I.T.As. Nos.622/KB and 623/KB of 2003, decided on 12th August, 2004. VS I.T.As. Nos.622/KB and 623/KB of 2003, decided on 12th August, 2004.
2005 P T D (Trib.) 1375
[Income-tax Appellate Tribunal Pakistan]
Before S. Hasan Imam, Judicial Member and Shaheen Iqbal, Accountant Member
I.T.As. Nos.622/KB and 623/KB of 2003, decided on 12/08/2004.
Income Tax Ordinance (XXXI of 1979)---
----S.89---Charge of additional tax on failure to pay tax or penalty---Date of working of additional tax---In absence of "date of the month" in the notice, the time of payment had been impliedly extended in the demand note up to the last day of the month mentioned in the notice---Assessee was therefore, liable to make the payment on or before last day of the month---Where it was mentioned in the notice that demand be cleared within 15 days of the receipt of notice, mentioning of date and month would not be necessary and 15 days time shall run from the date of service of notice---If demand was reduced then additional tax would be payable on the reduced demand soworked out from the original due date till the said reduced demand was fully paid.
Ausama Rahim Khan for Appellant.
Muhammad Ali Indhar, D.R. for Respondent.
Date of hearing: 12th August, 2004.
ORDER
S. HASAN IMAM (JUDICIAL MEMBER).---By this order we would prefer to decide the appeals captioned above. In the assessment year 1994-95, the assessee has challenged the order, dated 17-3-2003 passed by CIT(A) confirming the order passed under section 156.
2.Initially the rectification order was passed by the Assessing Officer whereby tax appears to have been charged at 49% as against the original rate of 30%.
3.The learned CIT(A) confirmed the order observing that there is a clear error apparent on the face of therecord and treatment meted out by the learned DCIT after confronting the assessee as required under law for rectification under section 156 and to charge to tax theincome represent from Khas Deposit Certificate amounting to Rs.3,513,518 at normal rate of income i.e. 49% instead of 30% is correct, calling no interference.
4.The learned counsel argued that the above income is assessable under the head of income on securities being separate block of income, therefore, cannot be charged at the rate of 49%, the issue taken into consideration in the order has never been confronted to the assessee, as such it is second thought reflecting change ofopinion.
5.It is noted that in appellant's own case, the impugned treatment in respect of assessment year 1995-96, has already been upheld at the level of ITAT, therefore, action for rectification of the preceding years order to the said effect is justified being mistake apparently floating on the surface of the order. It is also held in a case reported as (1986) 157 ITR 448 (Kerala High Court) that "is a glaring, obvious and self-evident mistake apparent from the record" that appropriate provision of law, has not been taken into consideration.
6.In the circumstances supra, we find that rectification is just and proper and does not warrant interference. Appeal accordingly dismissed.
Assessment year 1995-96.
7.The present appeal pertains to the year 1995-96, wherein the assessee has taken objection to the order, dated 17-3-2003 confirming the treatment, invoking section 89 of the Income Tax Ordinance, 1979.
8.FactsrevealthatthelearnedDCITchargedadditionaltaxundersection 89amountingtoRs.320,426observingthatassesseewas required to pay tax demand of Rs.2,273,144 on or before 14-5-1998. Asperoriginaldemandnoticeservedon15-4-1998,thedemandwassubsequentlyreducedtoRs. 2,215,932videorderundersections 132/156, dated 19-9-1998 thereafter further reduced to Rs.1,942,470 vide order under section 156, dated 15-10-2003. As per record the assessee has paid the demand in question in the manner as under:--
Total demand payable as per
order under section 156, dated 15-10-2001Rs.2,411,084
Less:Payments allowed.
(1)Tax deducted under section 50(4)Rs.156,611
(2)Tax deducted under section 50(2).659,103.
(3)Tax paid under section 50(7E).1,520.
(4)Tax paid through refund
adjustment:
(i)From A/Year 1983-8453,948
(ii)From A/Year 1988-8947,432918,614
Balance demand which attracts the1,492,470
provision of section 89 (which was
originally payable by 14-5-1998)
9.The less tax paid under section 85 as per order under section 89 is reproduced hereunder:--
(1)Paid on 17-10-1998Rs.1,026,288
(2)Paid on 28-9-200050,000
(3)Paid on 28-10-2000200,000
(4)Paid on 13-4-2001100,000
(5)Paid on 29-04-2001100,000
(6)Paid on 26-6-2001200,0001,676,288
10.The assessee failed to pay the above demand within due time even after proper service of notice, dated 19-12-2002 accompanied with complete working of additional tax to be charged, served upon the assessee on 21-12-2002. DCIT consequently also charged additional tax under sections 89/85(2) read with section 90.
11.The learned CIT(A) confirmed the order in this context observing that the assessee has not been able to rebut the calculation of additional tax, and in case the demand worked out as a result of assessment is not paid on or before the due date then the additional tax shall be charged invoking section 89 of the Ordinance from the date on which it was payable till the date on which it paid, and where the demand is reduced as a result of appeal, the additional tax shall be charged from the said original given date but on reduced demand worked out on the basis of appellate order.
12.The next argument is regarding the date of demand. It is argued that there appears no justification to confirm the order under section 89 as no date has been specifically mentioned in the demand note. Record reveals that particular date of the month is missing however, month and year has been given. Since notice is containing the month and year in particular, as such in the absence of "date of the month", the time of payment has been impliedly extended in the demand note up to the last day of the month mentioned in the notice. Assessee was therefore, liable to make the payment on or before last day of the month. In cases where it is mentioned in the notice that demand be cleared within 15 days of the receipt of notice, mentioning of date and month would not be necessary and 15 day's time shall runfrom the date of service of notice. Besides, as a result of any rectification, if demand is reduced then additional tax would be payable on the reduced demand so worked out from the original due date till the said reduced demand is fully paid.
13.In the circumstances supra, the levy under section 89 does not warrant interference, whereby the appeal stands dismissed.
C.M.A./359/Tax (Trib.)Order accordingly.