W.T.As. Nos. 217/LB to 219/LB of 2005, decided on 8th June, 2005. VS W.T.As. Nos. 217/LB to 219/LB of 2005, decided on 8th June, 2005., 2006 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 987 (2005)

(a) Wealth Tax Act (XV of 1963)---

----S.16(3)---Consolidated assessment order by taxation officer---Validity---Such assessment made by the taxation officer was illegal without jurisdiction, void ab initio, as wealth tax assessments could not be taken up or finalized by the taxation officer---Wealth tax assessment and income tax assessment were governed separately under Wealth Tax Act, 1963, the Income Tax Ordinance, 1979 or the Income Tax Ordinance, 2001 respectively---Wealth tax assessment could not be taken up or finalized by the taxation officer.

1997 PTD 821; 1999 PTD (Trib.) 4026; 2005 PTD (Trib.) 1370 and W.T.A. No.184/LB of 2004 ref.

(b) Wealth Tax Act (XV of 1963)---

----Ss.17A(1)(b) & 16(3)---Time limit for completion of assessment and re-assessment---Filing of revised return in response to notice---Completion of assessments after two years from the date of filing of returns---Validity---Assessing Officer in the consolidated assessment order had neither mentioned about any revised returns nor had mentioned regarding any notice sent to the assessee and a mechanical order had been passed by the Taxation Officer without considering the relevant provision and procedure provided under law---Assessing Officer in the assessment order should have mentioned the date of filing the revised returns and other relevant facts which he had not done---When returns were filed by the assessee, the assessment could only be made within two years from the date of furnishing the return and if the assessment had not been finalized within the time limit, further proceeding would be a nullity in the eyes of law---Assessing Officer failed to make assessment within two years---Returns having been filed within time, there was no justification for making the demand after limitation period provided under the law, even if the assessee in response to notice had filed the revised returns---Taxation Officer has passed the assessment order without jurisdiction and the consolidated order passed for all the three years was barred by limitation provided under the law and was annulled by the Appellate Tribunal---Original returns filed by the assessee were directed to be accepted---Order of First Appellate Authority was vacated and consolidated assessment order passed by the Taxation Officer under S.16(3) of the Wealth Tax Act, 1963 for all the three years was annulled.

2004 PTD (Trib.) 388; 1997 PTD 821; 1999 PTD (Trib.) 4026; 2005 PTD (Trib.) 1370; W.T.A. No.184/LB of 2004 and 2002 CLC 209 rel.

Younis Khalid for Appellant.

Anwar Ali Shah, D.R. for Respondent.

Date of hearing: 8th June, 2005.

ORDER

The appellant through these three appeals has objected to the consolidated impugned order of the learned C.W.T.(A) dated 7-6-2004 upholding the consolidated assessment orders passed by Taxation Officer under section 16(3) of the revoked Wealth Tax Act, 1963 for the assessment years 1998-99 to 2000-2001.

2. Mr. Younas Khalid, Advocate has appeared on behalf of the appellant and has contended that consolidated assessment orders for all the three years passed by the Taxation Officer under section 16(3) on 3-6-2003 is illegal, without lawful authority, without jurisdiction, without limitation, void ab initio liable to be annulled. The learned C.I.T.(A), according to him has without any justification upheld the order. He has contended that learned C.I.T.(A) without any basis has erroneously and illegally held that assessment was based on revised return filed on 10-4-2003 without considering the fact that assessee in this case has already filed returns for the assessment year 1998-99 on 30-9-1998, for the assessment year 1999-2000 on 30-9-2004 and for the assessment year 2000-2001 on 7-11-2000 and the assessments in this case should have to be made for the assessment year 1998-99 on or before 29-9-2001 and for the assessment year 2000-2001 on or before 6-11-2002 as per time limitation for completion of assessments and re-assessments provided in the revoked Wealth Tax Act, 1963. According to learned counsel under clause (b) of subsection (1) of section 17(a), four years period from the end of assessment year has been provided in which the net wealth was first assessable but for the cases where the return or a revised return under section 15 has been filed, the limitation for completion of assessment has been provided as two years from the date of furnishing of a return. According to learned counsel, this Tribunal in many cases has already held that time limit for assessment in such cases will be two years. He has in this respect placed reliance on decision of this Tribunal reported as 2004 PTD (Trib.) 388. Learned Counsel has contended that even otherwise if the assessments are covered separately under two different laws and the wealth tax assessment cannot be taken up or finalized by the Taxation Officer and according to him the assessment made by the Taxation Officer is illegal, out of jurisdiction, void ab initio and liable to be annulled. He has in this respect placed reliance on the decision of the Honourable High Court reported as 1997 PTD 821, 1999 PTD (Trib.) 4026, 2005 PTD (Trib.) 1370 and the order of this Tribunal dated 18-9-2004 in W.T.A. No.184/LB of 2004 (assessment year 1998-99). On the facts of the case, learned counsel has contended that Assessing Officer was not justified to adopt the ALV for the purpose of valuation inclusive of declared in Tax Amnesty Scheme under section 59D, as the assets declared in Tax Amnesty Scheme were exempt from wealth tax. He has contended that learned C.W.T.(A) has without any justification upheld the treatment meted out by the Taxation Officer which may please be vacated.

3. On the other hand, Mr. Anwar Ali Shah, representing the Department is supporting the impugned orders of the officers below. He has contended that under section 17A(1)(b) of the revoked Wealth Tax Act, 1963, the assessments were to be made within two years from the date of filing of returns. In this case the assessments were made for all the three years on 30-6-1993 on the basis of revised returns for the years filed on 10-4-2003 as per covering letter dated 26-4-2003 submitted by the learned representative of the assessee which are not illegal in view of the provision of section 17A wherein limitation for completion of assessment or reassessment has been given as two years from filing the return or revised return. Regarding the assessment made by the Taxation Officer, learned D.R. has contended that powers of both the wealth tax and income tax authorities have been vested to same person who is simultaneously Taxation Officer under Income Tax Ordinance, 2001 or D.C.W.T. under Wealth Tax Act, 1963. Regarding the claim of exemption in accordance with provision of T.A.S., learned D.R. has contended that action of the Assessing Officer is in order as the assets had not been declared by the appellant under Tax Amnesty Scheme and the learned C.W.T.(A) has, therefore, rightly upheld the assessments for the three years under view.

4. We have heard the learned representatives of both the sides and have also perused the consolidated impugned order of the learned C.W.T.(A) and the assessment order.

5. After considering the cases referred by the learned Counsel for the assessee, we are of the view that in this case the assessment, as made by the Taxation Officer is illegal, out of jurisdiction, void ab initio, as wealth tax assessments cannot be taken up or finalized by the Taxation Officer. Wealth tax assessment and income tax assessment are governed A separately under revoked Wealth Tax Act, 1963, the repealed Income Tax Ordinance, 1979 or the Income Tax Ordinance, 2001 respectively. Wealth tax assessment cannot be taken up or finalized by the Taxation Officer and this has already been held by this Tribunal in the cases as has been referred above.

6. On the issue of limitation, we find force in the argument as has been made by the learned representative of the assessee that the Assessing Officer in the consolidated assessment order dated 3-6-2003 has neither mentioned regarding any revised returns nor has mentioned regarding any notice sent to the assessee and a mechanical order has been passed by the Taxation Officer without considering the relevant provision and procedure provided under law. It has been held by the Honourable superior Courts that heavy responsibility lay on the judicial officer while passing judicial order. But in the present case, the Assessing Officer neither felt it necessary to invoke or consider any provision of law nor did he confront the assessee regarding the relevant issue. The Assessing Officer in the assessment order should have mentioned the date of filing the revised returns and other relevant facts which he has not mentioned. We find force in the contention as made by the learned Counsel for the assessee that when the returns are filed by C the assessee, the assessment can only be made within two years from the date of furnishing the return and if the assessment has not been finalized within the time limit, further proceeding will be a nullity in the eyes of law. In this case, on behalf of the assessee, it has been established through documentary evidence that returns were filed on 30-9-1998 for the assessment year 1998-99 on 30-7-1999 for assessment year 1999-2000 and on 7-11-2000 for assessment year 2000-2001. But the Assessing Officer has issued the notice on 14-1-2003 for all the three years under review asking the appellant to appear before him as according to Taxation Officer "there are certain points in connection with the return submitted by you under section 14 for the year 1998-99 to 2000-2001 regarding which I would like to have some further information. I shall, therefore, be obliged if you would please attend my office on 25-1-2003 either in person or by a representative duly authorized in writing in this behalf or produce or cause to be produced on the said date and at the said time any documents, accounts and other evidence on which your return has been based". While the assessment order has been passed on 3-6-2003 for all the three years under review. We are of the view that as the Assessing Officer in this case failed to make assessment within two years as the returns were filed within time, there was no justification for making the demand after limitation period provided under the law, even if the assessee in response to notice has filed the revised returns. In this regard, we would like to refer the decision of the Honourable Quetta High Court reported as 2002 CLC 209 wherein it has been held that even if the party shows to withdraw the appeal on the ground not legally available, the Courts had powers to mould the relief and grant same in the interest of justice even if not asked by the appellant as the act of Court should be in accordance with law and due to the illegal act of the Court, no man should be prejudice.

We, therefore, without going into facts of the case, are of the view that in this case the Taxation Officer has passed the assessment order without jurisdiction and ,the consolidated order passed for all the three years by the Assessing Officer is barred by time limitation provided under law and is, therefore, annulled. The original returns in this case filed by the assessee are directed to be accepted. The consolidated impugned order of the learned C.I.T.(A) is vacated and the consolidated assessment order passed by the Taxation Officer under section 16(3) for all the three years under review is annulled.

All the three appeals filled by the assessee are allowed.

C.M.A./485/Tax(Trib.)???????????????????????????????????????????????????????????? Appeals allowed.