.

Each enactment has its own objectives, philosophy and mechanism and decisions made under it are not binding on the functionaries working under another enactment until and unless the Legislature specifically so directs, although benefit can be derived from such decisions if the latter does not provide any guidance on the issues under contention. Thus, the A.L.V. assessed by Provincial and Taxation Department under Property Tax Act for the purpose of levying property tax is not binding on the I.T.O. for the purpose of income‑tax under Income Tax Ordinance of 1979.

Income Tax Authorities have to work within four corners of Income Tax Ordinance of 1979 which in itself provides a self‑sufficient legal code for computation of income and tax. Under the Income Tax Ordinance of 1979 income from property has to be computed under section 19 on the basis of annual value‑ of such property. Annual value, according to clause (b) of subsection (2) of section 19, is deemed to be the sum for which the property might reasonably be expected to let from year to year. Actual rent received by an assessee from his tenant plays pivotal role in determining annual value of the let out property for the purpose of computation of income. This is established by the fact that proviso to subsection (2) of section 19 provides that annual value shall not be less than rent payable by the tenant while clauses (h) and (i) of subsection (1) of section 20 envisage allowances for vacancies and unrealized rent. However, if the Assessing Officer suspects that the rent has been understated by the landlord with connivance of the tenant, then he can make a fair assessment of the A.L.V. of the property keeping in view the relevant factors after discarding the rent declared.

But in the instant case we find that the Assessing Officer as well as the first Appellate Authority have not applied their mind but have simply relied or the ALV assessed by Provincial Excise and Taxation Department in PT‑I Form. They have not made any effort to ascertain the actual rent received by the assessee for letting out his property. Even the particulars of property and the number of shops etc. rented out is not forthcoming. Hence the orders passed by these authorities are not sustainable.

4. In view of the foregoing discussion it would meet the ends of justice if the orders of both the officers below are vacated and the matter is remanded back to the Assessing Officer for de novo action. The Assessing Officer is directed to give reasonable opportunity of being heard to the assessee and make fresh assessments keeping in view the provisions of law contained in sections 19 to 21 of Income Tax Ordinance of 1979 etc. Number of shops owned lay the assessee and let out by him on rent should be determined. He should ask the assessee to provide rent deeds or any other documents like receipts issued to the tenants in evidence of rent received. If possible, tenants can be contacted to verify the rent declared by the assessee. In case it is suspected that the rent declared by the assessee is grossly understated and tenants cannot be contacted or there is some connivance between the assessee and the tenants, then fair estimate of ALV of assessee's property should be made keeping in view the market position and rent paid in respect of similar properties in the vicinity.

5. The impugned appellate order on the issue of allowance of property tax and collection charges is justified which calls for no interference.

6. Consequently appeals filed by the Revenue partly succeed in the manner and to the extent indicated above. '

C.M.A./M.A.K./185/Tax (Trib.)????????????????????????????????????????????? Appeals partly succeeded.