COMMISSIONER OF INCOME TAX/WEALTH TAX VS AAMIR NASEEM, 2007 PTD-LAHORE-HIGH-COURT-LAHORE 137 (2006)

Wealth Tax Act (XV of 1963)---

----Ss. 15 & 17-A(1)(b)---C.B.R. Circular No.2---Filing of return or revised return under S.15 of Wealth Tax Act, 1963---Wealth assessment, setting aside of---Limitation---Word "or" as used in S.17-A(1)(b) of Wealth Tax Act, 1963 separated its first part providing limitation of "four years from the end of assessment year in which the net wealth was first assessable" from its second part providing a period of "two years from the date of furnishing of a return or a revised return under section 15, of the Act whichever is later"---Expression "whichever is later" being a rider related to date of return or revised return filed under S.15 of Wealth Tax Act, 1963, which did not allow comparison between "four years" of first part and "two years" of second part of S.17-A(1)(b) thereof---C.B.R.'s Circular No.2 would be read in consonance with provision of S.17-A of Act, 1963---Such Circular being contrary to provisions of clause (b) of S. 17-A(1) of Wealth Tax Act, 1963 would not be binding on Assessing Authorities---Assessment made beyond two years from date of return or revised return, would be invalid and coram non judice.

Ch. Saghir Ahmed for Appellant.

ORDER

The respondent assessee filed this wealth tax return for the year, 2000-2001 on 31-10-2000. The Deputy Commissioner of Income Tax/Wealth Tax, Circle I, Multan on proceeding ex parte finalized the assessment through order, dated 30-6-2004. The assessee's appeal thereagainst was accepted by the Commissioner of Income Tax/Wealth Tax (Appeals), Multan, through order, dated 29-6-2005, holding the Deputy Commissioner's order to have been finalized beyond the prescribed limitation period of two years under section 17-A(l)(b) of the Wealth Tax Act, 1963. The Revenue took an appeal before the Income Tax Appellate Tribunal, Lahore Bench, Lahore. Through order, dated 25-4-2006 the learned Lahore Bench of Income Tax Appellate Tribunal dismissed the appeal of the Revenue and upheld the above said order of the Commissioner of Income Tax (Appeals), holding that the time limit for completion of wealth tax assessment was two years where the return had been filed and the period of four years as provided under section 17-A(1)(b) of the Act was applicable only to cases where the return had not been filed. Hence, the present appeal by the Revenue.

2. Our opinion has been sought by the department on the following questions:--

Whether under the facts and in the circumstances of the case the learned Income Tax Appellate Tribunal was justified to cancel the assessment made on 30-6-2004 for the assessment year 2000-2001 holding the same to be time barred for the reason that the return had been filed on 31-10-2000 while totally ignoring the availability of a period of four years from the end of the assessment year in which the net wealth was assessable i.e. 30-6-2005?

3. Heard.

4. Similar question was considered and decided by a Division Bench of this Court, of which one of us (Muhammad Sair Ali, J.) was a member, in numerous Appeals of the Revenue. Through judgment, dated 3-5-2006 rendered in ITA No.254 of 1999 it was held that:--

"(12) The present appeals involve assessment of the returns filed under section 15 ibid for the assessment years commencing after the first day of July, 1981. And to these returns clause (b) of subsection (1) of section 17A applied.

(13) The first part of clause (b) provides a period of "four years from the end of assessment year in which the net wealth was A first assessable." The above quoted text of the first part of section 17-A(1)(b) ends at a comma which again is followed by the word "OR" in clause (b). The comma and then `or' separate the above quoted first part from the second part. It thus emphasizes the disjunctiveness and independence of the second part which provides a period of "two years from the date of the furnishing of a return or a revised return under section 15, whichever is later...." In the cases before us, the returns or the revised returns were filed under section 15 by the assessees.

(14) The rider "whichever is later" related to the date of the return or the revised return filed under section 15 ibid which gave a right to an assessee to file a return even after the period under section 14 or if such return was filed but suffered from an omission or a wrong statement, a revised return could be filed by the assessee.

(15) In view of the independence and disjunctiveness of the second part of clause (b) of subsection (1) of section 17A, the Assessing Authorities were allowed the powers to make the assessment within "two years of the date of the return or the revised return", whichever was later. The concession thus given to Revenue by the Statute was viz. the date of the return or the revised return respectively filed under section 15. The expression "whichever is later" did not allow comparativeness between "four years" of the first part and the "two years" of the second part. Such interpretation would be defeative of the independence of two separate statutory provisions distinctly legislated in clause (b). Any guidelines or instructions in C.B.R.'s Circular No.2 contrary to the above interpreted provisions of clause (b), was not binding on the assessing authorities as the circular was to be read in consonance with the provisions of section 17A ibid:

(16) The learned Income Tax Appellate Tribunal validly adjudged the assessment made beyond the period of two years from the dates of the returns or the revised returns as invalid and coram non judice.

(17) The questions as raised in the present appeals are answered as above with the result that the appeals are dismissed."

5. The present appeal involves the identical facts and the question. As such for the reasons recorded in the above referred judgment, dated 3-5-2006 passed in I.T.A. No.254 of 1999 this appeal is dismissed.

S. A.K./C-49/LAppeal dismissed.