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

‑‑‑‑S.59‑‑‑C.B.R. Circular No.16 of 1992, dated 1‑7‑1992‑‑‑Self Assessment Scheme for assessment year 1992‑93‑‑‑C.B.R. Circular No.9 of 1994, Para. 5‑A‑‑‑Self‑Assessment Scheme for assessment year 1994‑95‑‑‑Self‑assessment‑‑‑Assessment year 1994‑95‑‑‑Selection of case for total audit ‑‑‑Assessee contended that selection for Total Audit could not be earmarked for random balloting draw as it had been exempted to be earmarked by virtue of Self‑Assessment Scheme for the assessment year 1992‑93 being case selected for Total Audit for assessment year 1992‑93 shall not be earmarked for random balloting draw in the subsequent two assessment years‑‑‑Assessing Officer finalized the assessment under S.62 of the Income Tax Ordinance, 1979 on the ground that para. 5‑A of the Self‑Assessment Scheme, 1994‑95 had not been complied with and case had been subjected to Total Audit in one of the three preceding years so for availing the immunity from selection from Total Audit, the tax paid for assessment year 1994‑95 was to be enhanced by at least 20 % as compared to maximum tax payable in any of the three preceding years‑‑‑First Appellate Authority admitted that instructions contained in Self‑Assessment Scheme for assessment year 1994‑95 were contradictory to the earlier policy announced for assess ment year 1992‑93 and accepted the claim of the assessee for acceptance of the return under Self‑Assessment Scheme being not eligible to be earmarked for Random Balloting Draw List‑‑‑Validity‑‑‑Assessing Officer failed to acknowledge the fact that there was nothing in Self Assessment Scheme for assessment year 1994‑95 which could be termed as supersession of what it had given in Self‑Assessment Scheme for assessment year 1992‑93 by specifically exempting from earmarking from random total balloting draw‑‑‑Consequential provisions of allowing relief in respect of the cases for assessment year 1994‑95 could not be forfeited simply by presumptions‑‑‑After processing under Total Audit the income‑tax return for assessment year 1992‑93 filed under Self Assessment Scheme, then the case could not be brought in the scope of para. 5‑A of the Self‑Assessment Scheme for assessment year 1994‑95 which was entirely dealing with a different situation‑‑‑As the case had been subjected to Total Audit for the preceding two years i.e. in assessment year 1992‑93 it was not a case falling under the category once in the preceding three years‑‑‑Taxing statutes were to be strictly construed so bringing such case within the scope of para. 5‑A of the Self‑Assessment Scheme for assessment year 1994‑95 was against all the norms of interpretation of taxing provisions‑‑‑Provisions of the Self ‑assessment Scheme for assessment year 1992‑93, effecting the Income tax returns filed under Self‑Assessment Scheme for assessment year 1994‑95 were validly operative as these had not been taken away by the Self‑Assessment Scheme for assessment year 1994‑95‑‑‑Assessing Officer despite processing the case under Total Audit, had totally failed to justify his action even on passing order under S.62 of the Income Tax Ordinance, 1979. by using the maximum authority vested in him‑‑ Appellate Tribunal upheld the acceptance of the income‑tax return under the self‑assessment.

Muhammad Zulfiqar Ali, D.R. for Appellant.

Ahmed Shujah Khan for Respondent.

Date of hearing: 22nd October, 2002.

ORDER

EHSAN‑UR‑REHMAN (JUDICIAL MEMBER). ‑‑‑Through the titled appeal the Department has assailed the order passed by the learned A.A.C. by allowing the processing of the impugned income tax return under the relevant Self‑Assessment Scheme.

Briefly the facts could be described that the respondent/assessee an individual who was deriving income from dealings in photographic material etc. The case was selected for Total Audit through a, random computer balloting draw. The respondent/assessee contested this selection for Total Audit before the Assessing Officer by stating that the case cannot be earmarked for random balloting draw as has been exempted to be earmarked by virtue of Self‑Assessment Scheme for the assessment year 1992‑93 as the case selected for Total Audit for assessment year 1992‑93 shall not be earmarked for random balloting draw in the subsequent two assessment years, the Assessing Officer did not find the contention of the respondent/assessee as correct by quoting the para. 5‑A of the Self‑Assessment Scheme for assessment year 1994‑95. The Assessing Officer by finding that the provisions of para.5‑A of the S.A.S. 1994 have not been complied with formed a view that the case has been subjected to audit in one of the three preceding years so for availing the immunity from selection from Total Audit, the tax paid for assessment year 1994‑95 was to be enhanced by at least 20% as compared to the maximum tax payable in any of the three preceding years. Thus the Assessing Officer rejected the claim of the respondent/assessee for acceptance of its return under self‑assessment and proceeded to assess the case under Total Audit and passed a final assessment order under section 62. While passing the order under section 62 the Assessing Officer resorted to estimate the receipts from colour printing and developing and Studio Portraits. Secondly by estimating receipts from subsequently printing and developing and thirdly estimated the sales. The sum total of the receipts and sales was subjected to a unform G.P. rate of 35%. Add backs were also made out of the profit and loss expenses claimed but failed to find out any suppression or concealment like irregularity in the case. The respondent/assessee aggrieved against this treatment went in appeal before the learned A.A.C. The learned A.A.C.(A) on finding that the instructions contained in Self‑Assessment Scheme for 1994‑95 are contradictory to the earlier policy announced for the assessment year 1992‑93 thus accepted the claim of the respondent/assessee for acceptance of the return under Self Assessment Scheme being nut eligible to be earmarked for Random Balloting Draw list. The Department has agitated before us the decision made by the learned A.A.C. for allowing the acceptance of the income tax return for the assessment year 1994‑95 under S.A.S.

After hearing the arguments, analyzing the claims and counter claims of the parties and also on perusing the available record the issue involved is that the respondent/assessee is seeking relief under the expressed provisions of the Self‑Assessment Scheme for the assessment year 1992‑93, whereas the Department is rejecting relief sought by the appellant/assessee for the reason that no such facility/concession has specifically been provided in the Self‑Assessment Scheme for assessment year 1994‑95. For proper appreciation of the issue and also for sake of convenience Note to para. 4 (captioned as selection of cases for Total

Audit) of the Self‑Assessment Scheme for the assessment year 1992‑93 is reproduced as under:‑‑‑

(Note: "A case once selected for computer ballot will not be earmarked for such balloting in the next two years".)

The respondent/assessee has been contesting the ear marking of the case for computer random balloting by placing reliance on Note to Column II in para. 4 of the Circular No. 16 of 1992 dated 1‑7‑1992, (ibid) wherein it has been clearly stated that a case once selected through computer ballot for Total Audit will not be earmarked for computer balloting draw in the next two succeeding years, as the case of the respondent/assessee was selected for the Total Audit in assessment year 1992‑93 so, the Department has been precluded to put this case in the list for random computer balloting when the return is otherwise eligible under Self‑Assessment Scheme for the impugned years.

(i) It is imperative to bring on record that the Self‑Assessment Scheme is promulgated in each assessment year by the Central Board of Revenue in order to govern the taxpayers filing their returns. No doubt the scheme is announced for each year but the provisions of such schemes are without prejudice to the Self Assessment Scheme announced for earlier years.

(ii) The Assessing Officer without challenging operation of provisions as expressly given in the assessment year. 1992‑93 has unsuccessfully attempted to bring within the scope of such cases which are to be listed for the computer balloting draw from amongst the returns filed under Self‑Assessment Scheme for assessment year 1994‑95.

(iii) The Assessing Officer who holds a key post has failed to acknowledge the fact that there is nothing in Self‑Assessment Scheme from 1994‑95 which could be termed as in super session of what it has been given in self‑assessment scheme for 1992‑93 by specifically exempting from earmarking from random total balloting the impugned case.

(iv) The consequential provisions of allowing relief in respect of the cases for assessment year 1994‑95 cannot be forfeited simply by presumptions. After processing under Total Audit the income tax return for assessment year 1992‑93 filed under Self‑Assessment Scheme, then in the impugned year the case cannot be brought in the scope of para. 5‑A of the Self‑Assessment Scheme for 1994‑95 which is entirely dealing with the different situations as is evident from his contents which are re‑produced as under:‑‑‑

"Return in cases which have been subjected to audit at least once in the three preceding years shall be immune from selection for audit if the tax paid for assessment year 1994‑95 is higher by at least 20% as compared to the maximum tax payable in any of the three preceding years."

The analysis of the S.A.S. for assessment year 1994‑95 will make it very clear that it has been incorporated to deal altogether different category of cases and no parallel could be drawn.

As the case of the appellant has been subjected to total audit for the preceding too years i.e. in assessment year 1992‑93 and is not a case falling under the category once in the proceedings three years. The taxing statutes are to be strictly construed so bringing this case within the scope of para. 5‑A of the scheme for 1994‑95 is against all the norms of interpretation of taxing provisions.

The provisions of the Self‑Assessment Scheme for assessment year 1992‑93, affecting the Income‑tax returns filed under self assessment scheme for. 1994‑95 are validly operative as these have not been taken away by the Self‑Assessment Scheme for assessment B year 1994‑95. The Assessing Officer despite processing under total audit has totally failed to justify his so doing even on passing order under section 62 by using the maximum authority vested in him.

Keeping in view the discussion supra we have rightly been persuaded to uphold the acceptance of the impugned income tax return under the self assessment. Before parting with the case it is pertinent to point out here the remedy available with the department was of setting apart the case for total audit under para. 4(ii) of SAS 1992‑93 which department has failed to avail.

C.M.A./574/Tax (Trib.) Order accordingly.