Income Tax Ordinance (XXXI of 1979)---

----Ss. 13(1)(d), 65 & 136---Re-opening of assessment---Definite information-- Assessing Officer, on an information received, issued a show-cause notice to assessee suggesting that value of shop purchased by him in a particular locality was understated---Assessing Officer, after discarding submissions of assessee made in reply to show-cause notice, proceeded to make addition under S.13(1)(d) of Income Tax Ordinance, 1979---Appellate Tribunal found that assessment could not be re-opened merely because assessee had-purchased certain property, unless there was a definite information regarding understatement of investment-- Issue, whether a definite information existed enabling the Revenue to re open a case under S.65 of Income Tax Ordinance, 1979, was necessarily a question of law, all the more so when Department failed to bring home any evidence to support its view that value of the property had been understated---Mere fact that in another Commercial Centre a shop with similar area was purchased by another assessee at a higher rate would not amount to definite information enabling Revenue to re-open a case---High Court declined to entertain and rule upon said question.

Shahid Jamil Khan for Appellant.

Date of hearing: 19th November, 2003.

ORDER

MUHAMMAD SAIR ALI, J.---In this further appeal under section 136 of the late Income Tax Ordinance, 1979 the Commissioner of Income Tax Zone-A, Lahore claims that following question of law arises out of the impugned order of the Income Tax Appellate Tribunal, dated 13-10-1998.

"Whether on the facts and circumstances of the case, the learned ITAT, Lahore was justified in holding that the assessment could not be re-opened in terms of, section 65 of the Income Tax Ordinance and in nullifying the orders of the Departmental authorities including the first appellate authority by accepting the second appeal."

2. According to the statement of the case the respondent/assessee is a member of Association of Persons and the proceedings in his case were filed as the assessee did not earn taxable income. Subsequently the Assessing Officer on an information received issued a show-cause notice to the assessee on 28-5-1995 suggesting that a shop purchased by him in Raja Centre Extension with a covered area of 98 sq. ft. for a sum or Rs.1,75,000 was understated. Also on the basis of a report made by his Inspector he issued a fresh show-cause notice expressing his intention to estimate the value of the shop at Rs.7,000 per sq. ft. The Assessing Officer after discarding the submissions made in reply to the notice proceeded to make an addition of Rs.5,81,000 under section 13(1)(d) of the late Income Tax Ordinance, 1979.

3. The assessee failed before the first appellate forum i.e. CIT (Appeals). On further appeal a Division Bench of the Tribunal accepted the contentions put forth before it and held that the assessment could not be re-opened merely because the assessee has purchased certain property unless there was a definite information regarding understatement of the investment.

4. After hearing the learned counsel for the petitioner we are of the view that the issue if a definite information existed enabling the Revenue to re-open a case under section 65 of the late Income Tax Ordinance is necessarily a question of law. All the more so when the department failed to bring home any evidence to support their view that the value of the property had been understated. Mere fact that in another Commercial Centre a shop with similar area was purchased by another assessee at a higher rate would not amount to definite information enabling the Revenue to re-open a case. Therefore, we will decline to entertain and rule upon the question.

5. Dismissed in limine.

H.B.T./C-29/LAppeal dismissed.