I.T.As. Nos. 5373/LB and 5374/LB of 2003, decided on 18th November, 2005. VS I.T.As. Nos. 5373/LB and 5374/LB of 2003, decided on 18th November, 2005., 2006 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 1052 (2005)

(a) Income Tax Ordinance (XXXI of 1979)---

----S. 129---Appeal to the Appellate Additional Commissioner---Vacation of order---First Appellant Authority "vacated" the order of Assessing Officer but it had not specified,' precisely, what consequential action it had in its mind after the vacation---Order of First Appellate Authority to that extent was declared "inchoate" by the Appellate Tribunal.

(b) Income Tax Ordinance (XXXI of 1979)---

----Ss. 56 & 61---Notice for furnishing return of total income---Issuance of single notice under S.56 of the Income Tax Ordinance, 1979 for two assessment years, though not a preferred mode to call for returns of income for two assessment years, was not illegal---Issuance of "multiple statutory notices" under different provisions of the statute (such as notice under S.56 and notice under S.61) simultaneously, was however illegal, as it caused prejudice to the assessee.

2005 PTD (Trib.) 234 rel.

(c) Income Tax Ordinance (XXXI of 1979)---

----S. 63---Best judgment assessment---Assessment after date of compliance-Legality-Ex parte assessment made after the date of compliance cited in the notice was not illegal provided default was properly established and the Assessing Officer took cognizance of assessee's default on the due date i.e. the date specified in the notice.

1996 PTD 1125; PLD 1975 Lah. 893; (2004) 90 Tax 325 (Trib.) and 2005 PTD (Trib.) 211 rel.

S.A. Masood Raza Qizalbash, D.R. for Appellant.

Nemo. for Respondent.

Date of hearing: 18th November, 2005.

ORDER

MUHAMMAD MUNIR QURESHI (ACCOUNTANT MEMBER).---These appeals by revenue assail the order of the CIT(A) on the Grounds that (i) the CIT(A) "Vacation" of the Assessing Officers order was not consistent with the statute (ii) issuance of (single) notice under section 56 for two years was not illegal and (iii) ex parte decision taken by the 'Assessing Officer for default of notice under section 56 after the last date specified in the notice for compliance was not illegal.

2. The assessee-respondent is not present and no adjournment has been sought. The appeal will be decided on merits.

3. According to the DR the departmental grounds as filed are self-explanatory and it was patent that the order of the CIT(A) was not tenable in law and that the findings recorded were not consistent with express statutory stipulation.

4. I have heard the DR and examined the available record and I find that under the Statute the first appellate authority may confirm, reduce, set aside or annul an assessment in appeal before him. Before taking any action (except of course "confirmation" of the A.O. order), the CIT(A) will "vacate" the impugned order of the Assessing Officer. In the present case, the CIT(A) has "vacated" the order of the Assessing Officer but he has not specified, precisely, what consequential action he had in his mind after the vacation. To that extent therefore the order of the CIT(A) is "inchoate".

5. As for issuance of single notice under section 56 for two assessment years, though not a preferred mode to call for returns of Income for two assessment years, is not illegal. Issuance of "Multiple B Statutory Notices" under different provisions of the statute (such as notice under section 56 and Notice under section 61 simultaneously, is however illegal, as it causes prejudice to the assessee, and it has been so held by the Tribunal 2005 PTD (Trib.) 234. As for an ex parte assessment made after the date of compliance cited in the notice, the c Lahore High Court in at least two Division Bench judgments has held that this is not illegal provided default is properly established and the Assessing Officer takes cognizance of assessee's default on the due date i.e. the date specified in the notice 1996 PTD 1125 (LHC) and PLD 1975 Lah. 893. The ITAT has followed these in its judgments reported as (2004) 90 Tax 325 (Trib.) and 2005 PTD (Trib.) 211.

6. After due consideration, the order of the CIT(A) is hereby vacated and the CIT(A) is directed to rehear the appeals for 1998-99 and 1999-2000 filed by the assessee against the orders of assessment of assessee's total income for these years and to pass a speaking order, strictly in accordance with law.

C.M.A./569/Tax (Trib.)??????????????????????????????????????????????????????????????????????? Appeal accepted.