MUHAMMAD SALEEM VS INCOME-TAX APPELLATE TRIBUNAL, 2004 PTD-LAHORE-HIGH-COURT-LAHORE 633 (2003)

Income Tax Ordinance (XXXI of 1979)---

-----Ss. 59-A, 65 & 136(1)---Additional assessment for reason of non -disclosing source of income for investment made during relevant year---Tribunal upheld order-in-original---Validity---Tribunal had rightly observed that acceptance of disclosed income under S. 59-A of Incomc Ordinance, 1979 was without application of mind, thus, there could be no question of probing or accepting same after examination---Question as to whether assessee had made investment from source disclosed try Revenue, was a question of fact---Such question had been answered against assessee on his failure to establish source of income---High Court dismissed reference application.

Zia Haider Rizvi for Appellant.

Mian Yousuf Omar for Respondent.

Date of hearing: 30th September, 2003.

JUDGMENT

NASIM SIKANDAR, J.---This reference under section 136 of the late Income Tax Ordinance, 1979 by an individual seeks the entertainment of following questions of law which are stated to have arisen out of the impugned order of the Income Tax Appellate Tribunal dated 23-1-2001:--

(i) Whether on fact and circumstances of the case Income Tax Appellate Tribunal was legally justified in rejecting the order of the same Court for the assessment year 1993-94 decided in favour of the appellant on the basis of same information?

(ii) Whether on facts and circumstances of the case Income Tax Appellate Tribunal was legally justified in restoring the action of Assistant Commissioner of Income Tax under section 65 without any afresh material for the assessment year, 1994-95?

(iii) Whether on facts and circumstances of the case Income Tax Appellate Tribunal was justified in restoring the addition under section 13(1)(aa) of Rs.7,50,000 which stood explained in the hands of the transferee and accepted by the ITAT in appellant's case in assessment year 1993-94?

(iv) Whether on facts and circumstances of the case Income Tax. Appellate Tribunal was legally justified in rejecting the case law of superior Courts presented at the time of hearing without even mentioning the name of the cases in the order?

2. The petitioner is an individual who was assessed under action 59(A) for the assessment year 1994-95 at the disclosed income of Rs.68,000. Subsequently his case was reopened under section 65 of the late Income Tax Ordinance, 1979 on the, ground that he made an investment of Rs.7,50,000 during the period relevant to the assessment year out of sources which were not disclosed to the revenue. On usual proceedings an assessment was framed on 30-6-1998 at Rs.10,67,970 which included an addition under section 13(1)(aa) of the said amount of Rs.7,50,000.

3. Learned AAC Sahiwal through his order, dated 28-1-1999 disapproved the aforesaid addition on the ground that the Department laving earlier accepted the source of investment qua the said amount reopening of the case was not justified. On departmental appeal however a Division Bench of the Tribunal by way of the impugned order restored the original assessment order after finding that the original assessment under section 59-A was made mechanically and there was no application of mind. Therefore, according to the learned Members of the Tribunal, there was no question of examining the amount of investment as earlier held by the learned A.A.C. Thereafter the assessee proposed the aforesaid questions for their reference to this Court under section 136(1) of the late Income Tax Ordinance, 1979 which was declined by the learned Members of the Tribunal on 19-6-2001.

4. After hearing the learned counsel for the parties, we are inclined to agree with the learned counsel for the Revenue that the aforesaid questions do not arise out of the order of the Tribunal and that the issue if an investment during the period relevant to the assessment year 1994-95 was made from sources which were not disclosed to the Revenue was predominatly a question of fact. The contention of the learned counsel for the petitioner that the Tribunal having accepted part payment during the assessment year 1993-94 on the agreement to sell, dated 5-8-1992 could not accept the departmental appeal is not supported from the record. In the order recorded by the Tribunal with respect to the assessee for the assessment year 1993-94 dated 19-12-1998 the issue of investment made in that regard was not at all ruled upon. Factually the Tribunal only found the assessee to be entitled to concession of immunity from total audit ort his having declared higher income as compared to the income disclosed to the previous year.

5. The learned Tribunal by way of the impugned order also rightly observed that acceptance of the disclosed income under section 59-A being without application of mind there could be no question of probing 13 or accepting the same after examination. The question as rightly pointed out by the learned counsel for the Revenue, simply remains it an assessee had made an investment from the source disclosed to the Revenue. That question was answered against the assessee on his failure to establish the source of income.

6. That being so we are not inclined to entertain these questions. This application shall, therefore, be dismissed.

S.A.K./M-2446/LReference dismissed.