I.T.A. No. 4100/LB of 2002, decided on 16th September, 2005. VS I.T.A. No. 4100/LB of 2002, decided on 16th September, 2005., 2006 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2130 (2005)

Finance Act (XII of 1991)---

----S. 12(8)---Corporate Assets Tax---Additional tax/penalty could not be charged in the context of Corporate Assets Tax due to confusion created in the minds of taxpayers as a result of multiple circulars issued by the Central Board of Revenue---Order of First Appellate Authority was legally justified in deleting the additional tax and no exception to the order was taken---Departmental appeal was dismissed by the Appellate Tribunal being devoid of merits.

2001 PTD (Trib.) -1790; 2001 PTD (Trib.) 2964; 2002 PTD (Trib.) 1982; 87 Tax 211 (Trib.); W.T.A. No.1872/LB of 1997, dated 26-5-1998 and W.T.A. No.6872/LB of 1996, dated 4-7-2001 rel.

Ghazanfer Hussain, D.R. for Appellant.

Shahid Pervez Jami for Respondent.

Date of hearing: 16th September, 2005.

JUDGMENT

MUKHTAR AHMAD GONDAL (ACCOUNTANT MEMBER).---The department, through this appeal, has assailed the impugned order on the ground that the learned CIT(A) was not justified to delete the levy of additional tax and penalty as neither the return was filed nor Corporate Assets Tax was paid by the assessee.

2. Brief facts of the case are that the respondent, a limited company deriving income from running a sugar mills, was liable to pay Corporate Assets Tax on its fixed assets of Rs.38,84,08,891 as on 30-9-1991 was liable to pay the CAT but the respondent taxpayer neither filed return nor paid CAT. The respondent was duly confronted through a notice that it was liable to pay CAT amounting to Rs.20,00,000 within six months of the close of accounting period ending on 30-9-1991 i.e. by 31-3-1992. Since failure to pay statedly CAT was established the company was liable to pay additional tax @ 24% of the outstanding demand. The reply tendered by the appellant was found by the Taxation Officer as not plausible, so he created liability of CAT amounting to Rs.20,00,000 and also charged. additional tax @ 24% per annum at Rs.19,20,000 for non-payment of the tax. This treatment was assailed in first appeal before the CIT(A) on the ground that below taxable return was filed under the impression that from value of fixed assets liability pertaining to previous years were to be reduced so as to arrive at net assets on which CAT was to be charged. According to the appellant the principal amount was not properly understood hence levy of additional tax was unjustified. A number of reported and unreported case-law were relied upon in support of the contention and the CIT(A) quoting the extracts of some of the cases found the charge of additional tax and imposition of penalty as unjustified and consequently deleted the same.

3. The learned DR vehemently assailed the impugned order and contended that neither the respondent had filed the return or paid the CAT within the stipulated time, therefore, the Assessing Officer has rightly charged the additional tax. According to him the default is deliberate and established, the Assessing Officer was legally justified to levy the charge and there existed a justifiable reason with the CIT(A) to delete the same. On the other hand, the learned AR supported the impugned order and contended that the delay for non-payment of the principal amount of CAT was not deliberate as the levy of principal amount was not properly understood by the concerned taxpayer at large as well as by the C.B.R. He further argued that the Tribunal in identical circumstances had deleted the levy of additional tax and penalty in the following reported and unreported cases:--

(1) 2001 PTD (Trib.) 1790

(2) 2001 PTD (Trib.) 2964

(3) 2002 PTD (Trib.) 1982.

(4) 87 Tax 211 (Trib.)

(5) W.T.A. No.1872/LB of 1997, dated 26-5-1998

(6) W.T.A. No.6872/LB of 1996, dated 4-7-2001

4. We have heard the rival arguments, perused the orders of-:he authorities below and have also examined the available record. The issue in hand earlier came under discussion in the above mentioned cases wherein it has ultimately been held that additional tax/penalty cannot be charged in the context of CAT due to confusion created in the minds of tax payers as a result of multiple circulars issued by the C.B.R. In another case reported as (2002) 85 Tax 277 (Trib.), where the taxpayer had filed below taxable return reducing the liabilities from the value of assets charges additional tax, the first appellate authority deleted the same and the Tribunal upheld the decision with the following remarks:---

"Regarding additional tax we are again persuaded to agree with learned AR. In this regard it is true that the facts in most of the cases referred by the learned AR were the same as pointed out by the learned D. R. However, the findings finally are not for that reason. The Tribunal has deleted the additional tax in view of unsettled atmosphere during all these years. In fact we have also deleted such an additional tax in our Full Bench judgment in the case of Fatima Enterprises vide I.T.A. No.897/LB of 1998 (Assessment year 1992-93), dated 30-11-1999. Our reasoning for deletion of this additional tax there is also that for imposition of CAT, the Central Board of Revenue remained quite unclear on a number of points. The charge of additional tax under the circumstances, therefore was not justified. Following the ratio of same as well as of the other judgment of this Tribunal referred above, we also delete the additional tax imposed in the instant case. This would result in confirmation of the charge of CAT and deletion of penalty and additional tax."

5. Considering the facts of the present case in the light of the reported judgment of the Tribunal, we are of the view that the learned CIT(A) was legally justified in deleting the additional tax and no exception to the impugned order is taken. The departmental appeal, is therefore, dismissed being devoid of merits.

C.M.A./91/Tax (Trib.)????????????????????????????????????????????????????????????? Appeal dismissed.