Finance Act (XII of 1991)‑‑‑-

‑‑‑‑Ss. 12(6)(7) & (8)‑‑‑Corporate Assets Tax‑‑‑Assessment‑‑‑Additional tax‑‑‑Penalty‑‑‑Return was filed in response to notice of Assessing Officer declaring the value of fixed assets at below the. minimum threshold by excluding the value of the work‑in‑progress while arriving at the value of fixed assets for Corporate Assets Tax and submitted a detailed explanation alongwith the Corporate Assets Tax Return‑‑‑Tax was levied alongwith additional tax under S.12(8) and penalty under S.12(7) of the Finance Act, 1991, for delay in filing of Corporate Asset Tax Return‑‑‑First Appellate Authority reduced the value of fixed assets‑‑‑Imposition of additional tax was maintained and the imposition of penalty under S.12(7) of the Corporate Assets Tax was upheld by holding the appellant/assessee defaulter for non‑filing of Corporate Assets Tax Return‑‑‑Validity‑‑‑Law did not help the dormant party in a dispute‑‑‑Although there was no time limit for initiating the proceedings and also for levying of penalty for non‑filing of Corporate Assets Tax Return but the Department had failed to start the proceedings for assessment as well as of imposing the penalty within legal or morally justifiable span of time‑‑‑Assessment order under S.12(6) of the Finance Act, 1991 was pointless, regarding the delay in filing the returns vis‑a vis findings for initiating the penalty proceedings particularly in the presence of explanatory letter from appellant/assessee on record‑‑ Assessing Officer failed to record the findings on the point of belated Corporate Assets Tax Return and also there was complete absence of the express intention to initiate the penalty proceedings under S.12(7) of Corporate Assets Tax read with S.12 of the Finance Act, 1991‑‑‑Such incurable defect went to the roots of the penalty proceedings‑‑‑Ambiguity in respect of imposition of Corporate Assets Tax was created by the Revenue itself and no attempt was made to clarify the ambiguous circular after the imposition of the Corporate Assets Tax vide Finance Act, 1991‑‑‑No reason existed for maintaining the imposition of penalty under S.12(7) of the Finance Act, 1991‑‑‑Appellate Tribunal held that the penalty be deleted being devoid of any legal sanction in the circumstances whereas the Corporate Assets Tax imposed under S.12(6) of the Finance Act, 1991, was maintained but on the point of imposition if additional tax the First Appellate Authority omitted to decide the issue and it could not be adjudicated upon by the Tribunal and the same was remanded to the First Appellate Authority for passing appropriate order‑‑‑Order of the First Appellate Authority was maintained only to the extent of determining the value of capital assets and levying the Corporate Assets Tax on such determined value.

2000 PTD (Trib.) 532; 2000 PTD (Trib.) 2853 and 2001 PTD (Trib.) 2964 rel.

Shahbaz Butt for Appellant.

Vishno Raja Qavi, D.R. for Respondent.

Date of hearing: 6th August, 2002.

ORDER

The appellant a private limited company has filed these two appeals for assessment year 1991‑92 one is directed against the framing of assessment under section 12(6) of the Carportate Assets Tax read with Finance Act, 1991 for imposing the CAT vis‑a‑vis value of assets determined at Rs.5,77,18,000 and also the imposition of additional tax under section 12(8) on the demand created for payment as CAT, and the second appeal is against the imposition of penalty at Rs.21,54,000 under section 12(7) of CAT for delay of 2154 days in filing of CAT return for the assessment year 1991‑92.

Brief facts of the case are that the concerned DCIT issued notice calling upon the appellant/assessee to file CAT return vide notice, dated 14‑11‑1997. The appellant/assessee filed the return within the prescribed time as per notice, the requisite return was filed on 25‑11‑1997 by declaring the value of fixed assets at below the minimum threshhold, by excluding the value of the work‑in‑progress while arriving at the value of fixed assets of CAT and submitted a detailed explanation by enclosing it with the CAT return. The Assessing Officer passed order under section 12(6) of CAT by taking the value of fixed assets at Rs.6,80,16,000 and imposed CAT at Rs.5,00,000 and a sum of Rs.7,20,000 as additional tax at the rate of 24 per cent. per annum under section 12(8) for non‑deposit of assets tax demand for the defaulting period. The penalty under section 12(7) at Rs.21,54,000 for 2154 days delay in filling of CAT returns was imposed. The learned CIT/WT(A) reduced the value of fixed assets to Rs.5,70,18,000. The imposition of additional tax was maintained and the imposition of penalty under section 12(7) of Carporate Assets Tax was upheld for holding the appellant/assessee defaulter for non‑filing of Corporate Assets Tax Return.

While arguing the case of learned A.R. has not laid much stress over the imposition of CAT on the reduced valuation of fixed assets in the first appeal but vehemently contested the imposition of additional tax worked out on CAT demand and exerted his full pressure through forceful arguments against the imposition of penalty which to him have no sanction in the law. The learned A.R. contended that in such circumstances of the case the imposition of penalty under section 12(7) statedly for late filling of CAT return and also the imposition of additional tax for non‑payment of assessed CAT demand at the time of filling of return is not only against the law but is also contrary to the facts of the case, thus both the impositions were termed as against the principle of equity, justice and fairplay. The learned A.R. duly supported his arguments by placing reliance on the following citations, wherein the imposition of penalty and levy of additional tax have been held to be deleted.

(1) 2000 PTD (Trib.) 532; (2) 2000 PTD (Trib) 2853 and (3) 2001 PTD (Trib.) 2964.

In these decisions the issues involved in the instant case have been dilated upon.

The learned D. R. fully supported the decision of the learned First Appellate Authority by reading out paras. of the assessment order and also the comments of the learned CIT/WT(A) on maintaining the penalty under section 12(7) and levy of additional tax. The learned D.R. contended that return has not been filed voluntarily and appellant/assessee withheld the Government tax unnecessarily.

Arguments have been heard and the available record perused.

Before concluding it is imperative to bring on record that law does not help the dormant party in a dispute, although there is no time limit for initiating the proceedings and also for levying of penalty for non‑filling of CAT return but the department has failed to start the proceedings for assessment as well as of imposing the penalty within legal or morally justifiable span of time. The assessment order under section 12(6) is pointless, regarding the delay in filling of the returns, vis‑a‑vis. findings for initiating the penalty proceedings particularly in the presence of explanatory letter from appellant/assessee on record. The Assessing Officer failed to record the findings on the point of belated A CAT return and also there is complete absence of the express intention to initiate the penalty proceedings under section 12(7) of CAT read with section 12 of the Finance Ordinance, 1991, this incurable defect goes to the roots of the penalty proceedings. The ambiguity in respect of imposition of CAT was created by the Revenue itself and no attempt was made to clarify the ambiguous circular after the promulgation of the 'AT vide Finance Ordinance, 1991. So, in the presence of the citations which are identical with the instant appeal and also in view of our above findings there is no reason left for maintaining the imposition of penalty of Rs.21,54,000 under section 12(7) so we

hold that the penalty be deleted on being hereby annulled, as devoid of any legal sanction in the circumstances of this case, whereas the CAT imposed under section 12(6) is maintained but on the point of imposition of additional tax the learned CIT/WT(A) omitted to decide the issue and it cannot be adjudicated upon here so on this issue it is remanded to the learned CIT/WT(A) for passing any order. The order of the learned CIT(A) is maintained only to the extent of determining the value of capital assets and thus levying the CAT on such determined value.

C.M.A./ 598/Tax(Trib.)Order accordingly.