W.T.As. Nos. 379/LB and 380/LB of 2004, decided on 20th October, 2004. VS W.T.As. Nos. 379/LB and 380/LB of 2004, decided on 20th October, 2004.
2005 P T D (Trib.) 920
[Income-tax Appellate Tribunal Pakistan]
Before Syed Nadeem Saqlain, Judicial Member and Raja Sikandar Khan, Accountant Member
W.T.As. Nos. 379/LB and 380/LB of 2004, decided on /01/.
20th October, 2004. Wealth Tax Act (XV of 1963)---
----S.17B & Second Sched., Cl. 12(2)---Powers of Inspecting Assistant Commissioner to revise Wealth Tax Officer s order---Exemption---Factory premises---Assessee was allowed exemption on account of factory premises being self-occupied---Assessment was modified by the Inspecting Assistant Commissioner on the basis of Appellate Tribunal s judgmentdeliveredsubsequenttothedateofassessmentorder---Validity---Judgment delivered on a subsequent date could not be applied to the assessment already completed earlier in time---Assessments were finalized on 2-12-1997 and 26-1-1999 whereas the judgment was delivered by the Appellate Tribunal on 3-12-1999---Inspecting Assistant Commissioner was not at all justified to invoke the provisions of S.17B of the Wealth Tax Act, 1963 and modify the assessments---Order passed by the Inspecting Assistant Commissioner was cancelled and the assessments finalized by the Assessing Officer were restored by the Appellate Tribunal.
2001 SCMR 1161; 2004 PTD 1621 and 2002 PTD (Trib.) 2755 rel.
PLD 1959 SC 9 ref.
M. Ajmal Khan for Appellant.
Abdul Rasheed, D.R. for Respondent.
Date of hearing: 14th October, 2004.
ORDER
These two appeals have been preferred by the assessee against order, dated 20-11-2001 passed by the learned IAC Range IV, Zone A, Lahore under section 17B of the repealed Wealth Tax Act, 1963 (hereinafter called the repealed Act) relating to the assessment years 1997-98 and 1998-99.
2.On perusal of record the learned IAC observed that appellant was allowed exemption by the Assessing Officer on account of factory premises being self-occupied vide orders, dated 2-12-1997 and 26-1-1999. The learned IAC found that the case of the assessee was not covered by the judgment, dated 31-12-1999 delivered vide W.T.As. Nos.411 and 412/LB of 1999. Wealth tax assessments were accordingly modified by making the valuation at Rs.13,42,575 each in the two years under consideration. The assessee being aggrieved has preferred appeals before this Tribunal.
3.The learned counsel for the assessee has submitted that the order passed by the learned IAC is not maintainable in view of the fact that Tribunal s order, dated 31-12-1999relieduponwasnotholdingthefieldwhentheassessments were finalized by the Assessing Officeron2-12-1997 and 26-10-1999. To support his contention the learned AR relied on the reported judgments cited as 2001 SCMR 1161, 2004 PTD 1621, 2002 PTD (Trib.) 2755 and PLD 1959 SC 9. The learned D.R., on the other hand, has supported the order of the learned IAC by submitting that since the case of the assessee was not covered under the definition provided vide judgment, dated 31-12-1999, the learned IAC was justified to modify the assessment.
4.After hearing both the sides and going through the orders passed by the authorities below we find that the submission made by the learned counsel for the assessee carry force. In the first reported judgment 2001 SCMR 1161 it was held that judgment would be operative from the date of announcement and would have no retroactive legal implication. They were not even party to the proceedings before the High Court. In the second judgment 2004 PTD 1621 it was observed as under:--
Also it is a settled proposition that a judgment of the Supreme Court would be operative from the date of announcement and would have no retroactive legal implication as found by the apex Court in re: Mst. Attiyya Bibi Khan and others v. Federation of Pakistan (2001 SCMR 1161). Even in case of amendment in law providing for remedial measures, according to the Hon ble Supreme Court of Pakistan in re: Commissioner of Income Tax v. ShahnawazLtd. and others (1993 SCMR 73) it will be effective and applicableonly to those cases where assessment had not been made by the Assessing Officer or where the matter was pending in appeal before the Tribunal or was sub judice before the High Court at the time of amending law was enacted. In the view of the apex Court, cases which had finally been determined or had attained finality i.e. which were past and closed transactions could not be reopened under amending legislation, where there were no express words to that effect in the amending law.
This judgment of the Hon ble apex Court also gives an idea to look at the proposition from another angle. It is that had the two judgments relied upon by the tax-payers been decided favourably to the Revenue, could it serve fresh notices and raise demand against other taxpayers who were not party before the Court and against whom statutory period for raising a demand or serving of notices for re-opening of the case had expired. The answer is obviously in a big No. The Revenue where the superior Courts decided a legal issue in its favour cannot be allowed to opening fresh cases or of those existing taxpayers, who were not served with statutory notices within the time prescribed by law in that behalf. The rule of past and closed transaction would certainly be attracted against the Revenue in such cases.
In the third judgment relied upon by the assessee reported as (2002) 86 Tax 44 (Trib.) it was held as under:--
As regards first contention of the learned AR that the learned IAC erred while relying upon a judgment of the Tribunal, in order to invoke section 17B it is manifestly clear that judgment of the Tribunal from which the learned IAC sought strength was not in the field at the time of framing of assessment order, it has been held time and again by the superior Courts of Pakistan that cancellation of an assessment cannot be approved if the same is cancelled on the basis of a judgment which was subsequently to the date of framing assessment order.
5.In the light of above discussion as well as case-law cited at the bar, we find ourselves in full agreement with the assertions made by the learned AR for the assessee. It is the unanimous view of the superior Courts of Pakistan that the judgment delivered on a subsequent date cannot be applied to the assessment already completed earlier in time. In the case of this assessee, assessments were finalized for the years under consideration on 2-12-1997 and 26-1-1999 whereas the judgment was delivered by the ITAT on 3-12-1999. Therefore, under the circumstances of the case the learned IAC was not at all justified to invoke the provisions of section 17B and modify the assessments in question. Therefore, the order passed by the learned IAC, dated 30-11-2001 is cancelled and the assessments finalized by the AssessingOfficer,dated2-12-1997and26-1-1999 are restored.
5.The appeals filed by the assessee are accepted.
C.M.A./345/Tax (Trib.)Appeals accepted.