I.T.As. Nos. 6625/LB, 6625-A/LB and 6625-B/LB of 1996, decided on 3rd May, 2002. VS I.T.As. Nos. 6625/LB, 6625-A/LB and 6625-B/LB of 1996, decided on 3rd May, 2002., 2003 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 128 (2002)

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

‑‑‑‑S.59(1)(3)‑‑‑Self‑Assessment‑‑‑Assessment order in writing‑‑‑IT‑30 Form‑‑‑Return of income had been filed under the Scheme of Self -Assessment which qualified to be processed under the said Scheme without requiring any adjustment under S.59(3) of the Income Tax Ordinance, 1979 or otherwise, the returned income was accepted in toto as the assessed income, the requirement of an assessment order in writing were sufficiently fulfilled by preparation of a tax computation sheet in the manner described in the prescribed IT‑30 Form duly signed by the Assessing Officer‑‑‑Such an order under S.59(1) of the Income Tax Ordinance, 1979 was properly made by the Assessing Officer for the relevant year.

1998 PTD (Trib.) 3718 rel.

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

‑‑‑Ss. 62, 63 & 59(1)‑Assessment on production of accounts evidence etc.‑‑‑Order in writing‑‑‑IT‑30 Form‑‑‑Provisions of S.59(1) of the Income Tax Ordinance, 1979 were not at par with the provisions of normal assessment to be made under Ss.62 or 63 of the Income Tax Ordinance, 1979 or in any other provision of the Income Tax Ordinance, 1979 were passing of an order in writing otherwise than in S.59(1) of the Income Tax Ordinance, 1979, had been mentioned‑‑‑In all these provisions passing' of an "order in writing" was a statutory obligation which was to, be complied with and in absence thereof IT‑30 Form coupled with it notice of demand to be issued under S.85 of the Income Tax Ordinance, 1979 could not take place of an "order in writing"‑‑‑In no way IT‑30 Form implies application of mind but was rather a mechanical sheet wherein "fill in the blanks" were to be made‑‑‑Appellate Tribunal held that mere making "fill in the blanks" or incorporating a few data in the IT‑30 Form was not sufficient to satisfy statutory requirements of an order in writing to be made under S. 62 or 63 of the Income Tax Ordinance, 1979 and in absence of a formal order of assessment, the amount of tax sought to be realized was illegal‑‑‑IT‑30 Form and the demand notice could not be equated with the passing of an assessment order in writing as was envisage under S. 62 or 63 of the Income Tax Ordinance, 1979 and as su0a no order could be solicited to exist for the relevant assessment year.

1992 PTD 347; 19817 PTD 249 rel.

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

‑‑‑‑S.63‑‑‑Best judgment assessment ‑‑‑C.B.R. Letter No.C.7(22) DTO- I/94, dated 19‑10‑1990‑‑‑Absence of assessment order‑‑‑Declared income was accepted by the First Appellate Authority on the ground that in absence of passing of any assessment order; there appeared to be no objective basis to the assessment as framed in the year under appeal‑‑ Validity‑‑‑Since no formal assessment order in terms of S.63 of the Income Tax Ordinance, 1979 had been passed‑by the Assessing Officer, there was no tax liability of assessee to be complied with‑‑‑Appeal Commissioner had rightly ordered acceptance of the declared income for all the years under appeal‑‑‑Departmental appeals failed and were dismissed being bereft of any merit by the Appellate Tribunal.

1992 PTD 347; 1987 PTD 249 rel.

Memo for Appellant.

Muhammad Asif for Respondent.

Date of hearing: 26th April, 2002.

ORDER

Vide these three appeals the Department has assailed the consolidated order rendered by learned CIT(A) Zone‑IV, Lahore dated 15‑7‑1996 whereby he has accepted the declared income in respect of the assessment years 1992‑93 to 1994‑95 on the ground that in‑ absence of passing any assessment order, there appears to be no .objective basis to the assessment as framed in the year under appeal.

2. None prosecuted on behalf of the department to substantiate the grounds of appeal while the learned A.R. of the assessee supported the impugned order for the reasons stated therein. The learned A.R. however, filed before me a circular Letter of C.B.R. No.C.7(22)DTO- I/94, dated October 19, 1994 wherein it was stated that passing of an assessment order is must. Affidavit of the assessee has also been filed to substantiate the contention that the business premises remained closed in these assessment years.

3. What happened in this case was that an ex parte assessment was made by resort to section 63 of the Income Tax Ordinance, 1979. But no formal order in terms of section 63 was passed. Rather a computerized IT‑30‑A Form and a notice of demand under section 85 of the Income Tax Ordinance, 1979 were got served upon the assessee. Whereas section 63 of the Income Tax Ordinance, 1979 manifestly converses that where any person has failed to furnish a return of total income required to be furnished by him under sections 56, 72(3) or 81(3) of the Income Tax Ordinance, 1979 or failed to comply with any of the terms of a notice issued under section 58 or 61 of the Income Tax Ordinance, 1979 the Deputy Commissioner may by an order in writing assess the total income of the assessee to the 'best of his judgment and determine the amount of tax payable by him. The significant words used in this section are that total income shall be assessed by the Deputy Commissioner by an order in writing to the best of his judgment". So, to deliver best judgment application of mind by the D.C.I.T. is the precondition and to do so passing of an order in writing how small that may be is sine qua non.

4. I of my own remind that this Tribunal in a Full Bench judgment cited as 1998 PTD (Trib.) 3718 has held that IT‑30 Form and demand notice is a substitute of the assessment order but it is imperative to note that decision in that judgment rests on altogether different set of facts. In this Full Bench judgment it has been so held where a return of income has been filed under the Scheme of Self‑Assessment and which qualified to be processed under the said scheme without requiring any adjustment under section 59(3) of the Income Tax Ordinance, 1979 or otherwise so that the returned income is accepted in toto as the assessed income, the requirement of an assessment order in writing are sufficiently fulfilled by preparation of a tax computation sheet in the manner described in the prescribed IT‑30 Form duly signed by the Assessing Officer and such an order under section 59(1) can be held to have been properly made by the Assessing Officer for the relevant year.

But the provisions of section 59(1) are not at par with the provisions of normal assessment to be made under section 62 or 63 of the Income Tax Ordinance, 1979 or in any other sections of the Income Tax Ordinance, 1979 where passing of an order in writing otherwise than in section 59(l) has been mentioned. In all these sections passing of an "order in writing" is a statutory obligation which is to be complied with and in absence thereof IT‑30 Form coupled with it notice of demand to be issued under section 85 of the Income Tax Ordinance, 1979 cannot take place of that of an "order in writing". In no way IT‑30 Form implies application of mind. It is rather a mechanical sheet wherein fill in the blanks are to be made. In view of foregoing discussion I hold that mere making fill in the blanks or incorporating a few data in the IT‑30 Form is not sufficient to satisfy statutory requirements of an order in writing to be made under section 62 or 63 of the Income Tax Ordinance, 1979 and in absence of a formal order of assessment the amount of tax sought to be realized is illegal. I, therefore, hold that IT‑30 Form and the demand notice cannot be equated with the passing of an assessment order in writing as is envisaged under section 62 or 63 of the Income Tax Ordinance, 1979 and as such no order could be solicited to exist for the relevant assessment year. In this regard principle and ratio has been accrued from the case‑law cited as 1992 PTD 347 (SC Pak) and 1987 PTD 249 (Kar. HC) and 1987 PTD (Trib.) (sic).

5. Reverting to the facts of the instant case since no formal assessment order in terms of section 63 of the Income Tax Ordinance, 1979 has been passed by the D.C.I.T., therefore, there was no tax liability of the assessee to be complied with. In this view of the matter, the Appeal Commissioner has rightly ordered acceptance of the declared income for all the three years under appeal.

6. In the result, the departmental appeals fail and are dismissed being bereft of any merit.

C.M.A./529/Tax(Trib.)Appeals dismissed.