I.T.A. No.3412/LB of 2003, decided on 23rd February, 2005. VS I.T.A. No.3412/LB of 2003, decided on 23rd February, 2005., 2006 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 597 (2005)

2006 P T D (Trib.) 597

[Income-tax Appellate Tribunal Pakistan]

Before Khawaja Farooq Saeed, Chairperson and Javed Tahir Butt, Accountant Member

I.T.A. No.3412/LB of 2003, decided on 23/02/2005.

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

----Ss.156, 62 & 80C---C.B.R. Circular No.1(155)DTO-11/94, dated 28-5-1995---C.B.R. Circular No.12 of 1991, dated 30-6-1991---Rectification of mistake---Assessment was framed under S.62 of the Income Tax Ordinance, 1979---Appeal against such order was' filed which was decided by the First Appellate Authority---On direction of Revenue Audit, order under S.156 of the Income Tax Ordinance, 1979 was filed by the Assessing Officer where assessment was completed under S.80C of the Income Tax Ordinance, 1979 and tax was levied on the turnover---First Appellate Authority set aside the order passed under S.156 of the Income Tax Ordinance, 1979---Proceedings were taken over by the Income Tax Panel and after examination of account an order under Ss.132/62 of the Ordinance was passed wherein the assessment was again made according to the provision under S.80C of the Income Tax Ordinance, 1979---Such order was again set aside by the First Appellate Authority---Validity---Held, there were so many doubts in respect of earlier proceedings that the mistake floating on the surface of order was not apparent---Facts of the case gave a very clear and unequivocal picture that present was not a case of, mistake at all-Non- filing of declaration was not a mistake---Case being that of misapplication of facts as well as of law the proceedings initiated by the Panel were held to be totally illegal and were annulled by the Appellate Tribunal.

2003 PTD 1093; 2000 PTD (Trib.) 329; 2002 PTD 283; C.I.T. v. National Food Laboratories case; T.S. Blaram I.T.O. v. Volkart Brother's case 1998 PTD 1379; 58 Tax 37; Messrs Glaxo Laboratories Ltd. v. Inspection ACIT 1992 PTD 566; (1997) 118 ITR 585; 2003 PTD 279; 2001 PTD 3810; 2004-90 PTD 128 (sic); 155 ITR 568; (1999) 80 Tax 1 (Trib.); 1960 PTD 727 and PLD 1989 SC 222 ref.

(b) Income-tax---

---Change of opinion---Principle of change of opinion can only be applied in circumstances where it can be shown that all facts were consciously considered by the Assessing Officer before coming to a conclusion.

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

---Second Sched., Part-IV, Cl. (9)---Exemption from specific provisions---Declaration---Separate declaration is necessary for opting out of the Presumptive Tax Regime.

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

----Second Sched., Part-IV, Cl. (9)---Exemption from specific provision---Golden principle of interpretation---Law must be applied in its actual spirit---When law provides for specific separate procedure and says that an irrevocable declaration should be filed in addition to filing of return, it cannot be said that the provisions have been added without any purpose and that the same were redundant---Redundancy and superfluousness cannot be attributed to the legislature.

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

----Second Sched., Part-IV, Cl. (9) & S.55---Exemption from specific provisions---Question was whether filing of return amounts to an irrevocable option under Cl. (9) of Part-IV of the Second Schedule of the Income Tax Ordinance, 1979---Validity---Legislature had directed the manufacturers to file an irrevocable declaration for opting out of Presumptive Tax Regime, the same was not to be ignored while making an assessment---Not only that the language speaks of filing an irrevocable option in writing, but it also says that the same shall be along with the return of total income under S.55 of the Income Tax Ordinance, 1979---Before finalizing an assessment, Assessing Officer needs to check as to whether requirements have been fulfilled as prescribed by law.

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

---S.156---Rectification of mistake---Mistake of fact as well as of law---Term `mistake apparent from record' had been discussed many a time in various judgments and there was consensus in judicial forums that the words as used in S.156 of the Income Tax Ordinance, 1979 include mistake of fact as well as of law.

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

---S.156---Rectification of mistake---Section 156 of the Income Tax Ordinance, 1979 applies on those errors only which are glaring, obvious, self-evident and do not require a long drawn process of reasoning or examining arguments of points or where there may conceivably be two opinions and it should be clear and appear like something floating on the surface of the water, meaning thereby that to call it a mistake, no discussion is required.

(h) Interpretation of statutes---

---Notification---Notification was not an Act of Parliament, it was a proclamation and, it could not have become law unless it was to be published in the gazette.

(i) Interpretation of statutes---

----Act of Parliament---In English law the rule is that Act of Parliament becomes law from the first movement of the day on which it receives the Royal Assent, unlike the same the royal proclamation becomes law with its publication in the official gazette.

(j) Interpretation of statutes---

----Notification---Notification issued on the behest of the Government, by the Central Board of Revenue, if is not published in the official gazette, its knowledge to the public at large, remains doubtful.

(k) Income-tax---

----Special laws made to regularize a procedure for a person who had to file return on 31st of July---Assessee per chance for personal reasons filing delayed return up till 31st of August---Notification issued on 24th August could not be said to have created a legal bar against the assessee.

(l) Income-tax---

----Filing of return---Law of natural justice requires announcement of a clear position of relevant law and rules for everyone for filing of return before one is supposed to file it.

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

----Second Sched., Part-IV, Cl. (9)---Exemption from specific provisions---Declaration with return---Instruction came on 24th of August and was published somewhere later, it could not be held valid for the returns filed earlier or even for return filed on the 30th of August, 1991.

155 ITR 568 rel.

(n) Interpretation of statutes---

----In legal framework the instructions that provide remedy are retrospective and can be applied at any stage of the proceedings in a case.

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

----S.156 & Second Sched., Part-IV, Cl. (9)---C.B.R. Circular No.12 of 1991, dated 30-6-1991---Rectification of mistake---Declaration---Assessment finalized under normal law was rectified under S.156 of the Income Tax Ordinance, 1979 by holding that non-declaration by the assessee was a mistake apparent from record---Validity---Held, there was no mistake either on the part of the assessee or on the part of the Assessing Officer --Assessee was neither aware of any such additional requirement nor was ever made wiser by Assessing Officer during the course of proceedings---Since requirement of filing declaration was along with filing of return, this requirement was not be later fulfilled---Since Assessing Officer made the assessment consciously and after dealing with all connecting issues he neither asked for statement under S.143-B of the Income Tax Ordinance, 1979 nor made any calculation of tax as was the then requirement under C.B.R. Circular No.12 of 1991---Acceptance of return under S.55 of the Income Tax Ordinance, 1979 was not a mistake.

155 ITR 568 and 1960 PTD 727 rel.

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

---S.8---All officers to follow the orders of the Central Board of Revenue---Section 8 of the Income Tax Ordinance, 1979 made all instructions of Central Board of Revenue to be binding on all subordinate officers.

PLD 1989 SC 222 rel.

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

----Ss.156, 62, 143-B, 80C & Second Sched., Part IV, Cl. (9)---Rectification of mistake---Declaration---For assessment year 1991-92 in the case of those assessees whose accounts stood closed on or before 31st of December, 1990, filing of a separate declaration was not a requirement---Assessment framed later ignoring such a declaration was not mistake apparent from record.

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

---Ss.61, 56 & 156---Notice for production of books of accounts, etc.---Issuance of notice---Notification under S.61 of the Income Tax Ordinance, 1979 could be issued during the pendency of a return or where a notice under S.56 of the Income Tax Ordinance, 1979 had been issued, but not where assessment had already been finalized or where an order is to be amended by rectifying a mistake on record.

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

---S.156---Rectification of mistake---Plain reading of S.156 of the Income Tax Ordinance, 1979 did not provide any room for making an assessment upon a finalized assessment.

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

----S.156(2)---Rectification of mistake---Opportunity of being heard---Opportunity of being heard to the assessee was to be provided under S.156(2) of the Income Tax Ordinance, 1979, which could be in the shape of a letter describing the nature of the mistake and indicating the rectifications, which,need to be carried out.

(u) Income-tax---

----Assessment---Wrong mentioning of section did not vitiate an assessment.

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

----Ss.61, 55 & 56---Notice for production of books of accounts, etc.---Jurisdiction---Assessing Officer acquires jurisdiction for issuance of notice under S.61 of the Income Tax Ordinance, 1979 where a return of income had been filed by the assessee, or a notice under S.56 of the Income Tax Ordinance, 1979 had been served upon him.

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

----S.156---Rectification of mistake---Cancellation or re-opening an assessment---"Rectification" is a very limited term however, it was carried out without cancelling or reopening an order---Such rectification did change the shape but the original order remained intact for all legal and practical purposes subject to modification by way of rectification of a mistake.

(x) Interpretation of statutes--

----Law should always be applied in its natural meanings and in its, literal sense---Intendments beyond the language of law by way of interpretation and reducing facilities by self-generated meanings cannot be permitted by any Court.

Naeem Akhtar Sheikh, F.C.A. along with Jalal Ahsan, A.C.A. for Appellant.

Shahid Jamil Khan, L.A. and Dr. Shahid Siddique Bhatti, D.R. for Respondent.

Date of hearing: 25th January, 2005.

ORDER

This appeal has been filed by the assessee on the basis of following grounds:---

(1) That the Honourable Commissioner of Income Tax (Appeals) erred in holding that contention regarding filing of proceedings is not proved from record.

(2) That the Honourable Commissioner of Income 'Tax" (Appeals) was not justified in rejecting the contention of the appellant relating to change of opinion.

(3) That the order under section 62 dated 25-6-1994 stood merged with appellate order of C.I.T. (Appeals) Zone-III, Lahore dated 28-2-1996 and therefore could not be rectified under section 156 of Income Tax Ordinance, 1979 by the learned Assessing Officer.

(4) That the learned Assessing Officer was misdirected in law in passing order under section 62/132 of the Income Tax Ordinance dated 27-6-2001, when proceedings were set aside under section 156, hence the order passed is illegal.

(5) That the original proceedings under section 156 of the Income Tax Ordinance, 1979 were initiated on the instructions of Audit & Inspection Department, which do not constitute income-tax authority and hence not warranted by law and without legal authority.

(6) Without prejudice to the earlier grounds, the learned Commissioner of Income Tax(A) was not justified in not adjudicating on the legal ground placed before him that once it is held that a transaction was covered under presumptive tax regime then all subsequent, actions had to be carried out under the same.

(7) Without prejudice to the grounds already submitted, the depreciation allowance available to the company in terms of 3rd Schedule to the Income Tax Ordinance, 1979, may be allowed to carry forward from the assessment year 1991-92.

Brief facts leading to this appeal are as follows:---

The appellant is a public company, which owns and operates a spinning mill. This was the first year of appellant business. Return for the income year ending 30-9-1990 relevant to the assessment year 1991-1992, was filed declaring a net loss of Rs.59,278,901 under normal law. After service of notice under section 61 and production and. examination of accounts, the assessment was framed by the D.C.I.T. under section 62 on 25-6-1994 at a loss of Rs.55,667,331. Aggrieved by some parts of the assessment order, the appellant filed an appeal against the said order, which was decided by the C.I.T.(A) on 28-2-1996.

On the directions of .the Revenue Audit, an order under section 156, was passed by the Assessing Officer where assessment was completed under section 80C and tax was levied @ 2.5% on the A turnover. On appeal, the learned C.I.T.(A) set aside the order i.e. the order under section 156. Thereafter, the proceedings were taken over by the Income Tax Panel and notice under section 61 was served and after examination of account an order under section 132/62 was passed by the Panel wherein the assessment was again made according to the provision under section 80C by computing the tax @ 2.5% of the turnover. On further appeal, the C.I.T.(A) again set aside the order. It is against this order that the appellant is in the present appeal.

The sequence of the proceedings can be summed up as follows:--

(a) First order was passed under section 62 dated 25-6-1994.

(b) The appellate order under section 132 against above assessment is dated 28-2-1996.

(c) Order under section 156 rectifying order, dated 25-671994 was passed on 11-5-1998.

(d) The order under section 156 was set aside by the C.I.T.(A) vide appellate order under section 132, dated 3-11-1999.

(e) In pursuance to the said appellate order the Income Tax Panel framed an assessment on 27-6-2001 under section 62.

(f) An appeal was filed by the assessee against which the order of the Panel is set aside.

(g) The assessee is now before us against set aside order.

The A.R. after going through the above facts commented that it can well be appreciated that section 61 is part of Chapter VII, which contains the procedure of assessment. In the scheme of assessment a notice under section 61 is followed by an order under section 62 or 63. Going through the order dated 27-6-2001 leads one to conclude that the Panel passing the order was under the wrong impression as if it was a case of regular assessment which actually was not the case. There was already an order in existence passed on 25-6-1994 another order under section 62 therefore, is duplication. This order passed by the Panel on 27-6-2001 was, therefore, illegal and without jurisdiction. The learned C.I.T.(A) should have cancelled this order instead of setting it aside.

The A.R. further submitted that the proceedings set aside by the C.I.T.(A) on 3-11-1999 are hit by limitation as well. The period for issuance of, order under section 66 for order under section 156 expired on 30-6-2001. The order passed under section 62 needs to be annulled being illegal.

The next limb of A.R's. arguments was that it is a case of change of opinion. He argued that section 156 can only be used for mistakes, which are patent and apparent from record. This section cannot be invoked on issues which have already been considered by the Assessing Officer as the same tantamount to change of opinion and is not covered by the provision of section 156.

He commented that the sales made to Zahid Corporation (Pvt.) Limited, have been treated as supplies in the above order under section 156 on the grounds that no declaration for opting out of the presumptive tax regime has been filed.

The above information was very well in the knowledge of Assessing Officer during the, course of original hearing under section 62. This fact is evident from page 2 of the body of assessment order where the Assessing Officer in para. 3, while discussing the sale, has remarked as under:---

"Similarly, out of local sales 95% of the supplies had been made to Zahid Corporation (Pvt.) Ltd. Montgomery Bazar, Faisalabad and the balance sales have also been made to other verifiable parties."

Similarly, the non-filing of declaration for opting out of the scheme was also before him as is evident on page I of the order, where he has discussed the documents filed by the assessee with return. The relevant part of the order on page-I, is reproduced as under:---

"Return for the above year was filed on 31-8-1991 declaring a net loss of Rs.59,278,901. The return was accompanied with income statement, tax depreciation schedule, tax challans and annual accounts for the year."

It is apparent from the above that the Assessing Officer was fully aware of the fact that no separate specific declaration has been filed and the appellant-Company had made supplies to Zahid Corporation (Pvt.) Ltd. and accordingly after considering the above facts, he chose to pass assessment order under section 62. Therefore, having considered all the facts and taken his decision, the Assessing Officer cannot come to a new conclusion as it would tantamount to change in opinion.

We are conscious of the various decisions of superior Courts, which say that the principle of change of opinion can only be applied in circumstances where it can be shown that all facts were consciously considered by the Assessing Officer before coming to a conclusion.

In fact, the issue of non-filing of declaration to opt of presumptive regime was condition precedent for the assessment to assessment in the above case. The first matter to be considered by the Assessing Officer, therefore, was that whether a declaration has been filed or not and in case of non-filing of declaration whether the case would fall under Presumptive Tax Regime or not.

The assumption that the condition precedent for acceptance of the case in normal regime could have been ignored by the Assessing Officer and that it was not consciously considered is not free from doubts. Therefore, the above matter on which an opinion has already been formed under section 62 cannot be taken as a matter of rectification under section 156 the A.R. argued.

He drew our attention towards case decided by Honourable Sindh High Court cited at 2003 PTD 1093, wherein it was held that on re-examination of same material if the Assessing Officer comes to a different conclusion, it becomes a case of change of opinion as it cannot be assumed that a condition precedent to assessment was not consciously considered. The relevant extract is reproduced as under:---

"Mr. Aqeel Ahmed Abbasi, learned counsel for the Department has contended that, the C.I.T.(A) and the I.T.A.T. have merely presumed that, the Wealth Tax Return was filed along with the Income Tax Return, although there is nothing on record to establish this fact. However, when confronted with the question as to how the Assessing Officer accepted the return in the Self-Assessment Scheme if the condition precedent for acceptance thereof was not fulfilled, the learned counsel for the Department was not able to furnish any explanation.

His second contention is that, even if it is assumed that the Wealth Tax Return was filed along with the Income Tax Return and the information forming basis for re-opening of assessment was already available with the Assessing Officer, still the principle of change of opinion is not attracted because there was no conscious application of mind to the fact. In this regard, he has placed reliance on a Division Bench judgment of this Court, in the case of Messrs National Beverages (Pvt.) Limited v. Federation of Pakistan 2001 PTD 633.

We have perused the cited judgment with the assistance of Mr. Aqeel Ahmed Abbasi. It has been held that, the principle of change of opinion shall not be attracted even in the case of normal assessment under section 62 of the Income Tax Ordinance, 1979, if conscious application of mind is not shown by the Assessing Officer at the time of first assessment.

We respectfully agree with the law as propounded in the' cited judgment, but are of no help to Mr. Aqeel Ahmed Abbasi, for the simple reason that in the cited case, the conscious application of mind to the material available on record was not condition precedent for the finalization of assessment. While in the present case, the filing of Wealth Tax Return along with the Income Tax Return was a condition precedent and therefore, the Assessing Officer was obliged to scrutinize the Wealth Tax Return and on scrutiny of the said document, if any concealment was detected to exclude the return of income from the purview of Self-Assessment Scheme, therefore, it can be inferred that the Wealth Tax Return, which was available on record was examined and initially the Assessing Officer did not find any case of concealment of income.

It is an established principle of change of opinion that if on examination of the same material, which was earlier examined by the Assessing Officer, he comes to a conclusion different from the one already arrived at by the earlier examination of the information, then it is a case of change of opinion.

In the above circumstances, we are satisfied that, the Income Tax Appellate Tribunal has rightly considered all the aspects of the law and fact and has rightly decided the issue and has correctly rejected the reference application to which no interference is required. The direct reference application under section 136(2) of the Income Tax Ordinance stands dismissed in limine."

The A.R. further referred 2000 PTD (Trib.) 329 where it has been held that there is a presumption in law that before accepting the return under Self-Assessment Scheme, the Assessing Officer had ensured that it qualifies for the same and with the result assessment cannot be re-opened on the basis of re-examination of some material as it would amount to change of opinion. The relevant extract of the said case law is reproduced as under:---

"6. Respectfully following the principle laid down, it is held that there would be a presumption in law that before accepting the return under Self-Assessment Scheme, the Assessing Officer has ensured that it qualifies for being processed under Self-Assessment Scheme and for that purpose a material on record must have been examined with the result that the assessment cannot be re-opened on the basis of re-examination of same material as it would amount to change of opinion.

7. For the foregoing reasons, it is held that the re-opening of assessment was not justified. As we have held that the re-opening of assessment was not unjustified, therefore, all subsequent proceedings in pursuance thereof would be held to be without jurisdiction and, therefore, we need not examine the issue relating to the additions made on re-opening hereby quashed and the original assessment order stands restored. The appeal is allowed accordingly."

Similar view was given by ITAT in case cited as 2002 PTD 283 (para. 9).

Drawing strength from the above, the A.R. submits that all material being available on file before the learned Assessing Officer while framing the original assessment any later after thought falls in the nature of change of opinion which is not sustainable.

The next argument of learned A.R. was that if on an issue further arguments and investigation is required that matter goes out of the ambit of section 156. The mistake as may be amended under the said section has to be a mistake apparent from record. The alleged mistake 'sought to be rectified in the instant case does not constitute a mistake apparent from the record. The term `mistake apparent from record' has been defined by the Hon'ble Supreme Court of Pakistan in a landmark judgment in the case of C.I.T. v. National Food Laboratories, the relevant extract of which is reproduced as under:---

"Section 35 of the repealed Income Tax Act, 1922, hereinafter referred to as "The Act" confers a power to rectify any mistake in the order which is apparent from the record. Such power can be exercised suo motu or if it is brought to the notice by an assessee. Therefore, essential condition for exercise of such power is that the mistake be apparent on the face of record; mistake which may be seen floating on the surface and does not require investigation or further evidence. The mistake should be so obvious that on mere reading the order, it may immediately strike on the face of it. Where an officer exercising power under section 35 enters into the controversy investigates into the matter, reassesses the evidence takes into consideration additional evidence and on that basis interprets the provision of law and forms an opinion different from the order, then it will not amount to "rectification" of the order. Any mistake which is not patent and obvious on the record cannot be termed to be an order which can be corrected by exercising power under section 35. In this regard reference can be made to Shaikh Muhammad Iftikharul Haq v. Income Tax Officer, Bahawalpur PLD 1966 SC 524 and Pakistan River Steamer Limited v. Commissioner of Income 1971 PTD 204. In the present case the mistake pointed out by the petitioner was not of a nature to attract section 35 and, therefore, the High Court has correctly answered the first question in the negative."

A similar view was expressed by Hon'ble Supreme Court of India in T.S. Blaram I.T.O. v. Volkart Brothers. It held:

"A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinion."

In the present case, the mistake could not be found on mere reading of the order as it would be possible to know that whether declaration was filed or not. In order to precede one needs to investigate and check the proceeding record to find out the position of declaration to proceed in the matter.

It is submitted that the above matter is beyond the scope of rectification of mistake as envisaged under section 156 as it needs rectification and fails to fulfil the criteria laid down by the Hon'ble Supreme Court as there was no mistake floating on the surface of the order.

Furthermore, in the present case, there are so many issues involved which needed enquiry and adjudication, the A.R. remarked. In this behalf an extract from the order of the Panel under sections 62/132 dated 27-6-2001, would be of interest. The second paragraph of the order on page 1 reads as under:---

"After going through the grounds of appeal and written ' arguments, the learned C.I.T. Appeals Zone-II, Lahore, has framed six main issues which have been discussed in the body of the order."

It was such a mistake that required a sufficiently long process of reasoning on points about which there are more than one opinion. It will be appreciated that two different Commissioners (Appeals) wrote 10 pages orders each setting aside the order passed under section 156 and directing the Assessing Officer to frame the order after examining the various issues involved. A case where so many issues are involved which need enquiry and also issues on which there are multiple opinions cannot be termed "a mistake apparent from record".

Our attention was drown to the case decided by the Hon'ble ITAT cited as 1998 PTD 1379 wherein while discussing the provisions of section 156 the Hon'ble ITAT in para. 6 of the order remarked:---

"It was for the assessment year 1994-95, only when tax on the interest income for this assessment year had been directly charged according to rates laid down in the First Schedule to the Income Tax Ordinance. He argued therefore, that for the assessment years 1992-93 and 1993-94, the action taken by the Assessing Officer amounted to a change of opinion since the taxing of the interest income for these two years @ 10% as per original assessments was the result of full deliberation of the facts and legal position in the case. The alleged mistake was not one which could be immediately deducted on examination of the record. The Assessing Officer had arrived at the conclusion that tax had not been properly charged after exhaustive deliberation of the contents of section 80-B of the Income Tax Ordinance read with clause (32) of section 2 thereof. The action of the Assessing Officer to arrive at this conclusion was the result of a long drawn out process of debate and argumentation. The alleged mistake committed by the Assessing Officer in the original assessments made under section 62 of the Income Tax Ordinance was not, therefore, a mistake apparent from the record. If a provision of the law is capable of different interpretation on the basis of arguments, the original conclusion drawn by the Assessing Officer on the basis of some of these arguments cannot be considered to be a mistake apparent from record as envisaged in section 156 of the Income Tax Ordinance. It was further argued that the view that the action taken by the Assessing Officer under section 156 was change of opinion, is indicated by the fact that the I.T.O. initiated the proceedings under this section only after C.B.R. Circular No. 80(1) DTB 91-B dated 1-10-1994 was received as up till that time the Assessing Officer was sure that the acceptance of the contention that the provision of section 80-B applied to the case of a company, was correct."

Thus, the action contained in the order of the Assessing Panel was clearly outside the ambit of section 156, the A.R. concluded his argument on the issue.

Before processing further, the A.R. said that the original notice on the above matter was issued on 23-3-1996 and the then Assessing Officer after having been satisfied with the reply of the assessee dropped the proceedings. The filing of the proceedings tantamounts to passing of assessment order. The subsequent order amounts to multiplicity of the proceedings which is not legal. The above view point had already been confirmed by the various superior Courts re: 58 Tax 37.

Commenting upon the doctrine of merger, the A.R. repeated that in the case of Messrs Glaxo Laboratories Ltd. v. Inspection ACIT 1992 PTD 566 (SC) it has been held that when Appellate Authority passes an order on an assessment order, the same merges with the appellate order and becomes the order of the Appellate Authority and cases to be the order of the Assessing Officer. Thus after the appellate order, an Assessing Officer cannot amend the assessment order under section 156 as there is no order passed by him in the field.

The provisions of section 156 are more or less the same as those of section 154 of the Indian Income Tax Act, 1962. In India, in order to overcome the consequences of this doctrine of merger, the following provision was inserted:--

"(1A) Where any matter has been considered in any proceedings by way of appeal or revision relating to an order referred to in subsection (1) the Authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that subsection in relation to any matter other than the matter which has been so considered as decided."

In repealed Income Tax Ordinance, 1979, a similar provision exists in section 66A in the form of subsection (1A) but not in section 156. In the absence of such a provision in section 156, the "doctrine of merger" precludes the Assessing Officer from amending the assessment order after such 'assessment order has been subject-matter of an appeal, irrespective of the fact when the matter under amendment was a subject in appeal or not. Thus, the order passed under section 156 was totally without jurisdiction and should have been annulled by the learned C.I.T.(A).

Still further the rectification having been initiated on the basis of directions of audit authorities is illegal. In support of above argument the A.R. brought our attention to section 156(1) of the Income Tax Ordinance, 1979 as under for the purpose of reference:---

"Rectification of mistake.---(1) Any Income Tax Authority or the Appellate Tribunal may amend any order passed by it to rectify any mistake apparent from the record on its own motion or on such mistake being brought to its notice by any other Income Tax Authority or by the assessee."

It is apparent from the plain reading of the above that the order under section 156 can be passed by Assessing Officer either at his own motion or on a matter referred by the Income Tax Authority or brought to notice by the assessee. It was submitted that Income Tax Authorities has been defined in section 3(1) of the Income Tax Ordinance, 1979 which is reproduced as under:---

"(3) Income Tax Authorities.---(1) There shall be the following classes of Income Tax Authorities for the purposes of this Ordinance, namely:---

(a) Central Board of Revenue.

(aa) Regional Commissioner of Income Tax.

(b) (Director-General of Investigation & Intelligence).

(bb) Director-General of Training & Research.

(bbb) Director-General of Tax Withholding.

(c) Commissioner of Income Tax.

(d) (Additional Commissioners) of Income Tax, who may be either Appellate (Additional Commissioners) of Income Tax or Inspecting (Additional Commissioners) of Income Tax:

(dd) Income Tax Panels;

(e) (Deputy Commissioner of Income Tax) and

(f) Inspectors of Income Tax."

The A.R. argued that from the plain reading of the above, it can be appreciated that the Audit and Inspection Department is not the Income Tax Authority. Therefore, any proceeding on their directions is beyond the scope of the provision of section 156. We may submit that the Director-General of inspection is created under Chapter XIII(b) of the Income Tax Ordinance, 1979 and has been intentionally kept out of the definition of the Income Tax Authority by the legislation.

He drew our attention towards notice issued under section 156 dated 25-3-1998, the relevant extract of which is reproduced as under:---

"During the course of Audit & Inspection conducted by the Audit Authorities non-levy of tax under section 80(c) @ 2.5% has been pointed out vide Audit para. No.5.3."

It is apparent from the plain reading of the above that the above notice was issued on the directions of the Director of Inspection and Audit and was, therefore, outside the scope of section 156, the A.R. added.

Reference was made to the following case-laws in support of the contention:---

Indian jurisdiction:	(1997) 118 ITR 585
Pakistan Jurisdiction:	2003 PTD 279; 2001 PTD 3810; 2004-90 PTD 128 (sic).

He argued that the Income Tax Panel made a serious error in law by passing order under section 62 as the case which was set aside was under section 156 and the Income Tax Panel was supposed to conduct its proceedings under section 156 on the specific issue of rectification. The very issuance of notice under section 61 and consequent assessment in the presence of the earlier order which was intact for all practical purposes as was neither cancelled nor was reopened either under section 66-A or section 65 was said to be illegal.

Even otherwise in this case filing of a declaration was not possible. The appellant has a special income year from 1st October to 30th September. The return for the income year starting from 1st October, 1989 to 30th September, 1990 was due on 31st July, 1991. By Finance Act, 1991, Presumptive Tax Regime consisting of sections 8-C & 80-CC were introduced in the tax law. Later on a concession was given to manufacturers by inserting clause (9) in Part-IV of the Second Schedule of the Income Tax Ordinance, 1979 by S.R.O. No.829(I)/91 dated 24-8-1991 requiring them to file a written declaration along with return in case they wish to opt out of the presumptive tax regime. This S.R.O. was neither printed nor made public till the date of filing return. The return was due on 31st July, extension of one month was obtained and thereafter the return was filed by the appellant on 30th August, 1991 without any written declaration to opt out of the presumptive tax regime.

He argued that the above notification was not effective from the date of its issue rather from the date of its publication for the information of the general public.

The A.R. referred 155 ITR 568, decided by Madras High Court in the case of Asia Tobacco Company Ltd. v. Union of India and others. The relevant extract of the case-law from pages 588 and 589 thereof, is given as under:--

"The mere printing of the official Gazette containing the relevant notification and without making the same available for circulation and putting it on sale to the public will not amount to "notification" within the meaning of R.8(1) of the Rules. The intendment of the notification in the official Gazette is that in the case of either grant of withdrawal of exemption, the public must come to know of the same. "Notify" even according to the ordinary dictionary meaning would be "to take' note of, observe; to make known, publish, proclaims; to announce; to give notice to; to inform." It would be a mockery of the rule to state that it would suffice the purpose of the notification if the notification is merely printed in the official Gazette, without making the same available for circulation to the public or putting it on sale to the public. The communication from the Department of Publication, Government of India, dated April 23, 1983, as the extract containing the withdrawal notification was placed on sale for the public only on withdrawal notification was placed on sale for the public only on December 8, 1982. Without a proper notification in the sense, without putting the public on notice of the same, it is not possible to enforce the withdrawal of the exemption earlier accorded. It is not a case of printing may be anterior to the publishing and releasing to the public, the notification, on the same date which the official Gazette bears. Neither the date of the notification nor the date of printing nor the date of the Gazette counts for "notification" within the meaning of the rule, but only date when the public gets notified in the sense the concerned Gazette is made available to the public. The date of release of the publication is the decisive date to make the notification effective. Printing the official Gazette and stacking them without releasing to the public would not amount to notification at all. But, so far as the petitioner is concerned, re-find that by the communication from the third respondent dated December 6, 1982, which obviously was received by the petitioner on December 7, 1982, the petitioner was put on notice of the withdrawal notification. Hence, the withdrawal notification must be held to be effective so far as the petitioner is concerned only from December 7, 1982. The consequence of lack of due notification is that the withdrawal notification became effective so far as the petitioner is concerned only and from December 7, 1982. It had no legal efficacy anterior to that date. The respondents have not denied the factual position that the official Gazette containing the withdrawal Notification, though dated November 30, 1982, was in fact placed on sale for the public only on December 8, 1982. The respondents are taking up a stand that the petitioner is expected to be aware of the withdrawal Notification and that the words "publish in the office Gazette" and the words "put up for sale to public "are not synonymous and offering for sale to the public is a subsequent step which cannot be imported into the Act, and the respondents are expressing similar stands. They could not be of any avail to all the respondents to get out of the legal implications flowing from want of due notification, as exemplified above. Printing the notification in the official Gazette, without making it available for circulation to the concerned public, or placing it for sale to the said public, would certainly not satisfy the idea of notification in the legal sense. One of the stands taken by the respondents is that the officers concerned have been informed by telex by the Government regarding the withdrawal notification, as if that would suffice the conception of due notification. A similar contention was repelled by the Supreme Court in State of MP v. Rana Ragubir Prasad AIR 1979 SC 888, by pointing out "contextually speaking, we are satisfied that "publication" means more than mere communication to concerned officials or Department". If this is the legal and factual position, then, with regard to W.P. No.6049 of 1984, it will stand allowed and a writ of declaration will issue declaring that the withdrawal Notification took effect only from December 7, 1982, so far as the petitioner is concerned."

Referring C.B.R.'s Circular No.1(155) DTO-11/94, dated 28th May, 1995 wherein a relief was allowed to case in which the return was due on 31st July, 1991, he said that even this highest administrative forum was conscious of this disadvantage to such taxpayers.

The A. R. in his concluding arguments said that whether non-filing of the undertaking mentioned in clause (9) of Part-IV of the Second Schedule is fatal to the case of the appellant is also answered in favour of the assessee by the Tribunal. In the case cited as 1999 PTD (Trib.) 2289 after detailed discussion of all issues involved a Division Bench of this Tribunal held as under: ---

"Since the option is to be exercised every year, the filing of separate declaration is a mere formality. Where an assessee files the return but fails to file the option with the return, this failure cannot be considered fatal to his claim of opting out of the presumptive tax regime."

The question of failure to file the application, appeal, etc. in the prescribed form or failure to attach prescribed documents etc. have come before the superior Courts in a large number of cases and it has been the persistent view of the judicial authorities that where the compliance of law is a formality, any failure to comply with such requirement is not fatal to the claim of the assessee. This view is not only held by the Courts of Pakistan and Indian Jurisdiction but also by the Courts in the United Kingdom.

In support of the argument that want of form cannot make return invalid he referred:---

1960 PTD 727 (H.C. Karachi).

PLD 1989 SC 222.

Nishat Mills Ltd. v. Superintendent of CE.

PLD 1983 SC 693.

The A.R. finally informed that the treatment of the Department has not only resulted in taxation of receipts under presumptive tax but has also resulted in disallowance of entire accelerated depreciation allowance and normal depreciation allowance amounting to Rs.73 million. That the Department has not allowed to carry forward since there is no total income taxable under normal law.

The D.R. rebutting the arguments of A.R. firstly said that his learned opponent has entered into unnecessary and irrelevant issues. In his opinion it was a simple case of a legal omission on the part of the assessee. He remarked that since the facts have been admitted by A.R. he shall not remark upon the same. However, since admittedly separate declaration to opt for assessment under normal law was not filed the case could not have been assessed under normal law. Return of income is filed under section 55 but the assessee being covered under presumptive tax regime was required to file in unequivocal terms an irrevocable declaration of his intention to remain out of the presumptive tax regime. He referred judgments of the ITAT which says that simple return under section 55 is not enough for opting out of the presumptive tax regime. He remarked that he is aware of the judgments which are against him. However, since, law on the subject is very clear, the assessment on the basis of return without declaration was not to be made under normal law. The assessment was a mistake which has been rectified correctly and lawfully.

Moving ahead he argued that the assessee's claim of not being aware of the said provision is of no help. Ignorance of law has never been an excuse. In any case the notification was issued on 24-8-1991, while the return was filed on 31-8-1991. In this regard even the circular of C.B.R. referred by A.R. is of no help as it refers to those cases where returns had been filed up to 31-7-1991.

Regarding status of the Audit and Inspection Department he conceded that the same is not an authority under Income Tax Ordinance, 1979. However, the Assessing Officer is an authority and once he comes to know of a mistake apparent from record he has full jurisdiction to rectify the same. He agreed that mistake apparent from record does not include such propositions which can be understood through further discussion. However, in this case mistake is not only obvious but also admitted. The question of a debate, therefore, did not arise in his opinion.

On the argument that conscious mind was applied by the Assessing Officer while making assessment he remarked that had he done so the mistake of assessing the case under normal law would not have been made by him. He assessed a case under section 62 which was assessable under section 80C and thus made a mistake. Speaking against the argument that the present assessment which is continuation of the order under section 156(2) is under section 62, he commented that neither wrong mentioning of the section nor panel stepping into the shoes of the DCIT is legally wrong. These are settled matters hence cannot help the assessee in any manner. Further, since the assessee had failed to submit statement under section 143(b) the issuance of notice under section 61 and subsequent order under section 62 in consequence to the proceedings initiated under section 156 were well within the legal requirement.

We have also perused the record of the proceedings in detail. In the lengthy arguments of the two sides the issues which have cropped up are as follow:--

(1) Whether filing of return amounts to an irrevocable option under Clause (9) of Part-IV of the Second Schedule.

(2) Whether the assessment has been finalized under normal law can it be rectified under section 156 by holding that non-declaration by the assessee was a mistake apparent from record.

(3) Whether notification issued on 24-8-1991 printed at a later stage can apply on a return which was due after 31st of December, 1990 and was filed on 30th of August.

(4) Whether proceedings under section 156 can be initiated through issuance of notice under section 61 and order thereafter can be made under section 62 or 63 or not.

Before going further it will be more appropriate if the relevant provision with regard to filing of the declaration with return is reproduced:

(9) The provisions of section 80C insofar as they relate to payments on account of the supply of goods on which tax is deductible under subsection (4) of section 50 shall not apply in respect of any person, being a manufacturer of such goods, who opts out of the presumptive tax regime:

"Provided that a declaration of final and irrevocable option is furnished in writing along with the return of total income under section 55:"

Provided further that nothing contained in this clause shall apply to any manufacturer of goods for which special rates of deduction of tax are specified under clause (c) of subsection (4) of section 50.

At this stage we would like to mention that we are conscious of the judgments of ITAT on the issue. The A.R. has referred those which are in his favour but there are many which are against him on this very issue. The judgment which he referred says that filing of return in itself is enough for the presumption that the assessee is willing to be assessed under section 62 or 63 as the case may be. We have full respect for the judgments that consider filing of return as enough for fulfilling requirements of the above para. However, our view is against above finding. I am incidentally author to some judgments which say that a separate declaration is necessary for opting out of the presumptive tax regime. In this regard the Tribunal has relied upon the golden principle of interpretation of fiscal statutes that the law must be applied in its actual spirit. When the law provides for a specific separate procedure and says that an irrevocable declaration should be filed in addition to filing of return, it cannot be said that the provision has been added without some purpose and that the same is redundant.

We do not have to add that redundancy and superfluency cannot be attributed to the legislature.

Through the above provisions the legislature has directed the manufacturers to file an irrevocable declaration for opting out of the presumptive tax regime for the year under discussion, the same, therefore, is not to be ignored while making an assessment. Not only that the language speaks of filing an irrevocable option in writing, but it also says that the same shall be along with the return of total income under section 55. We, therefore, do not want to involve ourselves much into this issue. But however, will not resist in holding that before finalizing an assessment, Assessing Officer needs to check as to whether these requirements have been fulfilled as prescribed by law explained by us above. This issue, therefore, stands answered against the assessee. In fact the important aspect of the language of law that had added this additional requirement along with the return has been ignored while deciding the judgments and subsequently has continuously been ignored.

The second question however, needs a detailed' and elaborate discussion. Section 156 provides for a further bar to rectify a mistake apparent from record. The term `mistake apparent from record' has been discussed many times in various judgments some of which have been' mentioned by us while discussing the arguments of A.R. There is a consensus in judicial forums that the words as used in the above section include mistake of fact as well as of law. In this regard the principles which guide the Assessing Officer are that it applies on those errors only which are glaring, obvious, self evident and do not require a long drawn process of reasoning or examining arguments of points or where there may conceivably be two opinions. Furthermore, it should be clear and appear like something floating on the surface of the water, meaning thereby that to call it a mistake no discussion is required. These are all settled matters and neither party would disagree on the same. The fact that the assessee has not made a separate declaration is not denied. Whether, the same can be called as mistake apparent from record for this year would require further reversal towards the circumstances in which the assessee filed return and the relevant notification etc. on the subject.

This is where the issue No.3 mentioned by us also comes into discussion. The assessee has a special income year, his accounts have been closed on 30th of September, 1990, hence he was to file return on 31st of July, 1991. On this day there was no instruction from only authority for filing of an irrevocable declaration for assessment under normal law and opting out of the presumptive tax regime. Return was filed by assessee on 31st of August and the notification came on 24th of the same month which also statedly was not in the knowledge of the assessee as it was not published in official Gazette till the assessment was finalized. Later Assessing Officer finalized the case with full knowledge of the fact that the assessee had major part of its income on account of supply on which tax has been deducted or is deductible under the provisions of section 50(4). This notification was not an Act of Parliament, it was a proclamation and it could not have become law unless it was to be published in the Gazette. Since in all our laws we find support from the English Law, especially with regard to general clauses which deals among other things, the application on various provisions. We would like to say that in English law the rule is that Act of Parliament becomes law from the first movement of the day on which it receives the Royal Assent. Unlike the same the royal proclamation becomes law with its publication in the official Gazette. In fact such a proclamation is necessary to be enacted as a special Act of Parliament to enable such proclamation to become a law by the publication in the Gazette. A Royal Proclamation is the highest kind of law other than an Act of Parliament. As per British constitution its publication in London Gazette does not make it valid in Scotland, nor the publication in Edenberg makes it applicable in England. There is clear wisdom in this procedure. Obviously a notification issued on the behest of the Government, in this case by the Central Board of Revenue if is not published in the official Gazette, its knowledge to the public at large remains doubtful. The principle of law which has been propounded in history is that ignorance of law is no excuse in respect of patent and written laws dealing with the daily life of a person and they have a history, in some cases of thousands of years. Though there are no exceptions to said rule also but however these are special laws made to regularize a procedure for a person who has to file return on 31st of July and per chance for personal reasons has delayed it up till 31st of August. Notification issued on 24th August cannot be said to have created a legal bar on him. We have already held in earlier part of this order that in principle the declaration is necessary in respect of those years when the requirement is established after publication in the official Gazette as well as being part of the law. If the assessee omitted to not file the declaration for the reasons that the notification was not published in official Gazette, the Assessing Officer also had no knowledge of the same. The assessee's arguments that the issue of supply to Zahid Traders was very well in the knowledge of the Assessing Officer and that the assessment has been finalized knowingly cannot be straightway ignored. It may be true that Assessing Officer was also not aware of these instructions. However, it cannot be said that he was not aware of the C.B.R.'s circular that withdrew the requirement of a separate declaration for this assessment year. This obviously concludes that the matter remained under discussion and that the issue is debatable in any case. Doubts as we all know in such circumstances does not favour the Department. The law of natural justice requires announcement of a clear position of relevant law and rules for everyone for filing of return before one is supposed to file it. The Scheme of law with reference to Finance Act announced by the Government every year normally is that all the proposed amendments etc. take shape mostly by and before 30th of June. Taxpayers therefore, become aware of their legal obligations much earlier than filing of the return as it should be to provide him full time and justice. In the present case this instruction came on 24th of August and was published somewhere later. It cannot be held valid for the m returns filed earlier or even for return filed on 30th of August, 1991. In this regard the judgment referred by the learned A.R. from Indian origin reported as 155 ITR 568 has gone still ahead. Dealing with the issue of a smaller kind it said that even mere printing in the official Gazette and without making the same available for circulation and putting it on sale to public will not amount to "notification" within the meaning of Rule 8(1). We have already reproduced the relevant part in the excerpts from the said judgment earlier wherein in similar circumstances a writ petition was allowed in the favour of the petitioner saying that printing the notification in official Gazette without circulation to the public or placing it for sale is not enough to hold that the purpose of legislation stands legally conveyed and must should have been observed. In these circumstances calling this act of the assessee to be a mistake rectifiable under law will be being unrealistic. Under normal circumstances such an act should have been called a mistake apparent from record and even if it is to convert the entire proceedings into a different scenario, one may not hesitate in permitting the same. The particular fact of this case does not lead us to a conclusion like this. It shall not be naive to refer to the circular of C.B.R. which came later and through which a remedy has been provided. The circulars of C.B.R. that provide relief is called as remedial and in certain circumstances curative. The legal framework the instructions that provide remedy are retrospective and can be applied at any stage of the proceedings in a case. The language of the said circular is so clear that Department's objection with regard to filing of the return in this case on 31st August does not stop us saying that even if it is issued on 28th May, 1995; it would apply in full on the facts and circumstances of this case. We draw strength from the famous judgment of Supreme Court of Pakistan in the case of Messrs Shahnawaz Limited v. C.I.T. reported, as 1993 PTD 73 wherein the Honourable august Court has allowed the benefit of said circular to the assessee in an appeal which was pending before them. The circular of C.B.R. relevant to these proceedings speak as follows:---

"I am directed to invite your attention to the cases of manufacturers, who could not opt out of presumptive tax regime for assessment year 1991-92. These were the assessees having calendar year as their income year. They could not avail the facility granted through Clause (9) of 2nd Schedule, Part-IV, as it was notified on 24th August 1991, when they had already filed their returns, which were due by 31st July, 1991.

These being genuine cases of hardship, it has been decided that their returns of income so filed may be accepted as alternative of declarations required to be filed under the aforesaid clause (9), which could not have possibly been filed."

From the above discussion and dealing with the facts of this case our finding is that there is no mistake either on the part of the assessee or on the part of the Assessing Officer. The assessee was neither aware of any such additional requirement nor was ever made wiser by the I.T.O. during the course of proceedings. Since the requirement of filing declaration was along with filing of return, this requirement was not to be later fulfilled. In any case since the Assessing Officer also made the assessment consciously and after dealing upon all connecting issues he neither asked for statement under section 143-B nor made any calculation of tax as was the then required under Circular No.12 of 1991. The acceptance of return under section 55 is not a mistake. The remedial and curative circular of C.B.R. makes the matter clear even otherwise. This instruction was binding on all subordinate officers including DCIT and the subsequent panel. Section 8 of the Income Tax Ordinance, 1979 makes all instructions of C.B.R. to be as binding for all subordinate officers. Ref. (1984) 49 Tax 1 (Trib.).

The upshot of above discussion therefore is that for the impugned year 1991-92 in the case of those assessees whose accounts stood closed on or before 31st of December, 1990, filing of a separate declaration was not a requirement. Assessment framed later ignoring such a declaration is not mistake apparent from record and this way the Issues Nos. 2 and 3 framed by 'us stand answered in favour of the assessee.

This leaves us to the last issue with regard to issuance of notice under section 61 by the Panel. So far as the Panel stepping into the shoes of the Assessing Officer is concerned the assessment order does not indicate as to how the Panel came into picture and what was the area of its jurisdiction. Whether a set aside against an order under section 156 was also to be continued and processed by the said Panel is not visible from the order. The proceedings have continued without making reference to this important part regarding acquiring of the jurisdiction. The A.R. has not challenged the jurisdiction from this angle hence we come to the arguments in relation to the making of assessment under sections 62/132. The assessee seems to be correct in saying that in the presence of earlier assessment under section 62, which has neither been cancelled nor reopened, how could the Assessing Officer issue another notice under section 61. Notice under section 61 is served upon a person who has furnished a return of total income for producing evidence on which said person may rely in support of the return along with necessary documents and accounts. Assessment under section 62 is made after considering the evidence on record and or the other additional evidence provided by the assessee. All these formalities are in relation to normal assessment which in this case stood completed and was on record. The action which was to be continued was under section 156. Undoubtedly this section provides power to the Income Tax Authorities to amend any order passed by it to rectify any mistake apparent from record. Further such rectification may result in a major change in the order as it is to rectify the mistake of fact as well as of law. However, whether under the garb of rectification of mistake another assessment can be made is a doubtful proposition. Section 61 can be issued during the pendency of a return or where a notice under section 56 has been issued, but not where assessment has already been finalized or where an order is to be amended by rectifying a mistake on record. The proceeding initiated by the learned Panel speaks of a regular assessment in pursuance to filing of return which is not in line with the language of section 156. This is where reference to the golden principle of interpretation of not going beyond the intendments is of help. A plain reading of section 156 does not provide for any room for making an assessment upon a finalized assessment. In the presence of an earlier judgment subsequent assessment shall amount to duplication. The provisions of section 156(2) in fact deals with this situation. The opportunity of being heard to the assessee is to be provided under section 156(2). It can be in the shape of a letter s describing the nature of the mistake and indicating the rectifications which needs to be carried out. One may agree with learned D.R. that wrong mentioning of section does not vitiate an assessment, however, this is not a case of incorrect mentioning of section. The Panel consciously issued a notice under section 61 and later have made assessment under sections 162/132.

As already discussed in the scheme of law of Income Tax, assessee files a return under section 55 and on his default he is issued notice under section 56. This is where section 61 then comes into operation. The Assessing Officer acquires jurisdiction for issuance of notice under section 61 where:---

(a) a return of income has been filed by the assessee.

(b) or a notice under section 56 has been served upon him.

None of these two situations arise in this case. Rather it is a case of finalized assessment in which the Department wanted to carry out a mistake apparent from record. Rectification is a very limited term however, it is carried out without cancelling or re-opening an order. It does change the shape but the original order remains intact for all legal and practical purposes subject to the modification by way of rectification of a mistake. The situation can further be explained by reference to sections 65 and 66(A) of the Income Tax Ordinance, 1979 (now repealed) wherein original assessments may be re-opened or cancelled. These are the two situations where after cancellation or re-opening for "reassessment purposes notice under section 61 could be issued. Further had this set aside been against the main order which was under section 62 the Panel could proceed by issuance of a notice under section 61 but set aside being on appeal against order under section 156 should have proceeded under sections 156(2)/132.

Unfortunately another patent illegality has been committed. The cases where the assessment was to be made under presumptive tax regime were to be under section 80C and not under section 62.

Section 80C has come in supersession to the normal assessment provision of the Income Tax Ordinance, 1979. The payment that attracts the provisions of section 50(4) are to be taken as full and final settlement of accounts and supply is deemed to be income of said person. In this eventuality the assessee is not to file return of total income but a statement under section 143-B. It is true that if the assessee does not file such a statement there is no provision to call for the same. However, at least an effort could be done by issuance of a notice under section 156(2) indicating the error as already mentioned and calling for the statement under section 143-B. This aspect of the case has also totally been ignored hence to agree with learned D.R. that it was a case of wrong mentioning of section will be naive. This is a regular assessment in total disregard to the settled legal parameters which obviously should not have stood the test of appeal. This was a case of duplicate assessment which order should have been cancelled and not sent back for filling in the gaps earlier made by the assessing Panel. Law should always be applied in its natural meanings and in its literal sense. Intendments beyond the language of law by way of interpretation and reducing facilities by self generated meanings cannot be permitted by any Court. These are all settled principles of interpretation and would not need any reference. In any case one cannot ignore that there are so many doubts in respect of earlier proceedings that the mistake floating from the surface of order is not apparent. The facts of this case give us a very clear and unequivocal x picture that this is not a case of a mistake at all. Non-filing of declaration under the circumstances of this case was not a mistake. Further that this being a case of misapplication of facts as well as of law the proceedings initiated by the Panel are held to as totally illegal and are hereby annulled.

C.M.A./550/Tax(Trib.)Appeal accepted.