Wealth Tax Act (XV of 1963)‑‑‑-

‑‑‑‑S. 14‑C‑‑‑Tax on ownership of certain immovable assets ‑‑‑Assessee filed wealth tax return. and claimed exemption on self‑occupied house‑‑ Tax was paid on the basis of such return‑‑‑Assessing Officer changed minimum tax under S. 14‑C of the Wealth Tax Act, 1963 over and above the tax paid on the basis of wealth tax return and the same was confirmed by the First Appellate Authority‑‑‑Validity‑‑‑Record showed that the assessee had paid total tax alongwith the return but Assessing Officer proceeded to levy tax under S. 14‑C of the Wealth Tax Act, 1963 over and above the tax liability imposed upon the assessee‑‑‑Such action amounted to double taxation which was not permissible under the law‑‑ Assessee claimed exemption being .in self‑occupation of the property which was allowed by the Department‑‑‑If assessee still had to pay tax under S. 14‑C of the Wealth Tax Act, 1963 then this would be a sort of the liverage given to the Department to circumvent the legal provision under which the assessee had been provided exemption‑‑‑Appellate Tribunal vacated the assessment order as well as the first appellate order and tax levied under S. 14‑C of the Wealth Tax Act, 1963 was directed to be deleted.

2000 PTD (Trib.) 2433 ref.

M. Sarfraz, F.C.A. for Appellant.

Mehboob Alam, D.R., for Respondent.

Date of hearing: 6th February, 2002.

ORDER

SYED NADEEM SAQLAIN (JUDICIAL MEMBER).‑‑‑The assessee/appellant has come up in appeal. calling in question the impugned order, dated 11‑2‑2000 passed by the learned CWT(A). The sole contention raised by the assessee is that the ‑learned first appellate authority was wrong in confirming the assessment order whereby the Assessing Officer levied minimum tax at Rs.11,000 under section 14‑C of the Wealth Tax Act,1963 (hereinafter called as Act) in spite of the fact that the assessee has paid total wealth tax amounting to Rs.55,070.

Briefly stated the facts of the case are that Wealth Tax Return was filed by the assessee declaring total wealth at Rs.3,39,000 and agricultural wealth at Rs.38,88,000. The assessee also declared share in a house situated at 202 Shah Jamal Lahore and claimed exemption on the basis of self‑occupation which was accordingly allowed. However, the Assessing Officer levied minimum tax amounting to Rs.11,000 under section 14‑C of the Act. The assessee failed before the First Appellate Authority, hence the instant appeal.

Both the parties have been heard and relevant orders perused. The learned A.R. has vehemently contested the assessment order on the issue of imposition of minimum tax under section 14‑C as well as confirmation thereof by the learned First Appellate Authority. He

contended that since assessee has already paid wealth tax of Rs.55,070 minimum tax under section 14‑C is not chargeable since it was only leviable when no other tax is paid by the assessee. He further submitted that as per law laid down under section 14‑C, the minimum tax under section 14‑C of the Act is to be adjusted if the final tax liability determined under the Act exceeded the amount so paid. He further contended that it amounts to double taxation if minimum tax under section 14‑C is required to be paid over and above the wealth tax paid by the assessee. The learned D.R. on the contrary has opposed the arguments advanced by the learned A.R.

Arguments heard and relevant orders perused. After hearing the learned counsel for both the parties, we find ourselves in full agreement with the arguments advanced by the learned A.R. Before proceeding further, it would be appropriate if section 14‑C of the Act is reproduced for the sake of convenience since the whole issue in this case revolves around the supra provision which is as under:‑‑‑

"S. 14‑C. Tax on ownership of certain immovable assets.‑‑‑(1) Notwithstanding anything contained in this Act, every person who owns an immovable asset referred to in clause (d) of subsection (1) of section 14 shall pay wealth tax at the rates specified in paragraph B of Part II of the First Schedule:

Provided that nothing contained in this subsection shall apply to widows, orphans below the age of twenty‑five years, pensioner, and disabled persons.

(2)The tax under this section payable by way of advance tax in accordance with the provisions of sections 13‑A and 13‑D shall be deemed to be the minimum amount of tax payable under this section and where the final tax liability determined under this Act exceeds the amount paid, if any, under the aforesaid provisions, the amount so paid shall be adjustable against the final tax liability of the assessee."

Perusal of abovementioned section leads to the conclusion that this section was enacted to bring those people within the net of taxation who were not paying wealth tax otherwise. But the law clearly provided that such tax should be considered as an advance tax and if the wealth tax liability exceeds the amount paid, if any, under the aforesaid provisions, the amount so paid is adjustable against the final tax liability of the assessee. In this regard we would like to refer a case reported as 2000 PTD (Trib.) 2433 wherein it has .been held:

"Wealth tax is levied in pursuance of Entry No.50, sub‑para. 1 of the Federal Legislative List in. the Fourth Schedule to the Constitution which deals with taxes on the capital value of assets, whereas taxes on immovable property are within the competence of Provincial Legislature. Therefore, tax under section 14C can only be construed as advanced tax and not as final tax liability in respect of assets referred to in section 14(1)(d). "

It is further held that:‑‑

"Tax under section 14‑C was held to be advanced tax which could not be reckoned in calculation of final tax liability on 'net wealth'. "

It is evident in the case before us that the assessee paid total tax amounting to Rs.55,070 and that the Assessing Officer proceeding to levy tax under section 14‑C over and above the tax liability imposed upon the assessee. Clearly, it amounts to double taxation which is not permissible under the law. We cannot lose sight of the fact that the assessee claimed exemption being in self‑occupation of the property which was allowed by the department. This being the case, if the assessee is still has to pay tax under section 14‑C then this will be a sort of liverage given to the department to circumvent the legal provision under which the assessee has been provided exemption. For the foregoing reasons, we vacate both the assessment order as well as the first appellate order and tax levied under section 14‑C is directed to be deleted.

7. Appeal of the assessee succeeds accordingly.

C.M.A./493/Tax(Trib.)Appeal succeeded.