Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑‑S.134(6)‑‑‑Appeal to Appellate Tribunal‑‑‑Stay of reassessment proceedings‑‑ Department contended that S.134(6) of the Income Tax Ordinance, 1979 empowered the Appellate Tribunal to grant stay only with regard to recovery of tax and did not give powers to Appellate Tribunal to grant stay against the reassessment proceedings and if stay was not vacated, the case of the assessee would become time‑bared‑‑ Assessee contended that grant of stay by the Appellate Tribunal was integral part and parcel of Appellate Tribunal's powers to hear appeals under S.134 of the Income Tax Ordinance, 1979 and appeal was the continuation of the assessment proceedings so the Appellate Tribunal had inherent jurisdictional powers not only to grant stay against the recovery of tax but also to stay the reassessment proceedings ‑‑‑Validity‑ Appellate Tribunal agreeing with the contention of the assessee did not interfere with earlier finding whereby it granted stay against the reassessment proceedings‑ ‑‑Application seeking vacation of stay order was rejected by the Appellate Tribunal.

Writ Petition No. 13815 of 1996; 1985 PTD 375 and Commissioner of Income‑tax, Bombay Presidency and others v. Khaim Chand Ram Das (1938) 6 ITR 414 rel.

Asif Hashmi and Mrs. Talat Altaf, D. Rs. for Appellant.

Shahbaz Butt for Respondent.

Date of hearing: 1st June, 2002.

ORDER

SYED NADEEM SAQLAIN (JUDICIAL MEMBER).‑‑‑Through the titled miscellaneous applications, the Revenue has prayed for the vacation of stay against the reassessment proceedings to be conducted by the Assessing Officer.

2. The facts in brief are that the assessment in the instant case was framed under section 62 of the Income Tax Ordinance, 1979 (hereinafter called as Ordinance). The learned CIT(A) Special Zone, Lahore cancelled the assessment framed under section 62 of the Ordinance and remanded it back to the Assessing Officer for de novo assessment while exercising his revisional powers under section 68A of the Ordinance. Feeling aggrieved with the same the assessee approached the Tribunal by impugning the order passed under section 66A of the Ordinance by the learned IAC. During the pendency of the appeals before the Tribunal the assessee has preferred the instant miscellaneous application seeking stay against the reassessment proceedings purportedly to be conducted by the Assessing Officer after the assessment framed by the Assessing Officer had been cancelled and the case remanded to the Assessing Officer for de novo proceedings.

3. Both the parties have been heard. The learned D.R. has vehemently argued the case and contended that section 134(6) of the Ordinance empowers the Tribunal to grant stay only with regard to recovery of tax and does not give powers to the Tribunal to grant stay against the reassessment proceedings. Besides, the learned D.R. has submitted that if stay is not vacated, the case of the assessee would become time‑barred because the assessment is to be framed before the 30th of June. The learned A.R. has controverted the arguments advanced by the learned D.R. and submitted that grant of stay by the Tribunal is integral part and parcel of Tribunal's powers to hear appeals under section 134 of the Ordinance. He further argued that appeal is the continuation of the assessment proceedings so the Tribunal has got inherent jurisdictional powers not only to grant stay against the recovery of tax but also to stay the reassessment proceedings. The learned A.R. in support of his contention relied upon the judgment of the Lahore High Court passed in Writ Petition No. 13815 of 1996 dated 31‑1‑2002. The facts in the supra cited judgment of the Lahore High Court, Lahore are somewhat identical to the facts of the case in hand wherein the assessee challenged the Commissioner's order before the Tribunal whereby the First Appellate Authority had remanded the case back to the Assessing Officer for de novo proceedings. The order of the Commissioner was further challenged by the assessee through an appeal before the Income -tax Appellate Tribunal, while the appeal was so pending before the Tribunal the Assessing Officer started reassessment proceedings and issued notices to the petitioner who replied that the matter is pending before the Tribunal. The Assessing Officer, however, proceeded to complete the assessment of the petitioner reiterating the earlier order. The assessee approached the Honourable Lahore High Court contending that the Assessing Officer has acted without lawful authority in completing the assessment when the appeal against the order of the Commissioner was still pending before the Tribunal. Mr. Justice Maulvi Anwarul Haq while following another judgment of the High Court Lahore reported as 1985 PTD 375 and a judgment of the Privy Council in the case of Commissioner of Income‑tax, Bombay Presidency and others v: Khaim Chand Ram Das (1938) (V.I. 6 ITR 414) wherein it was observed that:

"assessment once made does not come to an end until proceedings with regard to assessment have finally been concluded and since the matter of first assessment is still pending the second assessment order is illegal. The contention found favour with the Court and it was held that till such time that the reference is pending the Income‑tax Authorities have to wait for the result."

While concluding the Honourable High Court held:

"To my mind, the said judgment in the said case does support the present petitioner inasmuch as the matter of first assessment is still pending before the Appellate Tribunal and the respondent having been duly intimated for the said fact ought to have waited for the decision of the appeal. The writ petition is accordingly allowed with the observations that the respondent shall wait for the decision of the Income‑tax Appellate Tribunal in appeal of the petitioner and proceed further in the matter, in accordance with the decision of the said Tribunal."

4. We have no hesitation in holding that the judgments cited by the learned A.R. are on all fours applicable to the assessee's case. We are, therefore, not inclined to interfere in our earlier finding whereby we granted stay against the reassessment proceedings.

5. Resultantly, miscellaneous applications seeking vacation of stay order is hereby rejected.

C.M.A./567/Tax (Trib.) Petition rejected.