I.T.As. Nos. 2675/LB and 4360/LB of 2005, decided on 19th September, 2006. VS I.T.As. Nos. 2675/LB and 4360/LB of 2005, decided on 19th September, 2006., 2007 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 493 (2006)

(a) Income Tax Ordinance (XLIX of 2001)---

----Ss. 239(3) & 205---Savings---Word "or any other amount"---Additional tax---First Appellate Authority found that words "or any other amount" appearing in subsection (3) of S.239 of the Income Tax Ordinance, 2001 covered the charge of additional tax under said provision---Validity---Words "ally other amount" were not meant to describe "additional tax" in the presence of word "additional tax".

(b) Income Tax Ordinance (XLIX of 2001)---

----S.239(3)---Savings---Assessment year 2001-2002---Application of amended subsection (3) of S.239 of the Income Tax Ordinance, 2001 to the proceedings for assessment year 2001-2002---Validity---Pre-amended provisions of subsection (3) of S.239 of the Income Tax Ordinance, 2001 would hold the field till 30-6-2002, i.e. prior to substituting the same w.e.f. 1-7-2002---for assessment year 2001-2002, the pre-amended provisions of subsection were to be invoked, accordingly under original subsection (3), the proceedings were to be finalized under relevant provisions of the Income Tax Ordinance, 1979---Amended subsection (3) of S.239 was not applicable in the proceedings for the assessment year 2001-2002.

(c) Income Tax Ordinance (XLIX of 2001)---

----S.205---Income Tax Ordinance (XXXI of 1979), S.88---Additional tax---Mentioning "an order under S.205(88)"---Legal shape of---By writing as S.205 of Ordinance, 2001 and S.88 of Ordinance, 1979 it could commonly be understood in the legal parlance that it meant subsection (88) of main S.205 whereas Assessing Officer had meant as 205/88---Assessing Officer had left it to others to read what was in his mind---Such a sketchy way of mentioning the sections and drafting order could not be approved by any stretch of imagination---Assessee had the right to know precisely under which specific provisions of law he had been made liable to pay tax---Appellate Tribunal disapproved that it could be taken as an order whether administrative or judicial---Assessing Officer had offered negative contribution, conspicuously and other officers should avoid same.

(d) Income Tax Ordinance (XLIX of 2001)---

----S.205---Income Tax Ordinance (XXXI of 1979), S.88-Additional tax---Mentioning of section firstly from the un-repealed Ordinance and then from the repealed Ordinance---Legality of proceedings---By writing as "205(88)" it could possibly be presumed as such that was S.205 of the Income Tax Ordinance, 2001 by "88" it meant the corresponding section of the Income Tax Ordinance,, 1979---Such proceedings, simultaneously under the two enactments of law, one was alive and other was dead, legally not permissible, which had made the order as unlawful---Mentioning of sections in such manner had an ultimate effect on the proceedings which had become legally without any coverage or any legal sanction behind it.

(e) Income Tax Ordinance (XLIX of 2001)---

----S.205---Income Tax Ordinance (XXXI of 1979), S.88---Additional tax---Order under "S.205(88)" was passed at the end of' the assessment order under S.62 of the Income Tax Ordinance, 1979---Validity---Order appearing in such a way was not at all sustainable in the eye of law for the reasons that nothing had been expressed as to the assumption of the jurisdiction for an order under "S.205(88)" by the Assessing Officer, as for assessing the income order had been passed under S.62 of the Income Tax Ordinance, 1979 clearly depicting that jurisdiction was assumed for passing an order under S.62 of the Income Tax Ordinance, 1979, thus without expressing as to how jurisdiction had been assumed for an order under "S.205(88)" which had been made part of the earlier one---Not assuming the jurisdiction had made the entire proceedings as illegal and void ab initio, and thus merited to be cancelled/annulled---Proper course was that firstly to conclude the order under S.62 of the Income Tax Ordinance, 1979 by putting the signatures with affixing official seal/stamp, only then second order could have commenced after proper assumption of jurisdiction by the Assessing Officer---Proceedings in such an ignorant way by the Assessing Officer was unparalleled where only a top administration in the tax structure could take a notice so as to put a stop to this illegal manner.

(f) Income Tax Ordinance (XLIX of 2001)---

----S.205---Income Tax Ordinance (XXXI of 1979), S.88---Additional tax---Order captioned as "under S.205(88)"---Validity---Order captioned as "under S.205(88)" could not be taken as an order at all either an administrative or a judicial---Was mandatory that while imposing additional tax complete basis/working i.e. the days and the rate at which tax had been imposed, were to be given so as ultimately the amount which the assessee had been made liable to pay was made clear---No basis had been given which had made the entire exercise as illegal, void ab initio---Order passed under "S.205(88)" was void ab initio and was annulled accordingly by the Appellate Tribunal.

Mirza Anwar Baig for Appellant.

S. Ashraf Ahmad Ali, D.R. for Respondent.

ORDER

It is the order dated 11-4-2005 which has been assailed in assessment year 2001-02.

2. The facts in brief giving rise to filing of these appeals are that undisputedly return was filed on 18-10-2001 and when this return was not found available on record that notice was issued for filing of income tax return. Inn reply copy of return and statement under section 143-B was filed on 18-3-2004. For not depositing the tax due on filing the income tax return that by "an order under section 205(88)" without mentioning as to whether section(s) of the repealed Ordinance or of the new Ordinance that additional tax was levied, by not specifying neither amount nor the basis of calculation in this order. This order under section 205(88) has been passed at the end on finalizing the income assessment proceedings under section 62 of the Income Tax Ordinance, 1979 but the impugned order under section 205(88) is appearing prior to concluding it by putting the official signature and seal stamp. Thus at the end one after the other order that only once the signatures with official seal could find a place i.e. at one occasion. The learned First Appellate Authority turned down the pleadings that the assumption of jurisdiction under section 205(88) by the Assessing Officer is illegal and also against the settled proposition of law being not applicable for the impugned year. The following findings were recorded:---

"The issue raised by the A.R. has been considered in the light of provisions of section 239. The learned A.R. has referred to subsection (2) of section 239 of the Income Tax Ordinance, 2001 but has conveniently ignored the provisions of section 3 of the same section which has provided that

[(3) The provisions of subsections (1) and (2) shall apply, in like manner, to the imposition or charge of any penalty, additional tax or any other amount, under repealed Ordinance, as these apply to the assessment, so however that procedure for such imposition or charge shall be in accordance with the corresponding provision of this Ordinance.]

As is clear from the above provision through this subsection imposition or charge of any penalty, additional tax or any other amount under the Income Tax Ordinance, 1979 has been saved, thus, any proceedings which come under "any other amount" in my considered opinion is covered under this provision, therefore, the plea of the appellant in this regard is not based on correct appreciation of facts and law both."

Subsequently, on facts also the assessee failed before the learned First Appellate Authority, for firstly neither any explanation was offered even on confronting to the appellant/assessee by the Assessing Officer, nor deposit challans were produced for rebuttal of the action of the Assessing Officer. The case law as quoted was found as not applicable. Before us by submitting the following sole ground that the matter has been agitated:---

"that the C.I.T. Appeals has erred in law in confirming the action of the taxation officer in levying additional tax. Thus, the action of the C.I.T. Appeals on this score is illegal and arbitrary."

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3. The learned A.R. has firstly submitted that new Ordinance 2001 is not applicable for the impugned assessment year. The learned A.R. has further contended that additional tax could be imposed where there is deliberate/wilful default of an assessee. Whereas in the case of the appellant/assessee explanation was duly given but the Assessing Officer without considering it has imposed the penalty. The learned D.R. has supported the order passed at the first appeal stage but has failed to submit any explanation or any rationale behind firstly mentioning the section as 62 of the repealed Income Tax Ordinance, 1979 for assessing the income then without concluding the same that captioned has appeared as "order under section 205(88)", under it the following lines appeared:---

"It was confronted to the attending A.R. that additional tax is leviable for non-deposit of tax with the return. No explanation is offered. Additional tax under section 205(88) is levied as per law."

4. The learned D.R. has further submitted that for imposing the additional tax and penalty it is the new Ordinance which becomes applicable. The learned D.R. when was asked to substantiate the stance with some order passed by the appellate forum or any clarification on which has failed to quote a single one, nor could give any basis for this reasoning.

5. We have heard both the parties and have also perused the available record. The learned First Appellate Authority in the impugned order at page 3 at the top has referred to section 239(3) by also reproducing it, which has also been reproduced ibid in this order also. A Thereafter the learned First Appellate Authority has held that words "or any other amount" appearing in subsection (3) of section 239 covered. the charge of additional tax under this provision in the instant case The learned First Appellate Authority has not commented over the words appearing as "penalty", "additional tax" here in this subsection and secondly why specific words "additional tax" are not covering this imposition. The learned First Appellate Authority has also held that imposition of charge or any penalty, additional tax or any other amount under the repealed Ordinance have been saved by this subsection. For recording the findings the learned First Appellate Authority has not placed reliance on any other order or judgment and importantly has not dilated in a comprehensive manner by ignoring to mention the basis for reaching on such conclusion. Here we are inclined to hold that words "any other amount" are not meant to describe "Additional Tax" in the presence of word "Additional Tax". As where there are specific "words" then finding recourse in omnibus head is not required. The amended subsection (3) as has been reproduced ibid in C.I.T.(A)'s findings is as a result of insertion by Finance Ordinance, 2002, thereby making it part of Income Tax Ordinance, 2001, which became effective from 1-7-2002. The substituted subsection (3) read as follows:---

"Where any return of income has been furnished by a person for any assessment year ending on or before the 30th day of June, 2003, proceedings for the assessment of the person for that year shall be taken and continued as it this Ordinance has not come into force."

The bare reading of both amended (by insertion) as well as substituted subsection makes it clear that these are quite distinct from each other. Now the questions where we are required to dilate are:---

--???????? Firstly as to whether the amended subsection will be applicable to the proceedings for assessment year 2001-02 or not?

---??????? Secondly, as to whether with such manner/language and style a legal shape would be given to an order passed by mentioning the section as 205(88) or not?

---??????? Thirdly, as to whether the mentioning of section firstly from the alive Ordinance and then from the repealed Ordinance has any bearing on the proceedings or not?

---??????? Fourthly, the order under section 205(88) appearing at the end of the assessment order under section 62 is sustainable in the eye of law in the given circumstances or not?

---??????? Lastly, as to whether the lines captioned as "order under section 205(88)" is an order as prescribed under the law or not, where nothing has been specified as to the amount and importantly the working out of additional tax'?

6. The present Income Tax Ordinance, 2001 has transparent anomalies which have been further worsened by the inept attitude of the department. The questions one by one being taken up as under:---

-- To dilate the first one it will be essential to bring on record that the pre-amended provisions of subsection (3) will hold the field till 30-6-2002 i.e. prior to substituting the same w.e.f. 1-7-2002. For the impugned assessment year 2001-02, the pre-amended provisions of subsection were to be invoked, accordingly under original subsection (3), the impugned proceedings were to be finalized under the relevant provisions of the repealed Ordinance. As even a cursory look at the original/pre-amended will make it crystal clear. Thus the proceedings were required to be completed under old Ordinance, 1979. So we do not have any reluctance in holding that amended subsection is not applicable in the proceedings before us. The findings of the learned First Appellate Authority in this respect are quite unfounded because it is the provisions of law which remained in field in the relevant assessment year which will regulate the impugned issue before us.

--- Second question as has been described earlier in the paras (on record) after the order for income to be assessed under the provisions of section 62 of the late Ordinance that fresh para was started with the captioned as "order under section 205(88)". The contents of the same have already been reproduced at para. 3 of this order. A plain reading of 2 and 1/2 lines order with no substance in it that additional tax has been imposed showing scant knowledge even for writing the sections. By writing as 205(88) it could commonly under in the legal parlance meant subsection (88) of main section 205 whereas Assessing Officer has meant as 205/88. In other words he has left it to others to read what is in his mind such a sketchy way of mentioning the sections and drafting order cannot be approved in any stretch of' imagination. We have on various occasions held that it is the right of any assessee to know precisely under which specific provisions of law he has been made liable to pay the tax. So we do not approve that it could be taken as an order whether administrative or judicial. It is the Assessing Officer's negative contribution, conspicuously, that what other officers shall avoid it.

--- Third, by writing as 205(88) it could possibly be presumed as such that is the section 205 of the present Ordinance by 88 it meant the corresponding section of the repealed Ordinance. Such proceedings which are simultaneously under the two enactments of law, one is alive and other is dead, legally not permissible,

Which has made simply order as unlawful. So to meet its fate with the cancellation and annulling it. Mentioning of sections in this manner has an ultimate fact on the proceedings which have become legally without any coverage or any legal sanction behind it.

---Fourthly, the way the impugned order is appearing is not at all sustainable in the eye of law for the reasons that nothing has been expressed as to the assumption of the jurisdiction for an order under sections 205/88 by the Assessing Officer, as for assessing the income order has been passed under section 62 clearly depicting that jurisdiction was assumed for passing an order under section 62 of the repealed Income Tax Ordinance, 1979, thus/without expressing as to how jurisdiction has been assumed for an order under section 205(88) which has been made part of the earlier one. Not assuming the jurisdiction has made the entire proceedings as illegal void ab initio, thus merited to be cancelled/annulled. Even otherwise proper course was that firstly to conclude the order under section 62 by putting the signatures with affixing official seal/stamp, only then second order could have commenced after proper assumption of jurisdiction by the Assessing Officer. Proceedings in such an ignorant way by the Assessing Officer is unparalleled where only a top administration in the tax structure could take a notice so as to put a stop to this illegal manner.

---Lastly, the order captioned as "under section 205(88)" cannot be taken as an order at all either an administrative or a judicial. It is mandatory that while imposing additional tax complete basis/working i.e. the days and the rate at which tax has been imposed are to be given so as ultimately the amount which the assessee has been made liable to pay. Here no such basis has been given which has made the entire exercise as illegal and void ab initio.

7. Keeping in view the discussion supra we are persuaded to finally declare as the order passed under section 205(88) as void ab nitio accordingly, annulled.

8. For the assessment year 2002-03, where facts/circumstances the findings as recorded supra for assessment year 2001-02 in I.T.A. No.2675/LB of 2005 shall be applicable here.

9. Both the assessee's appeals succeed as above.

C.M.A./175/Tax(Trib.)???????????????????????????????????????????????????????????? Appeals accepted.