Messrs ASAD & COMPANY VS INCOME TAX APPELLATE TRIBUNAL, LAHORE BENCH, LAHORE, 2005 PTD-LAHORE-HIGH-COURT-LAHORE 2541 (2005)

Income Tax Ordinance (XXXI of 1979)---

----Ss. 62, 66-A & 135(5)---Re-opening of assessment---Power of Appellate Tribunal---Scope---Initial assessment found to be framed on basis of wrong bank account---Enquiries revealed that such bank account had already been considered in assessment of its true holder and had no relation with present assessee---Tribunal in appeal set aside order of Inspecting Additional Commissioner and remanded case for making further inquiries and investigations---Validity---Tribunal had jurisdiction to vary and change any order in appeal and could pass such order and directions, which would be necessary to meet the ends of law and justice---No exception could be taken to impugned order---High Court dismissed appeal in circumstances.

Latif Ahmad Qureshi for Appellant.

Shahid Jamil Khan for Respondents.

Date of hearing: 3^rd March, 2005.

ORDER

Through this appeal under section 136 of I.T.O., 1979, following questions of law have been referred for expression of opinion by this Court:--

"(1) Whether in the facts and circumstances of the case the Tribunal was justified in law to set aside the case directing inquiries allowing respondent No.4 to rove upon his earlier order which was not found satisfactory in law?

(2) Whether in the facts and circumstances of the case, when the Tribunal had found the impugned order under section 66A as unsatisfactory in law, especially in that no legal error was found in assessment order, dated 18-6-1999, the Tribunal has erred in law is not canceling the impugned order under section 66A?

(3) Whether in the facts and circumstances of the case the Tribunal has erred in law in not canceling the impugned order under section 66A when the Tribunal has not been able to find any loss of revenue in the case of assessment order, dated 18-6-1999 in the case of the appellant?

2. The assessee appellant which claims to be an association of persons (AOP) filed its returns on 31-10-1998, for the year, 1998-99, which was finalized by the Assessing Officer under section 62 of the ITO, 1979. Subsequently, IAC called for the assessment record. After scrutinizing the same issued show-cause notice under section 66A of the ITO, 1979. Upon considering the reply filed by the assessee appellant IAC rejected the application holding that the assessment was erroneous and prejudicial to the interest of Revenue. The assessment was cancelled. The basis of the order as enumerated in the order itself was as follows:--

"(1) The assessment has been made on the basis of a bank account No. 03117-6, M.C.B., Ghalla Mandi Branch which is owned by Mr. Hafeez-ur-Rehman as proprietor in the name and style of Mr. Hafeez-ur-Rehman son of Abdul Ghani, Mandiala Warriach and has to do nothing with Messrs Asad and Company. The said bank account has been erroneously considered in your case."

3. Enquiries have revealed that the case of Messrs Asad and Co. never existed before nor is borne on the NTN. The return in this name has been filed to avoid proper taxation in the case of Mr. Hafeez-ur-Rehman. The proceedings by the DCIT, Circle-13, Gujranwala were intimated when the DCIT, Circle-04, Gujranwala had already obtained information with regard to the said bank account and issued show-cause notice in the case of Mr. Hafeez-ur-Rehman.

4. This account has already been considered by the DCIT, Circle-04, Gujranwala and the assessment in the case of Mr. Hafeez-ur-Rehman has been made on basis of the said bank account.

5. Being aggrieved, the asses see-appellant filed an appeal before the ITAT, which after hearing both the parties rejected the objections raised by the appellant, however, came to the conclusion that further probe and investigation was required; and in the circumstances set aside the order of the IAC, remanded the case back to the IAC to make further inquiries and investigations. In this behalf, a very detailed order setting out the parameter and the line of investigation to be followed and adopted was set out by the ITAT in its order impugned before this Court.

6. Learned counsel for the appellant has contended that if the ITAT was not satisfied with the order of the IAC it should have cancelled the same and the ITAT has no jurisdiction to pass the order directing further inquiries.

7. Learned counsel for the Revenue has drawn attention of this Court to subsection (5) of section 135 of the ITO, 1979, which reads as under:--

"If the Appellate Tribunal is satisfied that an order which is the subject of appeal, ought to be interfered with, it shall cancel or vary the order accordingly and shall issue such consequential directions as the case may require."

8. In view of the above, it is clear and obvious that ITAT is vested with the jurisdiction to vary and change any order in appeal before it and in this behalf can pass such order and the directions that would be necessary to meet the ends of law and justice. In the facts and circumstances no exception can be taken to the order. In this view of the matter the question raised are answered as above and the appeal is disposed of accordingly.

S.A.K./A-585/LReference answered.