Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss. 66‑A & 80C‑‑‑Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order ‑‑‑Assessee used to file return/statement under S. 143‑B of the Ordinance in a circle which had jurisdiction over the contractors ‑‑‑Assessee opted out of the Self- Assessment Scheme and filed return being manufacturers for the next years in a circle having territorial jurisdiction over the case and got refund in consequence of finalization of assessment under normal law‑‑ Inspecting Additional Commissioner considered the assessments as erroneous and prejudicial to the interest of revenue ,on the ground that assessee's jurisdiction was with the circle having jurisdiction over the contractor and assessment was finalized in a circle having territorial jurisdiction over the case in connivance with the Assessing Officer of that circle as assessee was not a manufacturer‑‑‑Validity‑‑‑Opting from Self‑Assessment Scheme being a manufacturer, was only to opt for a normal assessment which did not give right to assessee to change suo Motu his jurisdiction at his own sweet will by saying that the area of his business fell in a particular jurisdiction‑‑‑Jurisdiction of the case remained with the same circle where assessment for the earlier years were made‑‑‑Filing of return in a different circle was erroneous and also prejudicial to the interest of revenue in term of proviso to S.66‑A of the Income Tax Ordinance, 1979 which provided that an order without jurisdiction becomes prejudicial to the interest of revenue suo motu‑‑ Order had rightly been held to be an erroneous and prejudicial to the interest of revenue as the nature of the assessee's business even after opting out remains the same and its assessment under normal law was also to be made by the Assessing Officer having jurisdiction over the cases of contractors‑‑‑Cancellation of order by the Inspecting Additional Commissioner under S.66‑A of the Income Tax Ordinance, 1979 was not interfered by the Appellate Tribunal in circumstances.

Mian Muhammad Akram for Appellant.

Mrs. Sabiha Mujahid, D.R. for Respondent.

Date of hearing: 28th March, 2002.

ORDER

KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER).‑‑‑The petitioner‑assessee is engaged in the business of: manufacturing and sale of paper cone and has filed appeals against an order under Section 66A.

Brief facts leading to these appeals are that the assessee was assessed under section 80C for the assessment year 1996‑97 while for 1997‑98 and 1998‑99, the years under appeal, he opted out of the Scheme of Self‑Assessment being a manufacturer. The Assessing officer accepted this position and finalized the case under normal law and later issued refund due to the assessee after fulfilling the legal requirements.

The IAC considered the assessments as erroneous and prejudicial to the interest of revenue for the followings reasons:‑‑‑

"(1) That the assessee was a supply contractor and used to file return upto 1996‑97 in Circle 23 which had, jurisdiction over contractors. For the two years in appeal he filed returns in Circle 29 on the basis of location of his business.

(2) That the assessee jurisdiction was with Circle 23 while his assessment was finalized by Circle 29.

(3) That the assessee is not a manufacturer and has wrongly been assessed in connivance with the Assessing Officer.

(4) That the refund has been issued without due appreciation of the facts on record.

(5) That lesser G.P. Rate was applied and excessive expenses have been allowed."

The learned AR has argued the case at length. He has produced before us copy of his reply, which is detailed, and comprehensive. Challenging various objections, he has said that way of opting out from S.A.S., the assessee jurisdiction fell in Circle 29 on the basis of area and that the assessee is a manufacturer being involved in conversion of paper into paper cones. Further he has duly filed wealth tax returns and in substitution of wealth statement and that the issue of GP as well as of P&L account does not make an order as erroneous and prejudicial to the interest of revenue. This was in additi6n to his argument that even the C.B.R. had instructed to apply 9% GP on such cases as against 15% applied by the department in certain other cases. It 'was further argued that the refund for one year was issued after completing all legal requirements while for second year it was adjusted against the demand after the approval of the then IAC. The invocation of section 66A in his opinion was only substitution of an opinion which is not permissible under law.

The learned DR has vehemently supported the 6rder. In her opinion even after opting out from S.A.S. the assessee was legally bound to file return in Circle‑23. She remarked that the assessee status of being a supply contractor does not change even if he is a manufacturer. Further, if for earlier years the returns were being assessed in Circle‑23, the change of the jurisdiction of his own and filing of return in a different circle pre‑supposes some arrangement between the assessee and the officer who has made the assessment without proper appreciation of the documents.

We have heard both and have perused the record. So far as the argument regarding assessee being a manufacturer is concerned, the learned IAC has not discussed this matter properly. As to whether an order, can be cancelled by considering it as erroneous on the basis of lesser GP, allowance of more expenses and issuance, of refund these are settled issues. This Tribunal has never supported cancellation on the basis of mere difference of opinions. In this case, however a very prominent factor which has been pointed out by the learned DR is that even by opting out, the nature of the assessee business does not change. He still remains a supply contractor. His opting from Scheme of S.A.S. being a manufacturer, is only to opt for a normal assessment. It does not give him the right to suo motu change his jurisdiction at his own sweet will by saying that the area of his business falls in a particular jurisdiction. Even for these two years the jurisdiction of the case remained with the same Circle where assessments for the earlier years were filed. The filing of return in a different circle is erroneous and also prejudicial to the interest of revenue in term of proviso to section 66‑A. The proviso says that an order without jurisdiction becomes prejudicial to the interest of revenue suo motu. The assessee being hit by this proviso itself and the matter being that of jurisdiction, we have no option but to ignore all other arguments. The order has rightly been held to be as erroneous and prejudicial to the interest of revenue as the nature of the assessee business even after opting out remains that of the same and its assessment under normal law was also to be made by the ITO Circle 23. The cancellation, therefore, needs no interference at our stage.

The assessee appeal is hereby dismissed.

C.M.A./561/Tax (Trib.)Appeal dismissed.