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

‑‑‑‑Ss. 66‑A, 59‑A & 143‑B‑‑‑Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order‑‑‑Under S.59‑A of the Income Tax Ordinance, 1979 order was deemed to have been passed when statement under S.143‑B of the Income Tax Ordinance, 1979 was received and such order could not even be cancelled under S.66‑A, of the Income Tax Ordinance, 1979 what to speak of allowing the Assessing Officer to deviate from the declaration made under S.143‑B of the Income Tax Ordinance, 1979.

I.T.As. Nos.966 and 967/KB of 2000‑2001 rel.

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

‑‑‑‑S. 56‑‑‑Notice‑‑‑Request for filing of return through a letter, not by a notice---Validity---Assessing Officer had specifically requested the assessee to submit the return income and other details‑‑‑Letter of the Assessing Officer receipt of which was not denied by the assessee satisfied the provisions of S.56 of the Income Tax Ordinance, 1979.

I.T.A. No.84/KB of 1998‑99 distinguished.

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

----S. 155---Certain mistakes not to vitiate assessment, etc.,---Notice---Want of form---Mistakes, defect or omission Validity---No notice issued or executed or purported to be made, issued or executed under the Income Tax Ordinance, 1979, shall be void or otherwise inoperative merely for want of form or for a mistake, defect or omission therein which was not of a substantial nature prejudicially affecting an assessee.

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

---Ss. 80-B, 143-B & 2(3)---Tax on income of certain contractors and importers Interest Income---Company Presumptive taxation---Validity appellate Tribunal did not subscribe to the view of the assessee that the interest income declared under S. 143-B of the Income Tax Ordinance, 1979 by the company was rightly chargeable under S. 80-B of the Income Tax Ordinance, 1979 as the assessee was an artificial juridical person duly covered in S. 80-B(1) of the Income Tax Ordinance, 1979 and S. 2(32) of the Income Tax Ordinance, 1979 prescribed independent status to a company as a person from that of other artificial juridical persons---Since the word company as a person was conspicuously mission in S. 80(1) of the Income Tax Ordinance, 1979, Appellate Tribunal held, that the provisions of presumptive taxation under S. 80-B of the Income Tax Ordinance, 1979 were not available to a company Interest or profit received by the company or accrued to company was not covered by S. 80-B of the Income Tax Ordinance, 1979.

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

---Ss. 143-B & 62---C.B.R. Circular No. 12 of 1991 dated 30-6-1991---Statements regarding certain payments---Normal assessment Proportionate expenses against income being assessed under normal law was not allowed by the assessing Officer due to non-filing of audited accounts ---Validity---Appellate Assessee had never provided copies of the audited accounts in spite of repeated requests by the Assessing Officer Assessing Officer had no basis to verify and allow expenses against income which was being assessed under normal law---Assessing Officer could only estimate the profit and loss expenses against the income assessed under normal law‑‑‑Appellate Authority was justified in confirming the treatment given by the Assessing Officer in this regard.

Malik Muhammad Iqbal and Hameedullah, I.T.P. for Appellant.

Shaheen Aziz Niazi, D.R. for Respondent.

Date of hearing: 3rd September, 2002.

ORDER

MUHAMMAD AKHTAR NAZAR MIAN (ACCOUNTANT MEMBER).‑‑‑This appeal has been filed by the assessee appellant against the order dated 17‑10‑1996 passed by the learned CIT (A) Zone‑V, Karachi in the case of the assessee for the assessment year 1993‑94.

2. The facts so far as relevant for decision in this appeal are that the appellant submitted a statement under section 143B of the Income tax. Ordinance, 1979 declaring imports, supplies, contractual receipts and interest income. The Assessing Officer found that whereas the supplies and commercial imports were covered under presumptive taxation provided in section 80‑C of the Income Tax Ordinance, 1979, (hereinafter referred to as the Ordinance), but the foreign indenting commission showed as contractual receipts and the income from interest were not liable to be accepted under presumptive regime. After exchange of few letters between the Assessing Officer and the assessee on the manner of chargeability of tax on foreign indenting commission and interest, the Assessing Officer served a letter on the assessee on 30‑8‑1995 wherein he inter alia requested (the assessee) to submit the return of income for the year under review alongwith details/documents allowable under section 31 of Income Tax Ordinance, 1979 by 13‑8‑1995 definitely failing which statement under section 143B will not be accepted and the case will be finalized under normal law. Since no return was submitted by the assessee, the Assessing Officer proceeded to determine the income and tax thereon in the manner indicated below:‑‑

Income covered under section 80‑C

Income not covered under section 80C

3. The learned A.R. has submitted that in the case of the appellant for the assessment year 1996‑97, departmental appeal against the order of learned CIT(A) was dismissed vide I.T.A. No.84/KB of 1998‑99 dated 7‑11‑1998. In that year the CIT (A) had set aside the order passed by the Assessing Officer in similar manner as he has done for the year under appeal and he had directed the Assessing Officer to first serve a notice under section 56 of the Ordinance and only then make assessment under section 62 of the Ordinance. Also a reference has been made to another decision of this Tribunal in I.T.As. Nos.966 and 967/KB of 2000‑2001 (Assessment years 1996‑97 and 1997‑98) dated 10‑11‑2001 wherein it was held that under section 59A an order is deemed to have been passed when statement under section 143B of the Ordinance is received and this order cannot even be cancelled under section 66‑A, not to speak of allowing the Assessing Officer to deviate from the declarations made under section 143B. The D.R. on his part supports the order of the departmental officer.

4. Coming to merits, we find that the order of the Tribunal in I.T.A. No.84/KB of 1998‑99 dated 7‑11‑1998 is of no help to the appellant. This is so because for the assessment year 1996‑97 the assessment was set aside by the learned CIT (A) with the direction to issue notice under section 55 of the Ordinance and this direction was confirmed by this Tribunal. As against this in the year under appeal the Assessing Officer had specifically requested the assessee to submit the return of income and other details. This letter of the Assessing Officer, receipt of which is not denied by the assessee, satisfies the provisions of section 56 of the Income Tax Ordinance, 1979.

5. When this observations was made during the hearing, the learned A.R. stated that a notice under section 56 has to be sent in the prescribed manner and this was not done in this case. This contention of the learned A.R. is not well‑founded because section 56 of the Ordinance does not indicate that any form has been prescribed for this purpose. Even if the position would have been that the notice under section 56 was required to be issued in the prescribed form, still the letter issued by the Assessing Officer would have served the purpose of the provisions of law contained in section 56 of the Ordinance in view of section 155 of the Ordinance which provide that no notice issued or executed or purported to be made, issued or executed under this Ordinance shall be void or otherwise inoperative merely for want of form or for a mistake, defect or omission therein which is not of a substantial nature prejudicially affecting an assessee. The purpose of section 56 of the Ordinance is to require the assessee to submit the return of income which has squarely been met through the letter secured by the Assessing Officer oil 6‑8‑1995 referred. In these circumstances case of the appellant for the preceding year is distinguishable because this year notice under section 56 was duly served supra. The decision in I.T.As. Nos. 966 and 967/KB of 2000‑2001 dated 10‑11‑2001 has no relevance at all to the facts of this case in view of proper initiation of proceedings under normal law. We, therefore, hold that the Assessing Officer was legally justified in proceeding to make assessment under normal law so as to properly tax receipt liable to presumptive taxation as well as receipt/income liable to be assessed under other provisions of law.

6. The learned A. R. has then stated that the interest received by the company was rightly chargeable under section 80‑B and was so declared under section 143‑B because the assessee was an artificial juridical person duly covered in subsection (1) of section 80B of the Ordinance. We are afraid we cannot subscribe to the view of the learned A.R. because section 2(32) of the Ordinance prescribes independent status to a company as a person from that of other artificial juridical person. Since the word company as a person is conspicuously missing in subsection (1) of section 80‑B, we hold that the provisions of presumptive taxation under section 80‑B are not available to a company. The interest or profit received by the company or accrued to company is not covered by section 80B of the Ordinance.

7. The next leg of argument of the learned A.R. was that even if the Assessing Officer was justified in computing income under normal law, he should have proportionately allowed expenses in the light of Circular No.12 of 1991 issued by the C.B.R. The circumstances in this case are that the appellant had never provided copies of the audited accounts in spite of repeated requests by the Assessing Officer and in these circumstances obviously the Assessing Officer had no basis to verify and allow expenses against income which was being assessed under normal law. He could only estimate the profit and loss expenses against the income assessed under normal law and in this view of the matter the learned CIT(A) was justified in confirming the treatment given by the Assessing Officer in this regard.

8. Consequently, the appeal being devoid of merits on all accounts is dismissed.

C. M. A./541/Tax(Trib.) Appeal dismissed.