W.T.As. Nos.326/LB and 325/LB of 2004, decided on 18th January, 2005. VS W.T.As. Nos.326/LB and 325/LB of 2004, decided on 18th January, 2005.
2005 P T D (Trib.) 1370
[Income-tax Appellate Tribunal Pakistan]
Before Ehsan ur Rehman, Judicial Member and Mazhar Farooq Shirazi, Accountant Member
W.T.As. Nos.326/LB and 325/LB of 2004, decided on 18/01/2005.
Wealth Tax Act (XV of 1963)---
----Ss.2(10), 8 & 16---Deputy Commissioner---Jurisdiction to make assessment by Taxation Officer---Assessee contended that First Appellate Authority was not justified to confirm the order of the Taxation Officer as the assessment framed by the Taxation Officer was illegal, withoutjurisdiction, void ab initio and liable to be annulled---Validity---Assessments framed by the Taxation Officer were withoutlawful jurisdictionandabinitioillegalandvoidinviewofwhichthewealthtaxassessment proceedings were null and void in the eye oflaw---AssessmentsframedwereannulledbytheAppellateTribunal.
2002 PTD 541 and 1999 PTD (Trib.) 4026 rel.
Sh. Zafar-ul-Islam for Appellant.
Mrs. Sabiha Mujahid, D.R. for Respondent.
Date of hearing: 18th January, 2005.
ORDER
These two appeals have been filed by the assessee-appellant, an Individual, against the order of the learned CIT/WT (Appeals), Multan for the assessment years, 1999-2000 and 2000-2001, dated 9-4-2004. The main issues agitated by the assessee-appellant in the assessment year, 1999-2000 and 2000-2001 are that the learned CWT(A) was not justified to confirm the order of the learned Taxation Officer as the assessment framed by the Taxation Officer is illegal, out of jurisdiction, void ab initio and liable to be annulled vide judgment (2002) PTD 541.Section 2(10) of the Wealth Tax Act, 1963 (sic). The assessee-appellant has also agitated against valuation of immovable assets as well asdisallowance of liabilities in both of the years under consideration.
Briefly stated the facts of the case are that the original wealth tax return was filed declaring net wealth at Rs.10,85,986 for the assessment year 2000-2001. The same was revised declaring total net wealth at Rs.33,46,308 on the plea that value of property No.62-A, Abdali Road, Multan and liabilities were inadvertently not declared. The Assessing Officer issued notice under sections 16(4) and 16(2) of the repealed Wealth Tax Act, 1963 and the case was discussed with the A.R. of the assessee at the assessment stage. The building No.62-A, Abdali Road, Multan which was declared at Rs.78,50,368 was considered to be too low. The Assessing Officer came to the conclusion that area measuring 1100.53 sq. ft. was rented out to Messrs Al Falah Bank on monthly rent of Rs.36,000. The value of rented area measuring 1100.53 was determined on the basis of GALV at Rs.43,20,000. The cost of land of 33 Marlas was adopted in the light of rate fixed by the District Collector. Value was thus arrived at Rs.1,78,20,000 and the value of three Marlas land was determined at Rs.3,00,000 at the rate of Rs.1,00,000 per Marla. Total value of land thus arrived at Rs.2,24,40,000. Liabilities were claimed at Rs.65,24,418 in the form of Term Finance Advance Rent and payable to P.P.C. The assessee paid the liabilities as on 30-6-2000 on the basis of information collected from Bank Al Falah Limited amounting to Rs.23,78,418. This amount was allowed and balance amount of Rs.41,46,000 was disallowed by the Assessing Officer. Finally, the Assessing Officer determined the total wealth at Rs.2,47,24,340 for the assessment year 2000-2001. In the assessment year 1999-2000, original wealth tax assessment was framed at total net wealth of Rs.2,00,56,950 under section 16(3) of the repealed Wealth Tax Act, 1963. On appeal, the learned CIT(A) set aside the impugned assessment, dated 2-6-2003 with the directions that agreement with the bank be looked into carefully and pending completion the semi construction be valued keeping in view the rates notified for open plot by the Collector and construction for unfinished construction and finally the Assessing Officer completed the wealth tax assessment for the year,1999-2000 at Rs.81,96,930 after allowing basic exemption of Rs.10,00,000 and assessed the balance taxable wealth at Rs.71,96,930.
Being aggrieved with the treatment, the assessee preferred appeal before the learned CIT/WT (Appeals), Multanwho vide his order,dated9-4-2004fortheassessmentyears1999-2000and2000-2001, confirmed the value of rented portion of property measuring 1100.53 sq. ft. being as per wealth tax rules on the basis of gross annual letting value at Rs.36,00,000, which was determined at Rs.43,20,000. Cost of land worked out on the basis of rate fixed by the District Collector for the purposes of stamp duty was also confirmed by the learned First Appellate Authority being appropriate for the reason that the assessee has not furnished any documentary evidence to substantiate his contention. Thelearned CIT(A) also confirmed the value of 33 Marla commercial building adopted at Rs.1,78,20,000 and value of 3 Marla land adopted at Rs.1,00,000 per Marla being reasonable because the same was in the light of rate fixed by the District Collector. Regarding cost of construction of covered area of 11042 sq. ft., the learned CIT(A) reduced the same to Rs.20,00,000 being on the higher side.
During the course of reassessment proceedings, the AR of the assessee-appellant appeared before us has strongly agitated regarding the contentions as raised in the memo. of grounds of appeal whilefurnishing a reported judgment in re: 1999 PTD (Trib.) 4026. On the other hand, the learned DR has opposed the submissions as made by the AR of the assessee being not tenable.
Parties have been heard. We have looked into the matter from all its pertinent aspects and also perused the case-law cited by the AR of the assessee in re: 1999 PTD (Trib.) 4026 whereby the learned ITAT has held as under:--
"The learned AR of the assessee further states that the Assistant Commissioner of Wealth Tax is also not listed as a wealth tax authority in section 8 of the Wealth Tax Act, 1963. Therefore, the Assistant Commissioner of Wealth Tax who made these assessments had acted without jurisdiction and his orders are consequently illegal and void. The learned DR conceded that there is a lacuna in the law. After considering the arguments of the learned AR, we find ourselves on agreement with him that the orders passed were illegal and without jurisdiction. Therefore, the order of the learned AAC is vacated and the orders of the Assistant Commissioner of Wealth Tax are annulled".
We have given anxious consideration to the above contentionsof the assessee-appellant which carry force in the light of reported judgment of the ITAT and we are inclined to accept them because the assessments framed by the Taxation Officer for the assessment years 1999-2000 and 2000-2001are being without lawful jurisdiction and ab initio illegal and void in view of which the wealth tax assessment proceedings for both of the assessment years i.e. 1999-2000 and 2000-2001 are null and void in the eye of law in view of which the assessments framed are accordingly annulled vide reported judgment of the ITAT cited supra.
The appeals of the assessee-appellant for the assessment years 1999-2000 and 2000-2001 succeed in the manner as discussed above.
C.M.A./370/Tax (Trib.)Appeals accepted.