I.T.A. No. 1378/LB of 2004, decided on 6th May, 2006 VS I.T.A. No. 1378/LB of 2004, decided on 6th May, 2006, 2006 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2689 (2006)

Income Tax Ordinance (XXXI of 1979)---

----S. 59---C.B.R. Circular No. 7 of 2002, dated 15-6-2002, para.9(a)(ii)--Self-assessment---Selection of case for total audit---First Appellate Authority directed to accept the case under Self-Assessment Scheme on the ground that selection for total audit on basis of guidelines was improper as held by the High Court---Appeal against, by the Department---Assessee contended that Supreme Court had granted leave to appeal against the said judgment on this issue but while granting the leave the judgment was not suspended and the said judgment being still in the field was binding on the Department---Validity---When the First Appellate Authority had followed the judgment of High Court which he was bound to do, the Department should not have claimed that the First Appellate Authority directed for acceptance of the case without any solid reason---Such arguments were unwarranted and need to be avoided---Revenue appeal being without merit was rejected by the Appellate Tribunal.

2006 PTD 538 ref.

Rana M. Laqman, D.R. for Appellant.

M. Shahid Abbas for Respondent.

ORDER

This is Revenue appeal against order of the CIT(A) vide No.22951, dated 23-12-2003 on the ground that the first appellate authority was not justified to cancel the selection of the case under para. 9(a)(ii) of C.B.R.'s Circular No.7 of 2002 without any solid reasons:

Learned DR and the AR have been heard.

This case was selected for total audit under para.9 (a)(ii) of C.B.R.'s Circular No.7 of 2002 by the RCIT. The Hon'ble High Court disapproved the selection of cases for processing under total audit with the following observations:

"Since admittedly all the cases of the petitioners were selected for process under normal law on the basis of the guidelines issued after filing of the returns these cannot be approved on any legal, moral or ethical basis. Therefore, for the reasons earlier detailed in the previous para, I will allow these petitioners and hold that their selection for total audit on the basis of guidelines was improper."

Following the judgment of the Hon'ble High Court the CIT(A) directed to accept the assessee's declared income under self-assessment scheme.

The learned AR also referred to judgment of the Lahore High Court reported as 2006 PTD 538 wherein it has been stated that the Hon'ble Supreme Court has granted leave to appeal against the judgment passed in Sahib Textile Pvt. Ltd. and other eases on this issue but while granting the leave the impugned judgment was not suspended by the apex Court. Thus the learned AR emphasized that earlier judgment of the Hon'ble High Court referred to in the order of the CIT(A) hold the field and is binding on the Department. When the CIT(A) has followed the judgment of the Hon'ble High Court which he was bound to do, it is surprising to note that the Department says that the CIT(A) directed for acceptance of the case without any solid reasons. Such type of arguments are unwarranted and need to be avoided. Revenue appeal being without merit is rejected.

C.M.A./113/Tax (Trib.)Appeal rejected.