I.T.As. Nos. 1322 and 1323(IB) of 2004, decided on 15th June, 2005. VS I.T.As. Nos. 1322 and 1323(IB) of 2004, decided on 15th June, 2005., 2006 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 421 (2005)

Income Tax Ordinance (XXXI of 1979)-

----Ss. 59, 62 & 134---Filing of return under Self-Assessment Scheme---Appeal to Appellate Tribunal---Return filed by the assessee for the relevant two years under Self-Assessment Scheme was not accepted for the reason that declared income was less than last assessed income---Commissioner Income Tax (Appeals) on appeal directed the Assessing Officer to accept declared version of the assessee---Department had filed appeal before Appellate Tribunal---Assessee had stated that status of company of assessee during period under consideration was changed from registered firm to that of association of persons; that previously the firm consisted of three partners, whereas present association of persons had two members, one of them was partner in the previous firm---Contention of the Department regarding succession of business, did not hold weight because proceedings for the two years under appeal in the case of registered firm were filed by the same Assessing Officer on the basis of deed of dissolution and form-H, etc.---Capital in new business in the status of association of persons was less than that of the registered Firm and one of the members of association of persons was partner in the registered firm, whereas other was a new one---Declared version of assessee for the relevant two years was rejected for the reason that declared income was less than last assessed Income, which was unjustified because firm's case had no relevancy with the case of assessee being association of persons---Commissioner Income Tax (Appeals), in circumstances, had rightly directed the Assessing Officer to accept returns under Self-Assessment Scheme for both the years---Departmental appeals stood rejected, in circumstances.

Mirza Khan, D.R. for Appellant.

Mir Asad Khan for Respondent.

Date of hearing: 2nd June, 2005.

ORDER

MRS. ABIDA ALI, (ACCOUNTANT MEMBER).---These two departmental appeals are directed against the combined order of learned CIT(A), dated 17-8-2004 wherein assessee's appeals were accepted and Assessing Officer was directed to accept the returns for both the years under SAS.

2. The impugned order has been contested on the following common ground:--

"That the learned CIT(A) was not justified in directing to accept the return under Self-Assessment Scheme as the nature of business and successor/occupiers of the business is the same, therefore, the return filed did not qualify for acceptance under SAS."

2-A. Brief facts of the case are that assessee/respondent filed returns for assessment years 2001-2002 and 200-2003, declaring net income at Rs.123,229 and Rs.160,314, respectively under Self-Assessment Scheme. Assessing Officer did not accept the returns for the reason that the declared income is less than the last assessed income and assessments for both the years were completed under section 62 of the repealed Ordinance, 1979 at net income of Rs.250,000 and Rs.300,000, respectively. On appeal; as mentioned earlier, the learned CIT(A) directed the Assessing Officer to accept the declared version.

3. Both the parties were heard. The learned DR submitted his arguments as per common ground of appeal. On the other hand, the learned AR stated that status of the company during the period under consideration changed from RF to that of an AOP; that previously the firm consisted of three partners, whereas the present AOP has two members one of them was partner in the previous firm. He also mentioned that new NTN has been allotted to the AOP and the returns were filed under SAS and the acknowledgement receipts were deemed to be the assessment order.

4. After having heard both the parties and having examined the record; we have come to the conclusion that the contention of the department regarding succession of business does not hold weight because proceedings for the two years under appeal in the case of registered firm were filed by the same Assessing Officer on the basis of deed of dissolution and form-H, etc. Further the capital in the new business in the status of AOP is less than that of the registered firm and one of the members of the AOP was partner in registered firm, whereas the other is a new one. We may also mention that the declared version for the two years was rejected for the reason that the declared income was less than the last assessed income, which is unjustified because the firm's case has no relevancy with the case of assessee/respondent being an AOP. In view of the aforementioned reasons; we are of the opinion A that the learned CIT(A) has rightly directed the Assessing Officer to accept the returns under SAS for both the years. As such, his order is upheld and the departmental appeals stand rejected.

H.B.T./467/Tax (Trib.)Appeals rejected.