COMMISSIONER OF INCOME- TAX/WEALTH TAX, LAHORE ZONE-B, LAHORE VS NOOR TRADING COMPANY, PATTOKI
2002 P T D 1560
[Lahore High Court]
Before Naseem Sikandar and Muhammad Sair Ali, JJ.
COMMISSIONER OF INCOME- TAX/WEALTH TAX, LAHORE ZONE-B, LAHORE
versus
Messrs NOOR TRADING COMPANY, PATTOKI
I.T.A- No. 188 of 1998, derided on 18th February, 2000.
(a) Income Tax Ordinance (XXXI of 1979)--- ----Ss.59, 61. 65 & 136(1)---Central Board of Revenue Circular No.9, dated 1-7-1993, para. l(i)---Appeal----Self-Assessment Scheme ---Re opening of case---Assessment under Self-Assessment Scheme was not accepted by the Income-tax Authorities and notice under S.61 of the Income Tax Ordinance, 1979, was issued to the assessee---Contention of the assessee was that his return filed under the Self-Assessment Scheme was immune from scrutiny-.--Income-tax Authorities did not accept the contention of the assessee and selection of case for process under normal law was maintained---Income-tax Tribunal allowed appeal filed by the assessee---Validity---Claim of the assessee that he was entitled to the benefit of immunity clause by returning 15% increase in the tax was not questioned by the Authorities either before the Appellate Authority or before the Tribunal---Assessing Officer as well as the Appellate Authority avoided to record any finding on the claim of immunity as preferred by the assessee---High Court expressed its distress on the conduct-of the Revenue to first hold out a promise and then to attempt circumventing the same after the assessee had completed/fulfilled the requirements for enjoying the declared concession---Whether a return had qualified or had not qualified for acceptance under Self-Assessment Scheme, generally would not give rise to a question of law---Appeal was dismissed in limine.
(b) Income Tax Ordinance (XXXI of 1979)---
----S.59---Self-Assessment Scheme---Object and scope---Immunity clause in any fiscal statute or a similar concession in the rules framed thereunder, is an expression of helplessness on the part of the Revenue to tap the pilferage---Once the helplessness is so declared in the form of an immunity clause under an Act or a rule then in all fairness the Revenue must accept the reality---Revenue should allow the benefit/concession wherever sought to be availed by a subject, on fulfillment of due requirements---Will be a very bad expression of frustration if the Revenue declaring a concession should attempt to circumvent the immunity clause in order to catch a fish which it had failed to lay its hands upon and which was lored on the bate of promise to concede part of the Revenue it had swallowed and digested.
Muhammad Ilyas Khan for Appellant.
ORDER
NASEEM SIKANDAR, J.---The Revenue through this Income- tax Appeal under section 136(1) (since amended) of the Income Tax Ordinance, 1979 claims that following questions of law have arisen out of an order of the Income-tax Appellate Tribunal, Lahore Bench recorded on 3-3-1998.
Questions:
(a)Whether under the circut4stances and facts of the case, the learned Income-tax Appellate Tribunal was justified to accept the appeal of the assessee treating the case under immunity without recording any reason or any support of it?
(b)Whether the order of the Income-tax Appellate Tribunal is operative when he has himself opened the gateway to proceed according to its observation, re-open the case under section 65 of the Income Tax Ordinance, 1979 after making the assessment under immunity?
(c)Whether the Income Tax Appellate Tribunal was justified to reverse the orders of forums below without giving the reasons and contentions raised therein?
2. The respondent, an AOP, an assessee of the Income-tax Department returned total income for the year 1993-94 at Rs.1,13,163. The return so filed under Self-Assessment Scheme was picked for detailed scrutiny with reference to para. 1(i) of C.B.R.'s Circular No.9, dated 1-7-1993.
3. The issuance of notice under section 61 thereafter was resisted by the assessee on the ground that the return filed by it was im4lune from scrutiny and, therefore, the Assessing Officer could not pick up the same for process under" normal law. The assertion was, however, rejected by the Assessing Officer who proceed to frame a regular assessment after usual proceedings at net income of Rs.11,71,275.
4. Learned First Appellate Authority partially allowed relief in computation of income but selection of case for process under normal lave was maintained.
5. On further appeal, by way of impugned order a Division Bench of the learned Tribunal allowed the contentions put forth before it. It was that the case of the assessee having fulfilled the requirements of immunity clause the return filed could not have been taken up for process under the normal law. The most important condition for immunity alleged to have been fulfilled being 15 % increase in the tax in accordance with the Circular No.2 of 1994. Therefore, in the view of the Tribunal, the return filed by the assessee could not haves been taken up for process under normal law. Instead, the Assessing Officer after first accepting the return under immunity clause could proceed only to re-open the same by resort to provisions of section 95 of the Income Tax Ordinance, 1979. Hence this further appeal.
6. After hearing learned counsel for the Revenue we are not persuaded to agree that any of the aforesaid questions as framed does arise out of the order of the Tribunal. It will be noted that in the very first opportunity, in reply to the notice under section 61 of the Income Tax Ordinance the assessee put up a claim that its return was immune from scrutiny. The Assessing Officer even after noting the objection did not set up a case now being attempted to be set up by the Revenue. It is that the return filed did not fulfill the requirements of the immunity clause as given in the circular. Even before the First Appellate Authority and then the Tribunal the claim of the assessee to be entitled to the benefit of immunity clause by returning, 15 % increase in the tax was never questioned by Revenue.
7. Therefore, in the given situation we are of the view that the Assessing Officer as well as the First Appellate Authority purposely avoided to record any finding on the claim of immunity as preferred by the assessee. It appears unfortunate on the part of the. Revenue to first hold out a promise and then to attempt circumventing the same after a subject had completed/fulfilled the requirements to enjoy the declared concession. Obviously an assessee, in most cases opts to come for immunity clause by offering only a part of the income that he wishes to keep away from the eye of Revenue. In fact the immunity clause in any fiscal statute or a similar concession in the rules framed thereunder is an expression of helplessness on the part of the Revenue to tap the pilferage. However, once the helplessness is so declared in the form of an immunity clause under an Act or a Rule then in all fairness the Revenue must accept the reality. It should allow the benefit/concession wherever sought to be availed by a subject on fulfillment of due requirements. It will be a very bad expression of frustration if the Revenue on declaring a concession should attempt to circumvent the immunity clause in order to catch a fish which it had failed to lay its hands upon and which was lured on the bate of promise to concede part of the Revenue it had swallowed and digested.
8. Secondly, it has been our consistent view as expressed in a number of tax references and petitions in Constitutional jurisdiction that) the issue if a return qualified (or did not qualify) for acceptance under Self-Assessment Scheme generally does not give rise to a question of law.
9. The situation in the present case being not very different, this further appeal shall be dismissed in limine.
Q.M.H./M.A.K./C-146/L
Appeal dismissed.