I.T.A. No. 994/LB of 2004, decided on 22nd July, 2006. VS I.T.A. No. 994/LB of 2004, decided on 22nd July, 2006.
2007 P T D (Trib.) 886
[Income-tax Appellate Tribunal Pakistan]
Before Syed Nadeem Saqlain, Judicial Member and Raja Sikandar Khan, Accountant Member
I.T.A. No. 994/LB of 2004, decided on 22/07/2006.
Income Tax Ordinance (XXXI of 1979)---
----Ss. 52, 86 & 50(4)---Liability of persons failing to deduct or pay tax---Assessee, a limited company maintaining full books of accounts---All details along with books of accounts were produced---Assessing Officer proceeded to frame assessment under Ss.52 and 86 of the Income Tax Ordinance, 1979 without pointing out any defect in books of accounts or without identifying the instances of non-deduction of tax on purchases made by the assessee---First Appellate Authority set aside the assessment with the observation that a tax was charged in a summary manner on all the payments under the head stores and spares and repair and Assessing Officer did not examine the record honestly as it was not possible that all the payments under the head stores and spares could attract the provisions of S.50(4) of the Income Tax Ordinance, 1979---Validity---Assessee produced full books of account which stood admitted in the assessment order---Assessing Officer failed to identify even a single payment which could be consideration falling within the purview of S.50(4) of the Income Tax Ordinance, 1979 where tax should have been deducted at source---Assessment was set aside with observations that Assessing Officer did not examine the record honestly and all the payments under the head stores and spares would attract the provisions of S.50(4) of the Income Tax Ordinance, 1979---Case should not be remanded in routine because that amounted to allowing of premium to the Assessing Officer to make up his deficiencies---When books of accounts were available with the Assessing Officer, he did not bother to identify the payments where S.50(4) of the Income Tax Ordinance, 1979 was attracted---Assessee should not be allowed to suffer the hassle of re-assessment just for the reason that the departmental officials did not perform their duties with due 4iligence and framed assessment without application of mind---Order of First Appellate Authority was vacated and assessment made under Ss.52 and 86 of the Income Tax Ordinance, 1979 was cancelled by Appellate Tribunal.
Mumtaz ul Hassan for Appellant.
Rana Muhammad Luqman, D.R. for Respondent.
ORDER
The titled appeal relating to the assessment year 1999-2000 has been preferred at the instance of the assessee calling in question the impugned order, dated 5-1-2004 passed by the learned CIT(A) Zone-1, Lahore. The sole ground which has been agitated at the bar is that the learned first appellate authority was not justified to set aside the case under sections 52/86. It was entreated by the learned A.R. that assessment framed by the Assessing Officer ought to have been cancelled rather than affording another opportunity to the assessee by remanding it to the Assessing Officer.
2. The facts in brief are that the assessee is a private limited company. The assessee was served a show-cause notice under section 52 requiring the assessee to explain his position regarding non-deduction of tax regarding purchases made by the assessee. The Assessing Officer was not satisfied with regard to reply submitted by the appellant. Therefore, the Assessing Officer treating the assessee as "assessee in default" proceeded to frame assessment under sections 52/86 of the repealed Income Tax Ordinance, 1979. Feeling aggrieved with the treatment accorded to by the Assessing Officer, the assessee preferred appeal before the learned first appellate authority who set aside the case with the direction that record be examined to determine the payment attracting the provisions of section 54 and then assessment be made accordingly. The assessee is in further appeal impugning the same.
3. Both the parties have been heard. The learned A.R. has vehemently argued the case and contended that the assessee is a private limited company maintaining full books of accounts. It was submitted by the learned A. R. that all the details along with books of account were produced before the Assessing Officer but he proceeded to frame assessment under sections 52/86 without pointing out any defect in the said books of account or without identifying the instances of non-deduction of tax in the case of purchases made by the assessee. The learned A.R. further argued that even the learned first appellate authority fell in error while remanding the case to the Assessing Officer. In this regard he drew the attention of the Bench to the observations made by the learned CIT(A) in his judgment which are as under:--
"It has been stated that the Assessing Officer arbitrarily charged tax under section 52 on payments which otherwise did not attract the provisions of section 50(4) of the repealed Income Tax Ordinance, 1979. It has been staled that complete record was presented which clearly showed that the payments consisted of small amounts. The appellant argued that he Assessing Officer instead of identifying the payments attracting the provisions of section 50(4) charged tax under section 52 on all the minor cash payments under the head stores and spares.
Submissions made by the appellant have been considered. The Assessing Officer in a summary manner charged tax under section 52 of the repealed Income Tax Ordinance, 1979 on all the payments under the head stores and spares and repair. I am convinced that the Assessing Officer did not examine the record honestly. It is not possible that all the payments under the head stores and spares would attract the provisions of section 50(4) of the repealed Ordinance. The case is set aside with the directions that record be examined."
4. It was pointed out by the learned A.R. that the learned CIT(A) categorically observed that "Assessing Officer did not examine the record honestly. It is not possible that all the payments under the head stores and spares would attract the provisions of section 50(4) of the repealed Ordinance". The learned A.R. contended that in the light of above observations made by the learned CIT(A) and in view of the fact that the Assessing Officer also admitted in the assessment order that "written reply submitted with complete books of accounts", hence there were no cogent reasons available with the appellate authority to remand the case to the Assessing Officer. It was also stated by the learned A.R. that assessee's plea that purchases regarding store and spare consumed consisted of amount less than Rs.25,000. The learned D.R. has supported the assessment order passed by the Assessing Officer as well as impugned order passed by the learned CIT(A).
5. After hearing the rival contentions expressed by both the parties, we feel ourselves persuaded by the arguments addressed by the learned A.R. There is no denying the fact that the assessee produced full books of account before the Assessing Officer which stands admitted by the Assessing Officer in his assessment order. It is also worth-noting that the Assessing Officer failed to identify even a single payment which could be considered falling within the purview of section 50(4) where tax should have been deducted at source. It is also important to mention that the learned first appellate authority was fully convinced that the Assessing Officer did not examine the record honestly. It was not possible that all the payments under the head stores and spares would attract the provisions of section 50(4) of the repealed Ordinance yet, he set aside the case of re-examination. It has been time and again held by the Tribunal as well as the superior Courts that case should not be remanded in routine because that amounts to allowing of premium to the Assessing Officer to make up his deficiencies. Even in the instant case when books of accounts were available with the Assessing Officer, he did not bother to identify the payments where section 50(4) of the repealed Income Tax Ordinance, 1979 was attracted. We are also constrained to observe that the appellant/assessee should not be allowed to suffer the hassle of re-assessment just for the reason that the departmental official did not perform their duties with due diligence and framed assessment without application of mind.
6. Keeping all these facts in view, the order of the learned CIT(A) is vacated and assessment made under sections 52/86 is hereby cancelled.
C.M.A./214/Tax (Trib.)Appeal allowed.