I.T.As. Nos. 498/KB to 501/KB of 2002, decided on 5th May, 2003. VS I.T.As. Nos. 498/KB to 501/KB of 2002, decided on 5th May, 2003., 2003 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2567 (2003)

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

‑‑‑‑Ss. 65, 55 & 80B‑‑‑Additional assessment‑‑‑Return of total income‑‑ Presumptive income‑‑‑Non‑declaration of presumptive income in return‑ Re‑opening of assessment‑‑‑Validity‑Income covered through presumptive taxation had to be declared in the return required to be filed under S.55 of the Income Tax Ordinance, 1979 by an assessee who had income from sources other than those covered by the presumptive taxation‑‑‑Even if it was presumed that provisions of S.80B of the Income Tax Ordinance, 1979 were applicable to the interest received by the assessee from the company, even then the forms of the returns submitted by the assessee did not show the correct income to be declared legally because income said to be chargeable to tax under S.80B of the Income Tax Ordinance, 1979 had never been included in the returns submitted under S.55 of the Income Tax Ordinance, 1979 ‑‑‑ Returns having not been correctly verified and some source of income which were required to be declared in the return were not so declared, case was fit for proceeding under S.65 of the Income Tax Ordinance, 1979.

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

‑‑‑‑Ss. 65, 59(1), 50(7D), 80B & 143B‑‑‑Additional assessment‑‑‑Change of opinion‑‑‑Interest income was declared under presumptive tax regime by making payment alongwith return under S.55 of the Income Tax Ordinance, 1979‑‑‑Assessment was completed under S.59 (1) of the Income Tax Ordinance, 1979‑‑‑Re‑opening of assessment ‑‑‑Validity‑‑ Where assessment had been completed under S.59(1) of the Income Tax Ordinance, 1979, there was no occasion with the Assessing Officer to have given any opinion on the issue as to whether the interest income was rightly declared to be so chargeable under S.80B of the Income Tax Ordinance, 1979 or not‑‑‑Even if it is held that the assessee had incorrectly declared interest to be an amount covered under S.80B(1) of the Income Tax Ordinance, 1979, and it was so accepted by the Assessing Officer, then the provisions of S.65 of the Income Tax Ordinance, 1979 would become applicable as the Assessing Officer was led to believe what was not correct‑‑‑Where the amount of interest received was accepted as chargeable under S.80B of the Income Tax Ordinance, 1979 without making any investigation, that acceptance was perverse on the basis of facts on record as the amount of interest received was not an amount as mentioned in S.80B of the Income Tax Ordinance, 1979 since neither tax was deductible nor actually deducted under S.50(7D) of the Income Tax Ordinance, 1979 and by making cash payments, and mala fide submitting the statement purported to be a statement under S. 143B of the Income Tax Ordinance, 1979, the assessee led the Assessing Officer to arrive at a perverse opinion and even then the provisions of S.65 of the Income Tax Ordinance, 1979 would be legally attracted.

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

‑‑‑‑Ss. 65 & 143B‑‑‑Additional assessment‑‑‑Interest income‑‑‑Filing of statement in the garb of a statement under S.143B of the Income Tax Ordinance, 1979 declaring receipt of the interest legally and factually incorrect leading the Assessing Officer to acceptance of the said statement at its face which amounted to an opinion or view which was perverse in law and on facts‑‑‑Action under S.65 of the Income Tax Ordinance, 1979 was correctly taken by the Assessing Officer.

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

‑‑‑‑Ss. 65, 59(1), 50(7D), 80B & 143‑B‑‑‑Additional assessment‑‑‑Salary income‑‑‑Interest income on the loan advance to company‑‑‑Return was filed declaring only salary, income‑‑‑Statements under S. 143‑B of the Income Tax Ordinance, 1979 were filed showing interest income, claiming that 10% of the interest income had been deducted by the Company as tax and deposited which had been accepted‑‑‑Later on assessments had been reopened under S.65 of the Income Tax Ordinance, 1979 on the ground that assessee had been assessed at too low a rate because the interest income had incorrectly been subjected to lower rate of tax at 10% of the Income, treating same to be of the nature on which provisions of S.80B of the Income Tax Ordinance, 1979 were applicable although the same were not applicable‑‑‑Validity‑‑‑Action under S.65 of the Income Tax Ordinance, 1979 had rightly been taken by the Assessing Officer because charge of tax under S.80B of the Income Tax Ordinance, 1979 was perverse to which he was led due to filing of a statement purported to be a statement under S.143B falsely indicating that tax had been withheld under S.50(7D) of the Income Tax Ordinance, 1979, although the Company had not withheld any tax and rightly so because in respect of this account or deposit pertaining to the loan no instrument had been issued by the Company and thus S.50(7D) of the Income Tax Ordinance, 1979 was not applicable and the assessee having failed to declare total income from all sources computable under the provisions of the Income Tax Ordinance, 1979 in the return of income filed under S.55 of the Income Tax Ordinance, 1979 had concealed particulars of income and therefore, had made himself liable to action under S.65 of the Income Tax Ordinance, 1979 upon proper appreciation of the information contained in the statement submitted by him in the garb of the statement under S. 143B of the Income Tax Ordinance, 1979‑‑‑Appeal of the assessee was rejected by the Appellate Tribunal.

National Beverages (Pvt.) Ltd. 2001 PTD 633; S.M. Abdullah v. CIT (1966) 14 Tax 161 and H.M. Abdullah v. The I.T.O. 1991 PTD 217 ref.

1997 SCMR 1256 and 2002 PTD (Trib.) 303 distinguished.

Rehan Hassan Naqvi and Ms. Lubna Pervaiz for Appellant.

Inayatullah Kashani, D.R. for Respondent.

Date of hearing: 3rd May, 2003.

ORDER

MUHAMMAD AKHTAR NAZAR MIAN (ACCOUNTANT MEMBER).‑‑‑The appellant has submitted appeals for the assessment years 1996‑97 to 1999‑2000 which impugn the Combined Order Nos.33 to 36 made by the Commissioner of Income Tax (Appeals) Zone‑1, Karachi on 16‑1‑2002 while deciding appeals against the orders passed by the Assessing Officer under section 65 of the Income Tax Ordinance, 1979 (hereinafter called the Ordinance). Action under section 65 of the Ordinance as confirmed by the learned CIT(A) is contested as erroneous and bad in law and on facts. Representatives of both the parties have been heard and orders of the authorities below perused.

2. The relevant facts emanating from orders of the authorities below and as described by the learned representatives are that the appellant in the relevant years under appeal had income from two sources i.e. salary as Director of Pakistan Packages (Pvt.) Ltd. and interest on loan advanced to the said company. In all the years, returns of income were filed in the prescribed form declaring only salary, as the source of income and statements under section 143‑B of the Ordinance were riled showing the interest income, claiming therein that 10% of the interest income had been deducted by the Company as tax and deposited. The Assessing Officer had originally completed assessments by accepting as declared, the statement sunder section 143‑B of the Ordinance treating the tax shown to have been deducted and deposited as final discharge of lax liability and also completing assessments under section 59(1) on salary income for the assessment years 1996‑97 and 1999‑2000. For the assessment years 1997‑98 and 1998‑99 assessment order was passed under section 62 of the Ordinance whereunder the salary income was accepted as 'such and tax at the rate of 10% on interest was accepted as final discharge of tax liability, as declared by the appellant in the statement under section 143‑B of the Ordinance.

3. Later on the Assessing Officer found that income of the appellant had been assessed at too low a rate because the interest income had incorrectly been subjected to lower rate of tax at 10% of the income, treating it to be of the nature on which provisions of section 80B were applicable although the said provisions of section 80B were not applicable in the instant case (as will be discussed later) and the position as declared by the appellant had thus not been accepted correctly by the Department by passing original order under section 59(1) or under section 62. The Assessing Officer was of the opinion that whereas for the assessment years 1996‑97 and 1999‑2000 (where assessments were made under section 59(1) of the Ordinance) no conscious decision was made about applicability of section 80B, to the interest income, the provisions of section 80B were held to be applicable in the assessment years 1997‑98 and 1998‑99 (where assessments were made under section 62 of. the Ordinance), due to incorrect information submitted by the appellant in the statement under section 143B indicating that the tax had been deducted under section 50(7D) although no such tax had been deducted by the company at the time of payment of the interest and the tax was actually paid. by the appellant herself before submitting the statement under section 143B, notwithstanding that on the interest income received from the company, provisions of section 50(7D) were not applicable (as discussed later by us) and the Assessing Officer was led to applicability of section 80B to the facts of the case only because these were incorrectly stated by submitting statement under section 143B of the Ordinance. The Assessing Officer held the opinion that where certain facts although available on record (i.e. the purported statement under section 143B of the Ordinance) were not considered consciously by the Assessing Officer while making the original assessments under section 59(1) of the Ordinance, or where the facts were concealed with mala fide intention during the original assessments (as in the orders made under section 62), the assessments could be re‑opened under section 65 of the Ordinance as held by the Hon'ble Sindh High Court in the case of National Beverages (Pvt.) Ltd., reported as 2001 PTD 633, which principle stands upheld by the Supreme Court of .Pakistan where leave to appeal against the said judgment of the Hon'ble Sindh High Court was not allowed. The assessments were accordingly re‑opened by the Assessing Officer under section 65 of the Ordinance and completed thereafter by charging tax at normal rates on determining total income after including interest income into the salary income. This treatment has been confirmed by the learned CIT(A).

4. The learned A.R. has argued that the principle laid down by the Hon'ble High Court regarding re‑opening of assessments in the case of National Beverages (Pvt.) Ltd., could no more be relied upon because on hearing appeal by august Supreme Court of Pakistan against the judgment, dated 22‑2‑2000 of the Hon'ble High Court of Sindh Karachi passed in C.P. No.D‑1831 of 1998, the learned counsel for the petitioner after giving arguments had "submitted that the petitioner would be satisfied if a direction is given to the concerned Income Tax Officer to look into all the documents which may be placed before him" and the august Court had ordered "that all the material which is brought before the concerned Income Tax Officer may be examined afresh, without being influenced by any order passed earlier in this regard. Thereafter the fate of said notice be decided strictly in accordance with law and the petition was thus disposed of".

5. In the present case, according to the learned A.R. notices under section 65 of the Ordinance were issued when no definite information had come into the possession of the Assessing Officer because the information in the form of statements under section 143B was already available on record. He further submits without conceding that presuming the interest received by the appellant was incorrectly subjected to the rate of tax prescribed under section 80B, this would still be a case of change of opinion and therefore, provisions of section 65 of the Ordinance would be ousted. In his support he has cited a case reported as 1996 SCMR 1256. Further it is submitted by the learned A.R. that in the circumstances similar to those as in this case, interest received from the company was held to be liable to deduction of tax under section 50(7D) of the Ordinance and therefore, liable to be charged to tax at the rate of 10% of profit as is applicable to amounts mentioned in section 80B of the Ordinance. Therefore, according to the learned A.R. the matter relating to proceedings under section 65 of the Ordinance pertained not only to change of opinion but also to incorrect appreciation of facts by the succeeding Assessing Officer because the treatment given by the Assessing Officer while framing original assessments by charging tax on interest income as an amount to which provisions of section 80B were, applicable was correct appreciation of facts. In support thereof he has cited a case reported as 2002 PTD (Trib.) 303.

6. The learned D.R. on his turn states that the Assessing Officer is authorized under law to re‑open a question if it is established that the previous opinion on the said. question was arrived at without any investigation or that the said opinion was perverse. In this connection he has cited the case of S.M. Abdullah v. CIT decided by the Karachi High Court and reported as (1966) 14 Tax 161. The learned D.R. further states that in the case of H.M. Abdullah v. The ITO reported as 1991 PTD 217, the Sindh High Court while disposing the Constitutional Petition No.340‑D of 1988 had held that "it is well‑settled that on the basis of change of opinion action under section 65 cannot be initiated. However, in cases where assessment order has been passed without investigation into the correctness of the return filed by the assessee without applying the mind and the assessment order is not a conscious order passed by him, the question of change of opinion will not arise. The change of opinion arises only when there exists the opinion expressed by the Assessing Officer in regard to the controversy or matter under consideration. If no opinion has been expressed earlier, the question of change of opinion will not arise". The learned D.R. submits that when the original orders of the Assessing Officer (whether made under section 59(1) or 62 of the Ordinance) are examined with these principles in view, there can be no second opinion that the interest income declared under section 143B was accepted as such and charged to tax as an amount to which section 80B was applicable and this was so done only on the basis that a declaration to this effect was made by the assessee and as such no opinion had been given by the Assessing Officer on the correctness or otherwise of the declaration under the law and on the facts of the case. In this view of the matter, according to the learned D.R. action taken under section 65 was proper.

7. We have considered the arguments made by both the learned representatives and we have further noticed that admittedly the interest income shown in the submitted statements' under section 143‑B was not declared in the returns of income. We shall therefore, look into this aspect of the case as well while giving our findings on the issues argued by the learned representatives.

8. We shall first examine as to what under the law are the responsibilities of a person having income covered under presumptive taxation viz 80‑B, 80‑C etc., of the Ordinance as well as from sources not covered by the said Presumptive Taxation Schemes and as to what would be consequences if the said legal responsibilities are not met.

The relevant portions of the provisions of law for the purpose of studying these responsibilities in the context of the present assessee are sections 55, 80‑B, and 143‑B of the Ordinance. For the sake of convenience these provisions of law are quoted below:‑‑

55. Return of total income.‑(1) Every person,‑‑

(a)whose total income or the total income of any other person, in respect of which he is assessable under this. Ordinance, for any income year (hereinafter referred to as the said income year') exceeds the maximum amount which is not chargeable to tax under this Ordinance; or

(b)

(c).............................................................

shall furnish a return of his total income or the total income of such other person, as the case may be, for the said income year:

Provided that, where the entire total income of an assessee during the income year consists of income chargeable under the head "Salary" he may, instead of furnishing a return as aforesaid, file a certificate from his employer in the prescribed form setting forth such particulars, and accompanied by such statement, and verified in such manner, as may be prescribed, and the said certificate shall be deemed to be a return under this subsection:

Provided further that the persons otherwise not required to file return of total income under the first proviso, or section 80C or section 80CC shall, except in the case of firms, associations of persons, or bodies of individuals, whether incorporated or not, and companies who are otherwise not chargeable to wealth‑tax under the Wealth Tax Act, 1963 (IX of 1963), and persons whose declared income for the relevant year or the last declared or assessed income is less than two hundred thousand rupees, file return of wealth alongwith the certificate of statement of their income in lieu of such return of total income:

Provided also ......................................................................

Provided that.......................................................................

(2)......................................................................................

(3).....................................................................................

Explanation........................................................................

80B. Tax on income of certain persons from dividends and bank profits, etc.‑‑‑(1) Notwithstanding anything contained in this Ordinance or any other law for the time being in force, where any amount referred to in subsection (2) is received by or accrues or arises or is deemed to accrue or arise to an individual, unregistered firm, association of persons, Hindu, undivided family or artificial juridical person referred to in clause (32) of section 2, the whole of such amount shall be deemed to be income of such person and tax thereon shall be charged at the rates specified in the first Schedule.

(2) The amount referred to in subsection (1) shall be the following namely:‑‑

(a)

(aa)

(b)

(bb) ............................................................................

(c) interest or profit on which tax is deductible under sub section (7D) of section 50:

Provided that this clause shall not apply in respect of any assessment year commencing on, or after, the first day of July, 2002.

(d) ...............................................................................

(3) Nothing contained in this Ordinance shall be so construed as to authorise any allowance or deduction against the income as determined under subsection (1) or any refund of tax deducted or collected under section 50 or set off of any loss under any provision of this Ordinance.

(4) Where the assessee has no income other than the income referred to in subsection (1) in respect of which tax has been deducted or collected, the tax deducted or collected under section 50 shall be deemed to be the final discharge of the tax liability of the assessee under this Ordinance and he shall not be required to file the return of total income under section 55.

(5) In a case to which subsection (4) applies, an order under section 59A shall be deemed to have been made in respect of income referred to in subsection (1).

143B. Statement regarding certain assessees.‑Every person whose income is chargeable under section 80B, section 80BB, section 80C, section 80CC or section 80CD shall, on or before the thirtieth day of September in each year, furnish to the Deputy Commissioner, or any other officer authorised in this behalf by the Central Board of Revenue, a statement showing such particulars relating to his income for the preceding financial year, and in such form, and verified in such manner, as may be prescribed."

9. Chapter‑XIV of the Income Tax Ordinance, 1979 starts with section 139 and ends up with section 166. Under sections starting from 139 to 143‑B some statements are prescribed and sections from section 143‑C to section 150 relate to information, calling for information, disclosure of information etc. Primarily this Chapter deals with the subject of obtaining information for the purposes of carrying out the functions under the Ordinance. Statements from sections 139 to section 143 are to be submitted to the Department by the payers of prescribed amounts/payments, under section 143A the Registering Authority is to inform about the properties registered and section 143‑B prescribes statement to be submitted by the recipient of certain prescribed amounts/payments which are chargeable under the provisions of schemes of presumptive tax as are prescribed under sections 80B, 80BB, 80C and 80CC or 80CD of the Ordinance. The basic function of these statements prescribed under section 139 to 143B in Chapter XIV appears to serve as piece of information. However, a concessional treatment has been provided in subsection (4) of section 80B, sub section (1) of section 80BB, subsection (4) of section 80C, subsection (3) of section 80CC and subsection (3) of 80CD that where an assessee has no income other than the income provided under section 80B(1) or under section 80BB(1) or under section 80C(1) or under section 80CC(1) or section 80CD(1), then the tax withheld under relevant subsection of section 50 shall be deemed to be the final discharge of the tax liability of the assessee and he shall not be required to file the return of total income under section 55. Section 55 prescribed that among others, every person whose total income in respect of which he is assessable under this Ordinance for any income year, exceeds the maximum amount which is not chargeable to tax under the Ordinance shall furnish a return of his total income for the said year.

10. Now the question arises that if a person has income also other than that covered under section 80B or section 80BB or section 80C or 80CC or section 80CD and is therefore, not covered by the concession of not filing the return as provided in the relevant sections 80B(4), 80BB(1), 80C(4); 80CC(3) or 80CD(3) and has to submit his return of income under section 55, will he be required to declare income from all sources including those covered under sections 80B, 80C, 80CC and 80CD or the return under section 55 may exclude the income from sources covered under provisions of law relating to presumptive taxation prescribed in sections referred to supra. 'We notice that where a return under section 55 is required under the law to be filed, then this statement must refer to the income of the income year. Total income has been defined in clause (44) of section 2 to mean the total amount of income computed in the manner laid down in this Ordinance and includes any income which, under any provision of this Ordinance is to be included in the total income of an assessee. Sections 80B, 80BB, 80C, 80CC and have laid down procedure for computing income in respect of amounts subject to Presumptive taxation under the said sections and therefore, it is clear that incomes covered through presumptive taxation have to be declared in the return required to be filed under section 55 of the Ordinance by an assessee who has income also from sources other than those covered by the presumptive taxation. This being the legal position, we find that if it is presumed that provisions of section 80B were applicable to the interest received by the assessee from the company, even then the forms of the returns submitted by the appellant for the assessment years under appeal were not showing correct income to be declared legally because income said to be chargeable to tax under section 80B had never been included in the returns submitted under section 55 by the appellant. This being the case, we are of the opinion that since the returns had not been correctly verified and some sources on income (assumed to be. presumptive income) which were required to be declared in the return were not so declared, even on this score this was a fit case for proceeding under section 65 of the Income Tax Ordinance 1979 in all the years.

11. While we were discussing the issue of filing of return by a person having income from sources covered under Presumptive Taxation Schemes as well as from sources not covered by the Presumptive Taxation Scheme, Mr. Naqvi referred to the prescribed forms of returns of income to contend that no space was provided in the return form for declaring sources of income which were covered under sections 80B, 80C etc. This contention of the learned A.R. does not appear to tie proper because the income from all sources covered under section 80B is "income from other sources" for which proper space is provided in the return and presumptive, incomes under section 80C, 80CC etc. are "incomes from business and profession" for which again proper space is provided in the return. This contention of the learned A.R. therefore, is of no help to him and the legal position remains the same as explained by us in para. 10 supra.

12. Now we come to the reasons for action under section 65 which have been discussed by the authorities below in their orders or contested by the learned representatives in their arguments. There is no dispute that where the assessment had been completed under section 59(1) of the Ordinance, there was no occasion with the Assessing Officer to have given any opinion on the issue as to whether the interest income was rightly declared to be so chargeable under section 80B or not. Therefore, there can be no dispute that if it is held that the appellant had incorrectly declared interest to be an amount covered under section 8013(1), and was so accepted by the Assessing Officer, then the provisions of section 65 would obviously become applicable as the Assessing Officer was led to believe that was not correct. Similarly where the amount or interest received was accepted as chargeable under section SOB without making any investigations, that acceptance was perverse on the basis or facts on records as the amount of interest received was not an amount as mentioned in section 80B since neither tax was deductible nor actually deducted under section 50(7D) of the Ordinance and by making cash payment, and mala fide submitting the statement purported to be a statement under section 14313, the assessee led the Assessing Officer to arrive at a perverse opinion and therefore, even then the provisions of section 65 would be legally attracted.

13. The whole issue therefore, hinges on the finding as to whether the interest income earned by the appellant was covered under section 80B or not. We will have to study sections 80B and 50(7D) of the Ordinance and even at the cost of repetition, we reproduce below the relevant provisions of section 80B also alongwith section 50(7D) of the Ordinance:‑‑

"80B. Tax on income of certain persons from dividends and bank profits, etc.‑(1) Notwithstanding anything contained in this Ordinance or any other law for the time being in force, where any amount referred to in subsection (2) is received by or accrues or arises or is deemed to accrue or arise to an individual, unregistered firm, association of persons, Hindu, undivided family or artificial juridical person referred to in clause (32) of section 2, the whole of such amount shall be deemed to be income of such person and tax thereon shall be charged at the rates specified in the First Schedule.

(2) The amount referred to in .subsection (1) shall be the following namely:‑‑

(a) ...............................................................................

(aa) ..............................................................................

(e)...............................................................................

(bb)...............................................................................

(c) interest or profit on which tax is deductible under sub section (7D) of section 50:

Provided that this clause shall not apply in respect of any assessment year commencing on, or after the first day of July, 2002.

(d)...............................................................................

50(7D). Any person responsible for making any payment by way of profit or interest on bonds, certificates, debentures, securities or instruments of any kind issued by any banking company, or any company referred to in sub‑clause (a) or sub‑clause (b) of clause (16) of section 2, or any local authority, or any finance society shall deduct advance tax, at the time of making such payment, at the rate specified in the First Schedule.

..

14. A simple reading of section 80B(2)(c) clearly shows that provisions of section 80B are applicable where interest or profit is of the nature on which tax is deductible under subsection (7D) of section 50 and subsection (7D) prescribes deduction of tax on profit or interest on bonds, certificates, debentures, securities or instruments of any kind issued by a company. In the facts of the present case we find that no instrument of any kind was admittedly issued by the company with regard to Director's loan and in this view of the matter section 50(7D) was not at all applicable. The facts found from the orders of the authorities below confirm that no tax was withheld by the company while making payment of the interest and this action on the part of the company was legally correct because the company had not issued instrument of any kind in respect of which this interest was being paid and therefore; it was not required under the law to withhold tax on the amount of interest paid in respect of an account or deposit kept with the company as was the position in the instant case. It is only a banking company or a financial institution which is required to withhold tax under section 50(2A) of the Ordinance out of profit or interest paid in respect of an account or deposit made with it. Since Pakistan Packages (Pvt.) Ltd., is neither a banking company nor a financial institution, it was not required to withhold tax under section 50(2A) as well. This being the case and since provisions of section 50(7D) were not applicable to the interest income received by the assessee from the company the provisions of section 80B which were subservient to the applicability of section 50(7D) were not at all attracted. Filing of a statement in the garb of a statement under section 143B declaring, receipt of the said interest legally and factually incorrect leading the Assessing Officer toil acceptance of the said statement at its face which therefore, amounts to an opinion or view which is perverse in law and on facts in the circumstances of the case. Action under section 65 was therefore, correctly taken for all the assessment years under appeal.

15. Before parting with these appeals we may state that facts of the case relied upon by the learned A.R. and cited as (1997) 76 Tax 131 (S.C. Pak.) are distinguishable from the facts of the present case. In that case a conscious opinion was given that on the basis of material on record and in view of details furnished by the assessee and perused by all authorities concerned including the Assessing Officer, First Appellate Authority and the ITAT certain debts were considered to be allowable but then on the basis of the same facts on records it was held during the proceedings under section 65 that the said debts were not allowable. This was considered by the august Supreme Court of Pakistan to be a case of change of opinion. As against this in the case before us the correctness or otherwise of the purported statement under section 143‑B had never been considered. It was accepted at its face value when the assessee had stated that tax under section 50(7D) had been deducted and paid whereas the factual position is that no tax had been deducted by the company under section 50(7D) and rightly so because that provision of law was not applicable to the company: Similarly the case cited by the learned A.R. and reported as 2002 PTD (Trib.) 203 is distinguishable from the facts of the present case insomuch so that in the reported case there was available an instrument issued by the company whereas in the, present case before us admittedly there was no instrument of any kind issued by the company.

16. In the conclusions, our findings, are that in the circumstances of the case action under section 65 had rightly been taken because;

(i)Action of the Assessing Officer to originally charge tax under section 80B was perverse to which he was led due to filing of a statement purported to be a statement under section 143B falsely indicating that the tax had been withheld under section 50(7D) although the company had not withheld any tax and rightly so because in respect of this account or deposit pertaining to the loan no instrument had been issued by the company and therefore, section 50(7D) was not applicable in the circumstances of the case; and

(ii)The assessee having failed to declare total, income from all sources computable under the provisions of the Ordinance in the return of income filed under section 55 had concealed particulars of income and therefore, had made himself liable to action under section 65 upon proper appreciation of the information container in the statement submitted by him in the garb of the statement under section 143B of the Ordinance.

17.The appeals therefore, fail as. we have held that action under section 65 has rightly been taken.

C.M.A./801/Tax (Trib.)Appeals rejected.