Income Tax Ordinance (XXXI of 1979)---

----S. 66-A---Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order ---Limitation---Assessee had contended that assessment orders were made on 4-5-1994 and 29-6-1996 respectively and notice under S.66-A of the Income Tax Ordinance, 1979 was issued on 20-6-2002 and orders passed' thereafter were barred by limitation as no action under S.66-A of the Income Tax Ordinance, 1979 could be taken in respect of an order made more than four years prior to its proposed revision---Department pleaded that original assessment orders were subject-matter of appeal and appeal effected the orders of First Appellate Authority even on 30-6-1998 and therefore, Inspecting Additional Commissioner's order were not hit by limitation ---Validity-- Mistake allegedly made by the Assessing Officer was never a subject matter of appeal before First Appellate Authority and limitation, in circumstances, had to start from the date of original assessment under S.62 of the Income Tax Ordinance, 1979---Original assessment orders to which the issues involved were the subject-matter of mistake, if any, having been made on 4-5-1994 and 29-6-1996 could not be revised beyond four years from these dates as had been done by the Inspecting Additional Commissioner vide his undated orders passed consequent upon his notice, dated 20-6-2003---Orders having been made beyond limitation were not maintainable in the eye of law and were cancelled by the Appellate Tribunal---Original assessments flamed under S.62 of the Income Tax Ordinance, 1979 and modified in appeals stood restored.

(1999) 79 Tax 273 (Trib.); (2000) 78 Tax 230 (Trib.); I.T.As. Nos. 78 and 79/KB of 1998-99; 2002 PTD 570 and 2000 PTD 207 ref.

Muhammad Amin, ACA for Appellant.

Jawed Iqbal Rana, D.R. for Respondent.

Date of hearing: 27^th August, 2003.

ORDER

MUHAMMAD AKHTAR NAZAR MIAN (ACCOUNTANT MEMBER).---These two appeals by the appellants company are directed against orders math by the learned IAC for the assessment years 1992-93 and 1993-94 under section 66A of the Income Tax Ordinance, 1979 (hereinafter called the Ordinance). Both the learned representatives have been heard and the orders of the authorities below perused.

2. The facts so far as relevant for disposal of these appeals are that on examining the assessment records of the appellant company, the IAC found that the orders made by the Assessing Officer originally under section 62 of the Ordinance in both the years under appeal were erroneous in so far as prejudicial to the interest of Revenue because the appellant company had failed to withhold tax under section 50(3) of the Ordinance in respect of Voyage Charter Expenses. Slot Charter Expenses and Time Charter Expenses paid to non-residents and the Assessing Officer without looking into this aspect allowed these expenses although these expenses were to be disallowed under section 24(b) of the Ordinance. Order of the learned IAC are contested on merit as well as on the point of limitation. We shall first take up the issue of limitation.

3. It is submitted by the learned AR that the IAC had rightly stated in his notice under section 66A that if there was a mistake made by the Assessing Officer as confronted by the IAC in his notice, the said mistake had been made by the Assessing Officer while passing the original order under section 62 of the Ordinance. He asserts that there is no. dispute that the original assessment orders for the assessment year 1992-93 and 1993-94 were made by the Assessing Officer on 4-5-1994 and 29-6-1996 respectively and the notice under section 66A issued on 20-6-2002 and orders passed thereafter by the learned IAC were barren by limitation as no action under section 66A could be taken in respect of an order made more than four years prior ~to its proposed revision. He asserts that the orders passed by the learned IAC much after the statutory period of four years were hit by limitation and therefore, the IAC orders were required to be cancelled.

4. The learned D.R. on his turn has supported the orders of the learned IAC by saying that original. assessment orders under section 62 for the assessment years 1992-93 and 1993-94 were subject-matter of appeal before the learned CIT(A) and appeals effects to the orders of the learned CIT(A) were given for both the years on 30-6-1998 and therefore, the IAC's orders under section 66A made on 30-6-2002 were not hit by limitation.

5. We have considered the arguments of both the learned representatives and we find ourselves in agreement with the arguments advanced by the learned A.R. We have noticed that the mistake allegedly made by the Assessing Officer was never a subject-matter of appeal before the learned. CIT(A) and therefore, the limitation in these circumstances has to start from the date of original assessment under section 62. In this regard we are fortified by cases reported as (1999) 79 Tax 273 (Trib.), (2000) 78 Tax 230 (Trib.) and unreported case in ITA Nos. 78 & 79/KB of 1998-99 decided on 22-9-1998. Coming to these conclusions we have also sought guidance from the cases reported as 2002 PTD 570 (H.C. Kar.) and 2000 PTD 207 (H.C. Kar.).

6. We, therefore, hold that the original assessment orders to which the issues involved were the subject-matter of mistake, if any, having been made on 4-5-1994 and 29-6-1996 for the respective assessment years 1992-93 and 1993-94 could not be revised beyond four years from these dates as has been done by the IAC vide his orders undated passed consequent upon his notice, dated 20-6-2002. The orders by the learned' IAC having been made beyond limitation are not maintainable in the eye of law and are hereby cancelled. The result is that the original assessments as framed by the Assessing Officer under section 62 of the Ordinance and modified in appeals under section 132 stand restored. Since the IAC's orders have been cancelled on the point of limitation we need not take up the other issue of merits.

7. The appeals succeed in the manner indicated above.

C.M.A./960/Tax (Trib.)Appeals accepted.