I.T.A. No.1440/LB of 2006, decided on 31st August, 2006. VS I.T.A. No.1440/LB of 2006, decided on 31st August, 2006., 2007 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 827 (2006)

Income Tax Ordinance (XLIX of 2001)---

----Second Sched., Part IV, Cl. (41)---Exemption---Rejection of declaration of option for the presumptive/final tax regime was upheld by the First Appellate Authority---Validity---Held, there was no order by the Commissioner of the Taxation Officer as such no appeal could be filed and the treatment meted out by the First Appellate Authority upholding the observations of the Commissioner in a letter was ab initio, illegal and void---Right of appeal had been specifically provided under the provisions of law, as mentioned in Part-III of the Income Tax Ordinance, 2001 from S.127 to onwards and only the orders as mentioned under the provisions of law could be agitated in the course of appeal and any other order passed will he without jurisdiction---Assessee may move in this regard before higher authorities including Central Board of Revenue---No order under the Income Tax Ordinance, 2001 being in the field appealable under the law, the order of First Appellate Authority had been passed without having jurisdiction and the same was vacated by the Appellate Tribunal and assessee was directed to make representation before the higher forums.

Asim Zulfiqar Ali, A.C.A. for Appellant.

Sabiha Mujahid, D.R. for Respondent.

ORDER

Through this appeal, the appellant has objected to the impugned order of the learned C.I.T.(A) dated 26-4-2006 for tax year 2006 on the following grounds:---

(1) That the order dated April 26, 2006 passed by the learned Commissioner of Income Tax (Appeals), Lahore (C.I.T.(A)), under section 129 of the Income Tax Ordinance, 2001 is bad in law and against the facts of the case.

(2) That the C.I.T.(A) erred in upholding the order rejecting the declaration of option filed by the appellant under clause (41) of Part-IV of the Second Schedule to the Income Tax Ordinance, 2001, opting for the presumptive/final tax regime.

We have heard the learned representatives from both the sides and have also perused the impugned order of the learned C.I.T.(A), the letter of Commissioner of. Income Tax dated 25-2-2006 rejecting the declaration submitted by the taxpayer/assessee under clause (41) of Part-IV of Second Schedule to the Income Tax Ordinance, 2001.

After going through these impugned orders and the letter of the Commissioner, we are of the view that letter is not appealable, as under section 127 "Any person dissatisfied with any order passed by the Commissioner of Income Taxation Officer under sections 121, 122, 143, 144, 162, 170, 182 to 189, or an order under subsection (1) of section 161 holding a person to be personally liable to pay an amount of tax or an order under clause (1) of subsection (3) of section 172 declaring a person to be representative of a non-resident person, or an order under section 221 refusing to rectify the mistake, either in full or in part, as claimed by the taxpayer, or an order having the effect of enhancing the assessment of reducing a refund or otherwise increasing the liability of the person, may prefer an appeal to the Commissioner (Appeals) against the order."

But in this case, we have noted that there was no order by the Commissioner or the Taxation Officer and as there was no order, no appeal can be filed and the treatment meted out by the learned C.I.T.(A) upholding the observations of the Commissioner in a letter is ab initio, illegal and void. The learned counsel for the appellant has contended that rejection of declaration submitted by the appellant by the Commissioner of Income Tax will having the effect of enhancing assessment or reducing refund or otherwise increasing the liability of the assessee/appellant and therefore, this treatment of the Taxation Officer is in fact an order which will affect the assessee against which appellant has rightly filed appeal. According to the learned counsel, under subsection (7) of section 153 of the Income Tax Ordinance, 2001, the tax deducted under this section shall be a final tax on the income of a non-resident person arising from a contract specified in subsection (3)". And under clause (41) of Part-IV of Second Schedule to the Income Tax Ordinance, 2001 it has been provided that:---

"The provisions of subsection (7) of section 153 shall not apply in respect of a non-resident person unless he opts for the presumptive tax regime:

Provided that a declaration of option is furnished in writing within three months of the commencement of the tax year and such declaration shall be irrevocable and shall remain in force for three years".

He has contended that after filing the option in accordance with the above referred provisions of law, the statement filed under section 165 will be deemed to be an assessment order regarding that income and tax collected or deducted will be a final tax. According to the learned counsel, as there is no provision of law authorizing the Commissioner of Income Tax rejecting the declaration submitted by the taxpayer under clause (41) of Part-IV of the Second Schedule to the Income Tax Ordinance, 2001, the orders passed by both the Officers are not justified. He has argued that the Tribunal in case of the acts of the officer being not in accordance with law has authority to make directions to act in accordance with law.

We are of the view that this version of the appellant cannot be accepted, as it will open a Pandora Box of filing the appeals against any letter of the Commissioner of Income Tax or Taxation Officer. Right of the appeal has been specifically provided under the provisions of law, as mentioned in Part-III of the Income Tax Ordinance, 2001 from section 127 to onwards and only the orders as mentioned under the provisions of law can be agitated in the course of appeal and any other order passed will be without jurisdiction. We are of the view that the assessee may move in this regard, if advised so, before higher authorities including C.B.R. As no order under the Income Tax Ordinance, 2001 is in the field appealable under the law the impugned order of the learned C.I.T.(A) has been passed without having jurisdiction in this regard and is, therefore, vacated and the assessee, if so advised, is directed to make representation before the higher forums.

The appeal filed by the assessee is dismissed.

C.M.A./230/Tax(Trib.)Appeal dismissed.