Per Rasheed Ahmad Sheikh (Judicial Member)‑‑‑

(a) Finance Act (XII of 1991)‑‑‑

‑‑‑‑S.12(6)‑‑‑Wealth Tax Act (XV of 1963), S.17A,‑‑‑Corporate Assets Tax‑‑‑Assessment of Corporate Assets Tax‑‑‑Rectification‑‑‑Merger‑‑ Limitation‑‑ Assessee pleaded in appeal that the order passed was barred by limitation in terms of S. 17A of the Wealth Tax Act, 1963‑‑‑Validity‑ Soon after the receipt of the assessment order, assessee moved rectification application challenging the order sought to be rectified‑‑ Order originally made under S.12(6) of the Finance Act, 1991 having merged with the rectifying order, reckoning from the date of the order under S.12(6)(10) of the Finance Act, 1991 same was passed within the statutory limit of time.  

(b) Income‑tax‑‑‑

‑‑‑‑Acknowledgment receipt without rubber stamp of concerned office‑‑ Evidentiary value‑‑‑In absence of rubber stamp of the concerned office affixed on acknowledgment receipt/letter head pad same could not he accepted as valid piece of evidence.

Per Muhammad Sharif Chaudhry (Accountant Member), Muhammad Tauqir Afzal Malik (Judicial Member) agreeing with different reasons‑‑‑

(c) Finance Act (XII of 1991)‑‑‑

‑‑‑‑S.12(6)(7)(8)‑‑‑Corporate Assets Tax‑‑‑Non‑filing of return voluntarily‑‑‑Confusion by Circulars of C.B.R.‑‑‑Levy of penalty and additional tax ‑‑‑Validity‑‑‑Assessee did not file its return nor paid tax alongwith the return‑‑Penalty under S.12(7) and additional tax under S.12(8) of the Finance Act, 1991 was rightly charged by the Assessing Officer and confirmed by the First Appellate Authority‑‑‑Without indicating the circulars and without pointing out and identifying the confusion in such circulars, Appellate Tribunal could not hold that the circulars issued by the Central Board of Revenue created confusion in the minds of the taxpayers ‑‑‑Assessee could not be supposed to be confused and that he was under a bona fide impression that return was not required to be filed ‑‑‑Assessee having neither taken such plea in its grounds of appeal before the Appellate Tribunal nor in grounds of appeal before the First Appellate Authority nor during his arguments its contention regarding filing of returns of Corporate Assets Tax under S.12(2) of the Finance Act, 1991 was not proved‑‑‑No ambiguity existed on the issue that the appellant being a public limited company, quoted on stock exchange and running a textile unit, having the value of its fixed assets exceeding Rs.50 million was required under S.12(2) of the Finance Act, 1991 to file its return of Corporate Assets Tax and pay the said tax alongwith the return under S.12(5) of the Finance Act, 1991‑‑ Penalty and additional tax levied by the Assessing Officer under S.12(7) & (8) of the Finance Act, 1991 was, maintained by the Appellate Tribunal as the assessee failed to file its return of its Corporate Assets Tax.

I.T.A. No. 1872/LB of 1997; 2001 PTD (Trib.) 2969 and W.T.A. No. 154/LB of 1999 distinguished.

ICC Textile Ltd. v. Federation of Pakistan and others 2001 PTD 1557 = 2001 SCMR 1208 rel.

Per Muhammad Sharif Chaudhry (Accountant Member)‑‑‑

(d) Finance Act (XII of 1991)‑‑‑

‑‑‑‑S.12(6)‑‑‑Wealth Tax Act (XV of 1963), S.17A‑‑‑Corporate Assets Tax‑‑‑Application of S. 17A of the Wealth Tax Act, 1963 to a case of Corporate Assets Tax‑‑‑Section 17A of the Wealth Tax Act, 1963 was not applicable to a case of Corporate Assets Tax‑‑‑Section 12(6) of the Finance Act, 1991 clearly mentioned that only Ss.32, 23, 24, 25 & 35 of the Wealth Tax Act, 1963 shall be applicable to Corporate Assets Tax.

Per Rasheed Ahmad Sheikh (Judicial Member) [Minority view]‑‑

I. T. A. No. 1872/LB of 1997 ref.

2001 PTD (Trib.) 2969 and W.T.A. No. 154/LB of 1999 rel.

Dr. Sarshar Hussain for Appellant.

Nemo for Respondent.

Date of hearing: 13th March, 2002.

ORDER

RASHEED AHMAD SHEIKH (JUDICIAL MEMBER).‑‑ 1. This appeal at the behest of the asses see‑appellant is directed against order dated 25‑5‑2000 passed by CIT, (A): Zone‑III in respect of assessment year 1992‑93 whereby levy of Corporate Assets Tax under section 12(6) of the Finance Act, 1991 as well as charging of additional tax under section 12(8) and imposition of penalty under section 12(7) of the Finance Act, 1991 has been maintained by the First Appellate Authority.

2. It has been argued‑on behalf of the assessee that the learned appeal Commissioner was not justified in confirming the order passed by the Assessing Officer under section 12(10) of the Finance Act, 1991. He contended that the learned Appeal Commissioner has acted in flagrant violation of law in not appreciating the facts of the case in its proper perspective. He pleaded that the order passed by the Assessing Officer under section 12(6) of the Finance Act, 1991 was barred by limitation in terms of section 17A of the Wealth Tax Act because according to section 12 of the Finance Act, 1991 the provisions of Wealth Tax Act, 1963 regarding completion of assessment and re‑assessment are also governed to this Act. He stated that as per section 17A of the Wealth Tax, no order shall be passed beyond the period of four years from the end of assessment year in which the net wealth was first assessable or two years from the date of furnishing the return, whichever is later, whereas that has been passed much later to the period of limitation provided in this section. Also pleaded that the penalty imposed under section 12(7) of the Finance Act, 1991 at Rs.20,65,000, on account of delayed filing of the C.A.T.'s return, was not sustainable in law. According to him, the C.A.T.'s return was filed within due date in the office of the Assessing Officer and necessary proof in this regard was duly submitted before the Appeal Commissioner who brushed aside the same on the ground that rubber stamp of the concerned officer had not peen affixed on the letter head of the company upon which C.A.T. return was statedly got received. Further argued that imposition of penalty tinder section 12(7), amounting to Rs.20,65,000 which is more than four times of the principle amount of C.A.T. is highly 'uncalled for. According to him this treatment is very harsh and contrary to the existing law of wealth tax/income tax in this regard. So far as levy of additional tax of Rs.900,000 under section 12(8) of the Finance Act, 1991 is concerned, it has been contended that this. is also against natural justice rind existing provisions of Wealth Tax that the amount of additional tax should be more than the principle amount of tax. To substantiate this contention, the learned counsel for the assessee has also furnished copy of an unreported decision of the tribunal bearing I.T.A. No.1872/LB of 1997 assessment year 1992‑93 dated 25‑5‑1997 to submit that in similar and identical circumstances, charging of additional tax under section 12(8) and imposition of penalty under section 12(7) of the Finance Act, 1991 has been declared to be without lawful jurisdiction.

On the other hand the learned DR appearing on behalf of the department supported the orders of the two authorities below for the reasons recorded therein.

3. Perusal of the facts reveals that the appellant had failed to file C.A.T. return under section 12(2) of the Finance Act, 1991 which was statedly to have been filed within due limit of time. However, the assessment was finalized by the Assessing Officer under section 12(6) of the Finance Act. 1991 by adopting value of fixed assets of the company at Rs.11,19,30,368 upon which Corporate Assets Tax, amounting to Rs.10;00,000, was levied alongwith additional tax of Rs.12,40,000 under section 12(8) and penalty of Rs.20,65,000 under section 12(7) of the Finance Act, 1991. Soon after receipts of the demand notice, an application for rectification of the order made under section 12(6) of the Finance Act, 1991 was sought and the pleas taken, regarding filing of C.A.T. return within due limit of time as well as levy of additional tax under section .2(8) were not entertained. by the Assessing Officer in the absence of adducing any corroborating documentary evidence in this regard. The Assessing Officer, however, rectified his order on the point of adoption of value of fixed assets consequent upon which that was taken at Rs.9,70,93,567. Resultantly, the amount of levy of Corporate Assets Tax, the additional tax and also the penalty stood reduced. Against this order of the Assessing Officer the assessee filed appeal before the First Appellate Authority who for the reasons recorded in his order rejected the assessee's appeal in its entirely.

4. We have given anxious thought to the rival arguments advanced by the learned representatives appearing at the bar and we find the submissions of the learned counsel for the appellant regarding passing the order under section 12(6) of the Finance. Act, 1991 to have been made beyond the period of four years is devoid of any force. It is so because soon after receipt of the assessment order, the assessee moved a rectification application challenging the order sought to be rectified. Since the order originally made under section 12(6) of the Finance Act, 1991 stood merged with the rectificatory order, therefore, reckoning from that date the order under sections 12(6)/10 of the Finance Act, 1991 was made within the statutory limit of time.

5. So far as the next contention of the learned AR regarding filing of C.A.T. return within time is concerned, we also subscribe to the findings recorded by the Appeal Commissioner on this point. Had the assessee filed C.A.T. return within due limit of time, and signatures of the receipts clerk were secured on the company's letter head, he could have obtained certified copy of that letter from the office of the concerned Assessing Officer to substantiate the contention. This piece of evidence in the absence of rubber stamp of the concerned office affixed thereon cannot be accepted as valid piece of evidence. We, therefore, uphold the findings recorded by the Appeal Commissioner in this regard. Since, value of fixed assets of the company was exceeding the prescribed limit, as is laid down in the Finance Act, 1991, therefore, the Assessing officer was fully justified in charging Corporate Assets Tax of Rs.500,000 on the value of such assets.

6. Coming to the other contentions of levy of additional tax and imposition of penalty under the Finance Act, 1991, we find that the, C.B.R. had issued multiple circulars relating to C.A.T. which had created confusion in the minds of the taxpayers. Since, the charge of C.A.T. remained controversial and the situation was fluid, therefore, the assessee was under a bona fide impression on the basis of various circulars issued by the C.B.R. that his assets fell short of the prescribed limit of C.A.T. and the return was not required to be filed. Thus, the question of wilful neglect or default on the part of the assessee does not arise at all. We, therefore, hold that the assessee should not be penalized on account of misleading circulars on letters issued by the C.B.R. Following the ratio decidendi in the reported decision cited as 2001 PTD (Trib) 2969 and the one unreported decision of the Tribunal cited supra coupled with it another decision of the Tribunal bearing W.T.A. No.154/LB of 1999 order dated 12‑12‑1999, the imposition of penalty under section 12(7) as well as levy of additional tax under section 12(8) of the Finance Act, 1991 is held to be not sustainable and both the levies are, accordingly, deleted being not maintainable in the eye of law.

7. In the result, the assessee's appeal succeeds to the extent indicated above.

(Sd.)

(RASHEED AHMAD SHEIKH),

JUDICIAL MEMBER.

Dissenting Note:

MUHAMMAD SHARIF CHAUDHRY (ACCOUNTANT MEMBER).‑‑‑I beg to differ with my learned brother, the Judicial Member on the issue of penalty and additional tax levied under section 12 of Finance Act, 1991 as per discussion below:

2. Appellant is a public limited company quoted on stock exchange and is running a textile unit. Since the value of its fixed assets exceeded Rs.50 millions it was required under subsection (2) of section 12 of Finance Act, 1991 to file its return of Corporate Assets Tax and pay the said tax alongwith the return under subsection (5) of the said section. It has been established, the learned Judicial Member agrees to it, that the appellant did not file its return nor paid tax alongwith return under the above provisions of law. Therefore, penalty under section 12(7) and additional tax under section 12(8) is chargeable in the case of the appellant which have been rightly charged by the Wealth Tax Officer and rightly confirmed in appeal by the First Appellate Authority.

3. However, the learned Judicial Member has deleted the penalty as well as the additional tax on the ground that the C.B.R. had issued multiple circulars relating to C.A.T. which hail created the confusions in the mind of the taxpayers and thus the assessee was under a bona tide impression that the return was not required to be filed. I regret my inability to share this view of my learned brother. Without naming the circulars and without pointing out and identifying the confusion in these circulars, we cannot hold that the circulars issued by C.B.R. created confusion in the minds of the taxpayers. 'Furthermore, we cannot suppose that the assessee was confused and that the assessee was under a bona fide impression that return was not required to be filed. The assessee has neither taken this contention in its grounds of appeal before us nor in its grounds of appeal before the First Appellate Authority nor its AR has taken this plea during his arguments. Rather the assessee and its AR contend that return of C.A.T. was filed under subsection (2) of section 12, but this contention has been disproved as discussed supra. Hence the demand of penalty as well as additional tax, in my humble opinion, cannot be deleted.

4. Reliance on the judgment of the ITAT reported as 2001 PTD (Trib) 2969 and the unreported judgment of the ITAT in I.T.A. No.1272/LB of 1997 dated 25‑5‑1997 and W.T.A. No.154/LB of 1999 dated 12‑12‑1999 is not pertinent as these cases are not relevant. No principle or rule of law in these judgments has been laid down by the learned ITAT which can be universally applied to other cases. Rather the learned ITAT in each of these quoted cases has given relief on the basis of facts and circumstances specifically obtaining in that case. For example in I.T.A. No.1872/LB of 1997 it was contended by the assessee that work‑in‑progress under the head building plant and machinery and erroneously been added towards value of fixed assets and moreover, it was pleaded by the AR that the assessee was mislead by the ambiguous circulars issued by the C.B.R. Therefore, the ITAT gave relief to the assessee by deleting the penalty and the additional tax demand. But in the instant case, as discussed above, no such contention has been made by the appellant before us. Similar is the position of other two judgments of the ITAT.

It was pleaded by the AR of the assessee before us that action of the Assessing Officer was barred by time limit as levy of Corporate Assets Tax is governed by Wealth Tax Act of 1963 and the said Act in its section 17A lays down that no order can be passed after expiration of four years This plea of the assessee has been dismissed by my learned brother on the ground that the order originally made under section 12(6) of the Finance Act of 1991 stood merged with the order of rectification passed under section 12(10) of the said Act. Although I agree with my learned brother regarding dismissal of A.R's. said plea but I do not agree try the reason given by him. In my opinion this plea of the assessee is not sustainable because of the fact that section 17A of the Wealth Tax Act is not applicable to a case of Corporate Assets Tax. Section 12 of Finance Act, 1991 clearly mentions that only section 32, sections 23, 24, 25 and 35 of the Wealth Tax Act shall he applicable to Corporate Assets Tax.

5. On the basis of above mentioned submissions, I feel inclined to differ with my learned brother on the issue of deletion of penalty and additional tax in case of the assessee. In my opinion both these levies should be maintained.

Since difference of opinion has arisen between the learned Members of the Bench, it is requested that the case may be referred to the worthy Chairman for placing it before a third Member who should resolve the controversy. The controversy is on the following issue:

"Whether in the facts and in the circumstances of the case penalty and additional tax levied by the DCWT under sub section (7) and subsection (8) of section 12 of the Finance Act, 1991 respectively should be deleted or they should be maintained, when the appellant has failed to file its return of Corporate Assets Tax".

(Sd.)

(MUHAMMAD SHARIF CHAUDHRY),

ACCOUNTANT MEMBER.

(Sd.)

(RASHEED AHMED SHEIKH),

JUDICIAL MEMBER.

AS PER Mr. MUHAMMAD TAUQIR AFZAL MALIK (JUDICIAL MEMBER)

This difference of opinion has been referred' to me by the Honourable Chairman. The controversy is on the following issue:

"Whether in the facts and in the circumstances of the case penalty and additional tax levied by the DCWT under sub section (7) and subsection (8) of section 12 of the Finance Act of 1991 respectively should be deleted or they should be maintained, when the appellant has failed to file its return of Corporate Assets Tax".

I have gone through the judgments of both my learned brothers i.e. the learned Judicial Member and the learned Accountant Member and I tend to agree with the dissenting note of my learned Accountant Member and also agree with his arguments given in paragraphs 2, 3 and first portion of para. 4 which finishes with the following line:

"Similar is the position of other two judgments of the ITAT. "

While agreeing with the contentions of the learned Accountant Member, I will like to add that there was absolutely no ambiguity on the issue that the appellant being a public limited company, quoted on stock exchange and running a textile unit, having the value of its fixed assets exceeding Rs.50 millions was required under subsection (2) of section 12 of the Finance Act, 1991 to file its return of corporate assets tax and pay the said tax alongwith the return under subsection (5) of the said section. My this view is also supported by the rectification application of the assessee in which the Assessing Officer rectified his order on the point of adoption of fixed assets as per their balance sheet consequent upon which that was taken at Rs.9;70,93,567. Resultantly, the amount of levy of corporate tax, the additional tax and also the penalty stood reduced.

As a result of above discussion, I agree with the view point held by learned Accountant Member, Dr. Muhammad Sharif Chaudhry that "in the facts and circumstances of the case‑ penalty and additional tax levied by DCWT under subsections (7) and (8) of section 12 of the Finance Act, 1991 respectively should be maintained when the appellant has failed to tile its return of its corporate assets tax".

It will not be out of place to mention that vires of the Corporate Assets Tax, leviable under section 12 of the Finance Act, 1991, was challenged in, Civil Appeals Nos. 1345 to 1356, 1477, 1676 to 1681 of 1999 and 1225 of 2000 before the Honourable Supreme Court of Pakistan cited as 2001 PTD 1557 = 2001 SCMR 1208 titled as ICC Textile Ltd. v. Federation of Pakistan and others in which all the appeals were dismissed on 16‑3‑2001, upholding the powers of Assessing Officer to make assessment, impose additional tax and penalty.

As a result, appeal of assessee fails, hence dismissed.

C.M.A./451/Tax(Trib.)Appeal dismissed.