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

----S.5---Jurisdiction of Income-tax Authorities---Assistant Commissioner of Income Tax at K was stopped by the Deputy Commissioner of Income fat at F not to frame the assessment of Association of Persons at K, even after the completion of such assessment by the Assistant Commissioner of Income Tax of K---Validity---Deputy Commissioner of Income Tax F had proceeded against law---Section 5 of the Income Tax Ordinance, 1979 provided that Deputy Commissioner of Income Tax at F was bound to refer the matter to higher Authorities but he did not do so and took up the case on his own behalf and violated established law in careless manner---Deputy Commissioner of Income Tax F was not justified to usurp the jurisdiction of the Assistant Commissioner of Income Tax K without referring the matter to higher Authorities---Even the jurisdiction was usurped after the assessment had been finalized-- By doing so he had exercised the appellate powers which were not vested in and such-like action on his behalf was null and void.

PLD 1982 SC 135 ; 1993 PTD (Trib.) 266 and PLD 1990 SC 1070 rel.

(b) Partnership Act (IX of 1932)---

----S. 4---"Partnership", "partner", "firm' and "firm name"-- Definitions ---Equal capital contribution not a condition---Section 4 of the Partnership Act, 1932 does not require that while entering into partnership agreement every partner must have to contribute equal share of capital or have a voice in the management of business proportionate to his capital contribution---Partnership deed executed in presence of witnesses cannot be discarded by the Assessing Officer merely on whims and surmises.

(c) Income-tax---

----Evidence---Remarks that "nowadays nobody is ready to trust upon anybody" is merely assumption and nothing else which cannot be considered as evidence.

(1962) 5 Tax 126 (Trib.) and PLD 1951 Dacca 56 rel.

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

----S. 65---Additional assessment---Reopening of assessment on the ground that assessee was doing octroi business while the assessee denied the conduct of such octori business ---Validity---Assessee was dealing in scrap commission and there was absolutely no octroid business---Action of Assessing Officer in reopening assessment under S.65 of the Income Tax Ordinance, 1979 was vacated by the, Appellate Tribunal.

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

---S. 65---Additional assessment---Reopening of assessment on the basis of concealment of Bank accounts which was-duly declared in the case of association of Persons and considered/discussed in the assessment order by that Assessing Officer having the jurisdiction over the case of Association of Persons---Validity---Since the assessee had declared the two Bank accounts in the returns filed at place K against which an assessment order was also finalized under S.62 of the Income Tax Ordinance, 1979, reopening of assessment finalized under S.59(1) of the Income Tax Ordinance, 1979 by Deputy Commissioner of Income Tax at F without having lawful jurisdiction over the case, was double taxation which was not sustainable in the eye of law---Assessee by declaring Bank accounts in the returns filed at K had discharged his liability and there was no concealment on his behalf---Since the Bank accounts had been taxed twice, subsequent assessment framed under Ss.65/62 of the Income-Tax Ordinance, 1979 was double assessment which was liable to be vacated---Order passed by the Deputy Commissioner of Income Tax at F as well as First Appellate Authority was vacated by the Appellate Tribunal and that finalized under S.59(1) of the Income Tax Ordinance, 1979 was restored.

PLD 1972 SC 271; (1964) 9 Taxation 350; (1967) 16 Tax 43 (Trib.) and (1997) 35 Tax 59 ref.

Javed Iqbal and Saqib Bashir, ITP for Appellant.

Ahmad Kamal, D.R. for-Respondent.

Date of hearing: 21st June, 2003.

ORDER

ZAFAR ALI THAHEEM (JUDICIAL MEMBER).---These further appeals pertaining to assessment years 1996-97 to 1998-99 have been filed at the instance of the assessee against the consolidated impugned order, dated 25-7-2001 recorded by the CIT (Appeals) Zone-III,- Lahore. As per memo of appeal number of grounds have been taken, however, main gist of the same is that the assessee is aggrieved by confirmation of reopening of assessment under section 65 of the repealed Income Tax Ordinance, 1979.

2. Briefly facts of the case are that the assessee in this, case is a Director of Messrs Aala Processing Industry (Pvt.). Limited, Faisalabad. Assessment pertaining to assessment years under appeal were finalized under section 59(1) of the Income Tax Ordinance, 1979 as per break-up given blow:--

Later on the Assessing Officer came to know that assessee was maintaining two bank accounts at Habib Bank Limited, A.G. Zurich, Davis Road, Lahore, one Account No. 201116-112372 in his own name and another Account No.201116-144721 was jointly operated with his brother Mr. Muhammad Yousaf Amin. The assessee was confronted with these bank accounts through a notice issued by DCIT against which reply submitted by the assessee was (ejected. Consequently, notice under section 65 was issued by the Assessing Officer for the assessment years under consideration against which explanation filed by the assessee with regard to the said two bank accounts was rejected. Therefore, show- cause notices under section 13(1)(c) were issued which were replied by the assessee for the assessment years 1997-98 and 1998-99. However, no explanation was filed for the assessment year 1996-97. The perusal of statements of the bank accounts mentioned supra revealed the presence of deposits relevant to the assessment years under consideration, the break -up of which is given as under:--

CLOSING BALANCE

PEAK CREDIT BALANCE

It was also noted by the Assessing Officer that the assessee was engaged in the business of octroi contract. Therefore, after discarding the expla nation filed by the assessee against the notices issued by the Assessing Officer on different occasions, the assessments were reopened and treat ing the peak deposits in the bank accounts maintained by the assessee and alongwith his brother Mr. Muhammad Yousaf, the concealed income reopened the assessments and finalized the same under section 65/62 of the Income Tax. Ordinance, 1979 in the following manner:

Assessment year 1996-97

Assessment year 1997-98

Assessment year 1998-99

3. Against the treatment meted out by the Assessing Officer the assessee preferred appeal before the CIT (Appeals) Zone-II, Lahore, who confirmed the action of Assessing Officer in toto but set aside the case on the issue regarding set-off the addition made under section 13(1)(aa) on account of peak deposits should be allowed against the trading addition determined from octroi business.

4. The learned AR of the assessee has vehemently argued that reopening of assessments under section 65/62 of the Income Tat Ordinance, 1979 by the Assessing Officer on the basis of two bank Account Nos.201116-112372 in the name of the assessee and other Account No.20-1116-144721 jointly operated by the assessee with his brother Mr. Muhammad Yousaf Amin at Habib Bank Limited A.G. Zurich, Davis Road, Lahore and that the assessee is engaged in the business of Octroi is quite unjustified and contrary to the facts of the case. He pleads that while doing so he has totally ignored this material aspect of the case that the above said bank accounts were declared in the returns of AOP filed at Kasur. He further elaborates that Messrs Ittehad Traders Commission Agents, Basti Chiragh Shah, Kasur, was an AOP formed on the basis of partnership executed ,on 13-6-1993 at Kasur amongst 7 partners. The members specifically authorized Mr. Mohsin Bilal; to open and operate bank accounts in his own name, or jointly with other partners. Two accounts were opened in Habib Bank A.G. Zurich, Davis Road, Lahore, one in the name of assessee and the other jointly with Mr. Yousaf Amin. Returns were filed by the AOP disclosing two bank accounts at Habib Bank Limited. A.G. Zurich., Davis Road, Lahore, bearing No.201116-112372 and 201116-144721. After examination the case in detail, ACIT/W.T. Circle-19 Kasur passed the first orders for assessment years 1995-96 to 1998-99 on 31-5-1999. In order to lend credence to his version he has furnished before us photocopies of assessment order, dated 31-5-1999 and challan showing tax deposited amounting to Rs.101,848. He maintains that the DCIT Faisalabad passed the controversial impugned orders in respect of the same years. These second orders have been passed under section 65/62 on 12-6-2000. The original assessments finalized under section 59 at Faisalabad have been reopened for the alleged reason that Mr. Mohsin Bilal did not declare the bank accounts at Faisalabad, which is double assessment. Mr. S.M. Zafar, the distinguished lawyer says at P.481 of his book "Understanding Statutes" Taxing same individual or property twice for the same purpose, by the same Government body and by of the same kind, in the same year amounts to double taxation taxation is not permissible." Mr. Aamir Raza another famous jurist in his book on C.P.C. has explained the rationale behind the concept of Res judicata and Estoppel. All suits are based upon a cause of action and upon judgment being pronounced the cause of action merges into the judgment and thereafter, the same cause of action cannot sustain a second suit, for it no longer exists. It is by virtue of the force of the doctrine of res judiciata that judgments are final and conclusive inter-parties with regard to matters decided. But for this rule there would be no end to litigation. The term res judicata signifies that the matter in dispute has been considered and finally settled and that the adjudication has a conclusive effect upon the rights determined.

5. He further contends that reopening of assessment against already finalized assessment at Kasur the DCIT Faisalabad has usurped the jurisdiction of ACIT Kasur who had right to assess the bank accounts of the AOP Messrs Itthed Traders who had lawful authority to probe into the bank accounts and finalize assessment in case of AOP Messrs Ittehad Traders which fell in his jurisdiction. This usurpation is a nullity in the eye of law, in the light of reported decision as PLD 1982 SC 135. He contends that according to law if some dispute over jurisdiction occurred the DCIT Faisalabad was bound to refer the matter to higher authorities but by not doing so he has clearly violated the section 5, which provides the mechanism in which DCIT must proceed in such situation. This has been elaborately discussed in a reported judgment cited as 1993 PTD (Trib.) 266. But by ignoring the clear law laid down in section 5 of the Income Tax Ordinance, 1979 has erroneously held the lawful assessment passed by ACIT Kasur null and void, as sections 2 and 65 did not vest in him such authority. He has emphasized that impugned assessment order has become illegal in the light of a reported case cited as PLD 1972 SC 271.

6. The learned AR has also contended that the DCIT in his order' passed under section 65/62 has tried to prove the partnership deed to be illegal. He submitted that Partnership Act was passed in 1932. Section 4 of which lays down the requirements 'and the ingredients of a valid partnership. It is important to note that despite passage of 71 years no change or amendment has been made in this very important section. This shows that the law-makers have been convinced all along that the concept of a partnership is as valid today as it was in 1932. It was not felt expedient to direct that each partner much bring, capital, proportionate to his share of profit or loss. Nor that he should have a voice in the management of business proportionate to his capital contribution. These and other matters were left to the partners, who are supposed to be legitimate guardians of their interest. It has been held in many judgments that department has no right to tell assessee how, to do business. In a landmark decision, 1964, 9-Taxation 350 Amin Match Works, Mr. Justice Hamood ur Rehman of Supreme Court of Pakistan had this to say "under section 26-A of the Income Tax Act, two conditions have only to be satisfied, firstly, that the firm has been constituted under an instrument of partnership, and, secondly, that the instrument has specified the shares of the partners. If these two conditions are satisfied, the firm is entitled to registration." Partners may have different abilities. One or some may have capital, but no business acumen, or the energy and youth to conduct it. Another, may be endowed with the latter, but may lack the capital. So it has been left to them to decide these matters as per the following reported judgments:--

(a) (1962) 5 Tax 126 (Trib.) in which it was held that one partner can be given exclusive right to operate Bank account.

(b) (1967) 16 Tax 43 (Trib.) in which it was held that one partner can be given exclusive right to manage the business affairs.

He further refers to PLD 1951 Dacca 56, in which it has been held that Partnership Act does not require that a partner must contribute money or capital. These judgments flow from the Supreme Court judgment quoted before. No artificial curbs or restraints can be placed on partners. The adverse conclusions drawn by DR regarding control and management of business by one partner who did not contribute any money are against the judgments of the superior Courts. Ittehad Traders Scrap dealers, was a valid AOP duly constituted in accordance with a written partnership deed; dated 13-6-1993 and no objection or doubt can be raised against it because if fulfilled the above cited both mandatory conditions identified by the Mr. Justice Hamood ur Rehman in Amin Match Works. Dacca. A copy of the said partnership deed has also been furnished before us.

7. On the issue of Octroi business which has been alleged to be conducted by the AOP at Kasur, the contention of the learned AR is as under:--

(i) From start to end of the assessment proceeding the assessee has vehemently denied of doing any octroi business. An affidavit was also filed before DCIT Faisalabad. Octroi contract can only be given by a Government agency under a duly executed contract deed. An initial security deposit is an essential requirement. Law requires deduction under section 50(7A) and under section 80(c) this deduction is considered final discharge of liability. DCIT ignored all these provisions of law while dealing with the issue.

(ii) The receipts have been considered as octroi receipts. Then there is no question of unexplained "peak deposits". The octroi receipts are not supposed to be unexplained.

(iii) If at all the DCIT had to choose assessee's peak deposits in 1996-97, there was no justification for making a second addition of peak deposit in the joint account The amount assessed in individual account would cover that. There can be only one "beak".

(iv) Lastly, the DCIT has given no rational basis for determining business income from so-called joint account.

He contends that in the show-cause notice, dated 15-9-1999, DCIT had said, "the investigation made in this regard shows that you also remained engaged in the business of octroi, which is again an act of concealment of income on your part" but no such investigation or evidence had ever been confronted. The DCIT Faisalabad has proceeded entirely on suspicion-and in1he absence of any found action Courts do not favour such an attitude. Seonath Singh v. Appellate Assistant Commissioner, is a case decided by Supreme Court of India and reported as 1997 35 Tax 59 (SC Ind). The assessee declared sale of shares having value of Rs.2,065,705 in 1945-46 Assessment for 1942-43, 43-44 and 44-45 were reopened. Before Supreme Court, following two reasons were given on behalf of department:--

"(a) The assessee who is or was at the relevant time a Managing Director in about a dozen limited companies alongwith `Oberois' is believed to have made some great profits which were not offered for assessment.

(b) The assessee is believed to have received a sum of Rs.22 lac from `oberois' and this sum or at least part of which represents income which has escaped assessment".

About these the Supreme Court "held, that the two reasons given for the belief formed by the Income Tax Officer, hopelessly failed to satisfy the requirements of section 34(LA). The so -called reasons were stated to be beliefs thus leading to an obvious self-contradiction. There was no material or fact which had been stated on which any belief could be founded of the nature contemplated by section 34(LA). We are satisfied that the requirements of section 34(LA) were not satisfied, and, therefore, the notices which had been issued were wholly illegal and invalid".

In the result, the appeal is allowed ..The writ petition succeeds to the extent that the impugned notice shall stand quashed. The assessee shall be entitled to his costs. Copies of this order appropriately underlined have been submitted.

8. The AR has provided copies of bank statements of Goreja Steel Mills (Pvt.) Limited with MCB and Soneri Bank to show that regular payments through cheques were made by Goreja Steel Mills in respect of Steel Scrap supplied to them. This conclusively proves that the business of the AOP as claimed and assessed at, Kasur was that of scrap and that there was absolutely no octroi business. He therefore, prays that notice issued tinder section 65 by DCIT Faisalabad may please be quashed, and the assessee may also be awarded the costs.

9. The learned DR has argued that the most important legal point of the Revenue (upon which the whole case hinges) is that none of these accounts was ever declared by the assessee in the Wealth Tax return filed for 1996-97 to 1998-99. This constitutes definite information and is a case of concealment within the ambit of section 65(2) proviso of the Income Tax Ordinance, 1979. The learned CIT(Appeals) on page 4 at para 2 has observed the following:--

"The assessee maintained two bank accounts which were not declared in the income tax record. Hence the concealment was committed. Therefore, the action under section 65 is upheld".

He further contends that the arguments of the worthy AR of the assessee crumble down the factum of the existence of so-called or alleged AOP Ittehad Traders Scrap Commission Agent, Kasur which is proved from the following observations of the CIT(Appeals) page 3 last para:--

"These appeals were fixed first time for hearing on 30-4-2001 for 16-5-2001 for which adjournment was sought by the assessee for 28-5-2001. On 26-5-2001, another application for adjournment came and the case refixed for 12-6-2001. On this date neither attendance nor, adjournment was there by the assessee. The case was lastly fixed on 17-7-2001 for hearing on 25-7-2001. Nobody attended and the appeals were decided ex parte on merit."

He states that it is very clear from the outset that all the arguments put forth by the worthy AR carry no weight. He says that CIT(Appeals) should pass the order ex parte. It is due to non-cooperative, tax-evasive attitude and the wrong jurisdiction of so-called AOP (assessed at Kasur) without jurisdiction by the assessee being conducive to the dictum that:--

"Justice delayed is justice denied."

According to him the assessee being a Director (Mohsin Bilal C/o Aala Processing Industries (Pvt.) Limited Faisalabad being assessed since 1994 was rightly assessed by DCIT Faisalabad because the company is already being taxed thereunder C.B.R.'s jurisdiction. Secondly DCIT Circle-10 Companies Zone, Faisalabad, Haji Muhammad's letter No.53, dated 28-9-1999 addressed to ACIT Kasur clearly stopped ACIT Kasur after examining record not to frame the assessment of AOP at Kasur. He further argued that the order-sheet entry, dated 4-9-1997 in AOP's file TR 109 Ittehad Traders Scrap Commission Agent, Kasur reads as under:--

"Issue notice under section 56- for 21-4-1997 for Assessment year 1995-96 to 1996-97 this very entry is embodiment of contradiction and also shows undue haste in getting assessment finalized".

Notice under section 56 issued by the ITO Kasur is dated 9-4-1997 in assessment years 1995-96 and 1996-97. Since no suo Motu returns were filed by the assessee, hence notice under section 56 was issued. Secondly it is interestingly enough that no previous assessment or any subsequent assessment was made by ITO Kasur after assessment order, dated 31-5-1999. He states that all this shows that the assessee had no scrap business at Kasur in reality before or after or at the time of assessment. The plea of the ass6ssee regarding double assessment is fallacious and untrue. He argued that surprisingly, after opening his bank account with Rs.500, Mr. Mohsin Bilal is maintaining huge peak credit of crores and acting as manager without any authority in Kasur. AOP business is against the five human senses. It is against common sense which is the best sense. It is said that some are wise some are otherwise. Further being a member of so-called AOP no such share was declared in the Faisalabad files. The plethora of case-law quoted by the AR that the AOP had authorized Mr. Bilal to operate the huge bank accounts is irrelevant here. It is like linking superman or imaging or illusionary powers with normal human legal working. Today nobody would authorize any body blindly trusting him to maintain huge bank account without self-interest. In fact the bank account representing concealed asset of the ass essee which was taxed under section 65/62 and upheld by CIT (Appeals) is in accordance with law. How is it that an assessee being assessed initially under SAS showing only salary and agricultural income is not declaring two bank accounts. Then the assessee is trying in vain to take double advantage of creating an alleged AOP at Kasur and authorizing himself through the imaging/super natural AOP which is evident as per false order-sheet entry in Kasur file 56 which depicts wrong dates and non-documentation at CIT (Appeals) level. All these facts clearly, show the genuineness of departmental view point and tile judicious assessments at Faisalabad.

10. We have given conscious consideration to the arguments put forth by the representative on behalf' of rival parties and also carefully gone through the relevant record. First of all we have to ascertain from record that whether the above said two bank accounts at Habib Bank Limited AG Zurich, Davis Road, Lahore which is the main basis of reopening of assessments under section 65 were ever disclosed or concealed by the assessee in order to avoid proper taxation. In this regard the DR negates the disclosure of said bank accounts whereas the AR claims declaration of the same in the returns filed on behalf of AOP Circle-19 at Kasur and in order to lend credence submits before us a copy of assessment order, dated 31-5-1999 finalized under section 62 of idle Income Tax Ordinance, 1979 by the CIT/WT Circle-19 Kasur the relevant portion of which is given as under:--

"The assessee has received the payments against the commodity purchased through cheques excepting a few payments in cash which too stated to have been deposited in the bank account of Mr. Mohsin Bilal and a joint account maintained by two members of AOP namely Mohammad Yousaf Amin and Mohsin Bilal in the same bank i.e. Habib Bank A.G. Zurich, Davis Road, Lahore."

11. The bare reading of the above mentioned paragraph supports the contention of the AR and this aspect of the case stands established that by not declaring the impugned two bank accounts in the returns filed at Faisalabad the assessee had neither committed any concealment nor he intended to avoid proper taxation. Since the impugned two bank accounts were properly disclosed in the returns filed at Circle-19 Kasur against which assessment under section 62 was finalized by the ACIT Circle-19, Kasur at a net income of Rs.88,000, Rs.236,000, Rs.197,250 and Rs.286,500 for the assessment years 1995-96, 1996-97, 1997-98 and 1998-99 respectively therefore, question of non-disclosure of the two bank accounts at Habib Bank Limited A.G. Zurich, Davis Road, Lahore does not arise. While sorting out the relevant record available before us it has come to our notice that in reply to notice issued by the DCIT Faisalabad under section 65 of the Income Tax Ordinance, 1979 and under section 17 of the Wealth Tax Act, 1963, it was apprised to the Assessing Officer by the assessee that the bank accounts were declared in the returns filed in Circle-19 Kasur as per contents reproduced below:--

"The balance in the alleged bank accounts pertain to an Association of Persons namely Messrs Ittihad Traders Scrap Commission Agent, Kasur which is an existing assessee of Income Tax in Circle-19 Zone-B, Lahore. The said bank accounts were declared in the returns of the said Association of Persons considered and admitted by the concerned Assessing Officer. The matter may be confirmed from the said circle."

12. In view of the above contents of the said letter written by the assessee to DCIT as well as affidavit filed, it is beyond our understanding that what prevented the Assessing Officer for not admitting the contention of the assessee regarding declaration of bank accounts and on what basis he rejected the same is nothing except assumptions and presumptions. When this fact was confronted to the DR during the course of hearing he said that ACIT Kasur was stopped by the DCIT Faisalabad not to frame the assessment of AOP at Kasur vide Letter No.53, dated 28-9-1999. It is a joke for us that the DCIT Faisalabad is prohibiting the ACTT Kasur vide letter, dated 28-9-1999 whereas assessment was finalized in respect of AOP at Circle-19 Kasur vide order, dated 31-5-1999. Such act on behalf of the DCIT Faisalabad is surprising enough that the ACIT is being prohibited by the DCIT after the completion of job. Suppose for a moment that the DCIT prohibited the ACIT for not framing the assessment at Kasur but here lies a point whether he was authorized to do so in the capacity of DCIT. In such-like situation the section 5 provides mechanism in which the DCIT must proceed which is reproduced as under:--

"5(1)(b) Provided that the Central Board of Revenue may by general or special order in writing direct that the jurisdiction of the Commissioners exercising the powers of an Appellate Additional Commissioner and the Appellate Additional Commissioner shall be determined by the Regional Commissioner:

Provided further that the Regional Commissioner may transfer jurisdiction in respect of 'cases or persons from one Commissioner subordinate to him to another.

5(4) Where a question arises as to whether Deputy Commissioner has jurisdiction to assess any person, the question shall be determined by the Commissioner or where the question is one relating to the jurisdiction of different Commissioners by the Regional Commissioner or Regional Commissioners concerned and if they are not in 'agreement, by the Central Board of Revenue. "

13. In view of the provisions contained in section 5 above an inference can easily be drawn that by doing so the DCIT has proceeded against the law. According to the clear cut provisions of section 5, he was bound to refer the matter to higher authorities but he did not do so and took up the case on his own behalf and violated established law in careless manner. In this respect reported judgment cited as PLD 1982 SC 135 has been referred before us. In order to ascertain the applicability of the same we deem it proper to reproduce the ratio of the above referred judgment:

"S. 20(1) and Supplementary Settlement Scheme No.II, Cl. 24, proviso second, read with Chief Settlement Commissioner's Memorandum No.2773-64/6225-R and Constitution of Pakistan (1973), Art. 185(3)---Allotment of evacuee land, validity of Review-Jurisdiction-Appellant's writ petition dismissed on ground of land in dispute being situated in urban area, appellants being holders of verified claims of rural agricultural land not entitled to settlement of their claims of rural agricultural land not entitled to settlement of their claims in urban area lands- Appellants and some other temporary allottees submitting revision petition before, Chief Settlement Commissioner, predecessor-in-interest Of respondents not impleaded in such Petition, and such officer ordering land in dispute to be confirmed in name of appellants and their co-allottees and also holding land to be not an urban area-Opposite party filing writ petition against such order, but previous Chief Settlement Commissioner, having been transferred his successor requesting High Court for adjournment taking up matter suo motu, setting aside order of his predecessor-in-interest-High Court on writ petition filed by other party holding proviso second having been added subsequent to allotment in favour of respondents same could not affect rights already vested particularly when no retrospective effect given to it-Division Bench holding allotments in favour of respondents to be in accordance with law---Held: Dismissal in limine of writ petition against order of former Chief Settlement Commissioner giving finding in favour of appellants did not give any finality to his order but instead impliedly approved order passed by successor Chief Settlement Commissioner-Order of previous Chief Settlement Commissioner being wholly without jurisdiction and performed in colourable exercise of jurisdiction or unlawful usurpation of jurisdiction, non-existent in eye of law hence order of High Court not open to exception."

14. On the issue of jurisdiction another reported judgment cited as 1993 PTD (Trib.) 266 also endorses our view point, the relevant portion of which is as under;--

S. 5(4)---Jurisdiction of Income Tax Officer challenged by assessee-Income Tax Officer was not bound to refer the matter to the Commissioner or to subsection (3) of section 64 of the repealed Income Tax Act, 1922 the ITO is bound to refer the matter to the Commissioner, or Commissioner or Regional Commissioner or Central Board of Revenue as the case may be for determining the question of jurisdiction. We are also unable to agree with the contention that as soon as objection is raised to the jurisdiction of an Assessing Officer he becomes defunct because it was not the position even under the repealed Income -tax Act, 1922 as it was provided in the third proviso to subsection (3) of section 64 of the repealed Income Tax Act, 1922 that if ITO is not satisfied with the correctness of the claim of an assessee in respect of the place of assessment when it is called in question he will refer the matter for determination under this subsection before assessment is made. It meant that if an objection was raised, in the first instance it was to be considered by the Assessing Officer and if he is satisfied with the correctness of the claim he may initiate proceedings for the transfer of case and in case he is not satisfied then he should state his reasons for his non-satisfaction and refer the matter for determination to the officer/officers concerned. The similar situation prevails under the Ordinance. If any objection is raised to the jurisdiction of an Income Tax Officer to assess any person and if the Assessing Officer agrees with the objection then he will initiate proceedings for transfer of case to the Assessing Officer having jurisdiction. If he does not agree with the objection only then the question will arise, as to which Income Tax Officer has jurisdiction to assess an assessee and in that case the Assessing Officer may refer the question himself to tile Commissioner/Commissioners/Regional Commissioners for determining the same or he may stay the proceedings and ask an assessee to apply to the officer concerned for determining the question. In either case When the question of jurisdiction is pending consideration before the Commissioner/Commissioners/ Regional Commissioners the 'proceedings before an Assessing Officer shall be kept in abeyance. However, if the question of jurisdiction already stands determined by the authorities concerned contemplated in the Ordinance and thereafter an objection is raised to the jurisdiction of an Income Tax Officer to assess any person in that event the Income Tax Officer shall neither become defunct as contended by Mr. Masood Ahmad Abbasi nor he would be required to stay the proceedings and make reference again for determining the objection. In such eventuality the Assessing Officer shall be within his right to overrule the objection and proceed with the assessment for the simple reason that the question already stands determined."

15. After giving anxious consideration to the ratios of the above mentioned reported judgments, it becomes crystal clear that on the issue of jurisdiction the DCIT was not justified to usurp the jurisdiction of the ACTT Circle-19, Kasur without referring the matter to higher authorities. Since he has not done so, therefore, his usurpation of jurisdiction cannot be endorsed at all by us. It is pertinent to note that the DCIT Faisalabad usurped the jurisdiction of ACTT Kasur after the assessment had been finalized. From this attitude of the DCIT an inference can be easily drawn that by doing so he has exercised the appellate powers which were not vested in him and such like action on his behalf becomes null and void in the light of reported judgment cited as PLD 1990 SC 1070:--

"Under the Law Minister for Consolidation has no jurisdiction or authority to pass any order in respect of consolidation scheme already confirmed under the law against which all objections and judicial proceedings in the nature of appeals and revisions had already been exhausted and disposed of. The order of Minister for consolidation, was, therefore, wholly without jurisdiction and void ab intio. Law is firmly settled that if the basic order is without lawful authority, whole series of such orders together with superstructure of rights and obligations built upon them fall to the ground. In this view of the matter merely because in pursuance to the Minister's void order the village has been re-consolidated, is no ground to maintain the said order."

16. In rebuttal to objection raised by the DR that till 28-9-1999 the assessment order under section 62 of the Income Tax Ordinance, 1979 was not passed by the ACIT Circle-19, Kasur, the sole contention of the AR is that after passing the assessment order, dated 31-5-1999 Mr. Rasheed Ahmad, ACIT, author of the said assessment order was transferred from his Circle-19 to Circle-06 on 13-7-1999 by the Commissioner of Income Tax Wealth Tax, Lahore Zone-B, Lahore. Again the departmental representative has tried to misdirect the Court because the officer transferred from his jurisdiction to another cannot pass the order in previous dates. From this fact on record it becomes crystal clear that the assessment order under section 62 was framed in the month of May, 1999 and not after the month of September, 1999 as claimed by the Revenue. On this score too, the reopening of assessment merits vacation.

17. The learned DR has also called in question the authorization of Mr. Mohsin Bilal to operate the huge bank account on the plea that in these days nobody is ready to blindly trust upon anybody to maintain huge bank account without interest. In this respect we do not find ourselves in agreement with the objection raised by the DR because according to section 4 of Partnership Act, 1932 there is no requirement of law that while entering into partnership agreement every partner must have to contribute equal share of capital or have a voice in the management of business proportionate to his capital contribution. Since the partnership deed had been executed amongst members of AOP in the presence of witnesses therefore, there was no cogent reason left with the Assessing Officer to discard the same merely on whims and surmises. The contention of the learned DR that now a days nobody is ready to trust upon anybody is merely assumption and nothing else which cannot be considered as an evidence. Revenue documents like sale-deed in respect of properties, gift-deed, rent-deeds and partnership-deed etc. all executed on stamp paper in the presence of witnesses are sacred documents, which are valuable in the eye of law. The contentions on the issue under consideration are elaborative and lend credence from the reported judgments cited as (1962) 5 Tax 126 whereby it has been held that one partner can be given exclusive right to operate bank account. In the light of said judgment, authorization of Mr. Mohsin Bilal to operate bank account at Habib Bank Limited A.G. Zurich Davis Road, Lahore is quite justified which cannot be called in question at all on the basis of surmises and conjectures. This view point taken by us has also been endorsed in a reported judgment, dated 5-6-1965 pertaining to I.T.As. Nos. 556 and 557 of 1965-66, the relevant portion of which is reproduced as under:--

"Income Tax Act, 1922 (XI of 1922)-Section 26A-Firm Registration Partnership-Exclusive rights given to some partners to manage affairs of the firm, to operate bank account and to enjoy the goodwill and assets of the firm-Whether invalidates the partnership-Held no."

Our finding on the sanctity of partnership deed and authorization of Mr. Mohsin Bilal for operating bank accounts also lends credence from reported judgments cited as PLD 1951 Dacca 56, the relevant portion of which reproduced as under:--

"The Partnership Act does not require that a partner must contribute money or capital; one can become a partner without contributing any capital and may only share profits and need not share any losses".

18. Now we come to the issue regarding octroi business which is also sole basis for reopening of assessments. The AR of the assessee has denied the conduction of octroi business whereas the DR is insisting for doing of the same by the assessee. The DR has argued that by not disclosing the octroi receipts the assessee has made concealment. On (Court query that what is the rational basis of the claim of the Revenue for conducting octroi business by the assessee, the DR could not satisfy us with documentary evidence. However, we find ourselves in agreement with the contention of the learned AR that during the period under consideration the assessee only earned commission from dealing in scrap and not from octroi business. We see that business of the assessee does not fulfil the requirements of octroi business because octroi contract is given by Government, initial security is essential and deduction under section 50(7A) and under section 80C is made which is considered final discharge of liability. So much so the Revenue alleges conduction of business proved from the evidence but no such evidence has been furnished before us. Since the DCIT has proceeded merely on his own suspicion, therefore the same cannot be endorsed by us. The assessee is in possession of a lot of documents to prove the non-conduction of octroi business e.g. photocopies of bank statement of Goreja Steel Mills (Pvt.) limited with Muslim Commercial Bank and Soneri Bank have been submitted before us, which reflect that in respect of steel scrap supplied to the said company payments were made through banking channel which being verifiable cannot be denied. From this evidence the contention of the AR is established but sorry to say that there is no material evidence available with the learned DR for submission of the same before us which may persuade us to have a contrary view of the matter to that of the learned AR. From the foregoing detailed discussion, we feel no hesitation in holding that the assessee was dealing in scrap commission and there was absolutely no octroi business. Therefore, the action of Assessing Officer in reopening assessment under section 65 also deserves to be vacated on this point.

19. The upshot of the foregoing discussion is that since the assessee had declared the impugned two bank accounts in the returns filed at Circle-19, Kasur against which an assessment order, dated 31-5-1999 was also finalized under section 62 of the Income Tax Ordinance; 1979 by ACIT Circle-19, Kasur, therefore, reopening of assessment already finalized under section 59(1) in case of the assessee by DCIT Faisalabad without having lawful jurisdiction over the case is hereby held to be double taxation which is not sustainable in the eye of law. The assessee by declaring bank accounts in the returns filed at Kasur had discharge his liability and there was no concealment on his behalf. Since, in the instant case the bank accounts maintained by Mr. Mohsin Bilal have been taxed twice, first time at Circle-19, Kasur vide assessment order, dated 31-5-1999 recorded by the ALIT and second time by the DCIT Circle-10 Companies Zone-Faisalabad, vide assessment order, dated 12-6-2000, therefore, subsequent assessment framed under section 65/62 is double assessment which is liable to be vacated. Hence the orders passed by DCIT/WT Circle-10, Companies Zone; Faisalabad, as well as CIT(Appeals) Zone-III, Lahore are hereby vacated. Consequently, the original assessment finalized under section 59(1) of the Income Tax Ordinance, 1979 is restored.

C. M. A./936/Tax (Trib.) Appeals accepted.