(a) Income‑tax‑‑‑

‑‑‑‑Jurisdiction‑‑‑Order passed in excess of jurisdiction without jurisdiction‑‑ Effect‑‑‑Where any order has been passed by an authority in excess of its jurisdiction or without jurisdiction, no finality can be attached to such order and that should be ignored for all practical purposes.

(b) Income‑tax‑‑‑

‑‑‑‑Limitation‑‑‑Order without jurisdiction‑‑‑Appeal‑‑‑Limitation to file appeal against the order which has been passed without lawful jurisdiction would cease to run meaning thereby appeal against such order can be instituted at any time.

(c) Income‑tax‑‑‑

‑‑‑‑Proceedings without lawful authority‑‑‑Effect‑‑‑Superstructure built on proceedings conducted without lawful authority must fall down.

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

‑‑‑‑Ss. 59(1) & 55‑‑‑C.B.R. Circular No.21 of 2000, dated 11‑9‑2000, Para. 6(a) (Self‑Assessment Scheme)‑‑‑C.B.R. Circular No.26 of 2000, dated 14‑10‑2000‑‑‑‑Self‑assessment‑‑‑Selection through computer ballot‑‑‑Agreed assessment‑‑‑High Court subsequently declared such selection illegal being parametric selection‑‑‑Challenge of selection of case for total audit through computer balloting in appeal after completion of assessment on agreed basis‑‑‑ Validity‑‑‑Since selection of case through computer balloting had been held by the High Court to be without lawful authority, the order passed by the Assessing Officer was also without lawful jurisdiction and was nullity in the eye of law‑‑ Purported consent of the assessee did not confer jurisdiction to Assessing Officer to make an illegal assessment‑‑‑Assessing Officer had no jurisdiction to process the assessee's case under normal law and the order passed thereunder being without lawful jurisdiction was nullity in the eye of law‑‑‑ Appeal of the Department was rejected by the Appellate Tribunal.

2001 PTD 3121 ref.

Javed Sheryar, DCIT for Appellant.

Kh. Riaz Hussain for Respondent.

Date of hearing: 10th May, 2002.

ORDER

On perusal of the facts a question arises as to whether validity of selection of the case for total audit through computer balloting can be challenged after completion of assessment on agreed basis merely on the fact that the higher Appellate Court in the case of another assessee has ultimately declared the very selection of the cases to be without lawful authority?

2. Briefly stated that the assessee‑respondent had filed his tax return declaring total net income of Rs.62,909 under the Scheme of Self- Assessment (SAS) pertaining to assessment year 2000‑2001. However, the return so filed by the assessee was allegedly picked up through computer balloting to be processed under normal law. After completing the statutory formalities, the return version was discarded by the Assessing Officer as the assessee‑respondent had failed to adduce any documentary evidence to substantiate the declared results. Anyhow, the asses see‑respondent had offered to be assessed at net income of Rs.110,000 on compromise basis and agreement to this effect was recorded in the order sheet on 14‑4‑2001. On first appeal by the assessee, selection of the case was challenged before the AAC to be illegally made. Resultantly, the AAC considering the decision of the Federal Tax Ombudsman and the judgment delivered by the Hon'ble High Court cited as (2001 PTD 3121 (H.C. Lahore), whereby selection of the case through the parametric method was declared to be without lawful authority, directed the Assessing Officer to accept the declared income under the Scheme of Self‑Assessment. This decision was recorded by the First Appellate Authority by virtue of its order, dated 24‑9‑2001 recorded in Income Tax Appeal No. 0930. This has compelled the Revenue to come up in appeal before the Tribunal.

3. I am not persuaded to incline with the contention of the learned D.R. that since the assessee by his conduct of offering to be assessed on agreed basis has accepted selection of the return out of the ambit of Self- Assessment Scheme through computer balloting, therefore, he is debarred to challenge the very selection of .the case. The facts which envisaged for disposal of this appeal are that the C.B.R., Islamabad in exercise of the powers conferred under, section 59 of the Income Tax Ordinance promulgated a Scheme for Self‑Assessment in respect of assessment year 2000‑2001 vide Circular No.21 of 2000, dated 11th September, 2000. According to this scheme the returns filed under section 55 of the Income Tax Ordinance, 1979 shall qualify for acceptance thereunder provided the conditions as laid down in para 2 of the scheme are fulfilled in para 4 the returns which were not eligible to be accepted under the Self‑Assessment Scheme were enumerated therein whereby returns selected for audit were also mentioned therein. Under para. 6 of the scheme in which modes were provided for selection of certain percentage of the cases out of ambit of the scheme to be processed under normal law. Relevant para of which is being enumerated hereunder for the purposes of reference because the whole controversy of the instant case revolves against that para.

Selection of cases of Audit.‑‑‑From amongst the returns filed under the Self‑Assessment Scheme returns may be selected for audit in the manners given as under:‑‑

(a) Ten per cent (10%) through computer random ballot; and

(b) Cases selected by Commissioner of Income Tax with the approval of Regional Commissioner of Income Tax concerned.

Subsequently vide Circular No.26 of 2000 (Income Tax); dated 14th October, 2000 the figure of 10% was substituted with 20% in sub -para (a) of Para 6 while in sub‑para (b) a sentence was added which envisaged that the cases selected by the RCIT, the C. B. R. may issue guideline and directions in this regard. Later on the C.B.R. changed its stance from selecting the cases through computer balloting rather adopted a novel methodology of selecting the cases such as through parametric balloting. The cases of the present assessee were also selected out of the purview of the SAS by the changed mode of selection of the cases by the C.B.R. This mode of selection of the cases grieved the taxpayers and ultimately they opted to invoke writ jurisdiction of the High Court. The main thrust of the arguments before his Lordship was that the scheme did not envisage any parametric selection for audit but it could only be through the computer random balloting front amongst the returns filed under the SAS pertaining to assessment year 2000‑2001. Finally the learned Judge of‑the High Court in the Case of Messrs Ikhlaq Cloth House, Faisalabad v. Assistant Commissioner of Income Tax Circle‑12, Faisalabad Zone, Faisalabad and three others cited as 2000 PTD 3121 declared selection of the case through parametric balloting to be violative of the scheme and held to, be without any lawful authority.

4. This judgment of the august High Court has cloyed the present assessee to file appeal before the First Appellate Authority being the case was also selected through parametric balloting. It is consensus judicial opinion that where any order has been passed by an authority in excess of its jurisdiction or suffered from want of jurisdiction, no finality can be affixed to such order and that should be ignored for all practical purposes. Even limitation to file appeal against the order which has been passed without lawful jurisdiction would cease to run meaning thereby appeal against such‑order can be instituted at any time.

5. Similarly, any proceedings which are conducted without any lawful authority, how come those proceedings can get refuge under the and low on what grounds superstructure built on such void proceedings can stay on the earth. Corollary would be that such building must fall down.

6. Reverting to the facts of the case, it is not disputed on behalf of the Department that the Hon'ble High Court had not declared selection of the cases through parametric method to be violative of para 6 of the SAS for the year 2000‑2001, without lawful jurisdiction. In the given scenario, I hold that since selection of the case through computer balloting has been held by the august Lahore High Court. Lahore to be passed by the DCIT was without lawful jurisdiction and is nullity in the eye of law. I offer to be assessed on agreed basis, therefore, purported consent of the assessee does not confer jurisdiction to the Assessing Officer to make an illegal assessment. Thus, the DCIT had no jurisdiction to process the assessee's case under normal law and the order passed thereunder being without lawful jurisdiction is nullity in the eye of law.

7. In the result the departmental appeal is rejected.

C.M.A./974/Tax (Trib.) Appeal rejected.