VS, 2008 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 397 (2007)

(a) Income-tax---

----Legal grounds---Additional grounds having been taken by the assessee were legal grounds and also went to the roots of the case, the miscellaneous applications filed were accepted by the Appellate Tribunal and additional grounds submitted were formed part of the original grounds.

(b) Income Tax Ordinance (XXXI of 1979)---

----Ss. 52 & 86---Liability of persons failing to deduct or pay tax---Limitation---Assessee contended that original assessment framed under Ss. 52/86 of the Income Tax Ordinance, 1979 were time-barred and all the subsequent proceedings conducted were void ab intio as assessments were framed on 16-10-1999 while proceedings under Ss. 52/86 of the Income Tax Ordinance, 1979 for the respective assessment years were supposed to be concluded by 30-6-1997 for the assessment year 1993-94", by 30-6-1998 for the assessment year 1994-95", and by 30-6-1999 for the assessment year 1995-96---Validity---Stance of assessee had been substantiated by the judgments of superior Courts-Held, assessments framed for all the three years were time barred and directed to be cancelled by the Appellate Tribunal.

2003 PTD 1571; 2003 PTD (Trib.) 1167; 2003 PTD 2287 and 2003 PTD 963 rel.

Siraj ud Din Khalid for Respondent Appellant (M.A. (A.G.), Nos.106/LB to 108/LB, I.T.As. Nos.4322/LB to 4324/LB of 2004).

Manzoor Hussain Shad, D.R., for (M.A. (A.G.). Nos.106/LB to 108/LB, I.T.As. Nos.4322/LB to 4324/LB of 2004).

Manzoor Hussain Shad, D.R., for Appellant (I.T.A. No.4644/LB of 2004).

Siraj ud Din Khalid for Respondent (I.T.A. No.4644/LB of 2004).

ORDER

Out of four captioned appeals of the assessment years 1993-94 to 1995-96, three appeal's have been filed at the instance of the assessee/ appellant. For the assessment year 1993-94 the department is also in cross-appeal. For all the three years the assessee took combined grounds, while agitating that the learned CIT(A) was not justified in confirming the charge of tax under section 52 of the repealed Income Tax Ordinance, 1979 (hereinafter called the repealed Ordinance). It is pertinent to mention here that subsequent to filing of assessee's appeal, following additional grounds were also submitted:--

"(1) That since the proceedings initiated under section 52; vide Show-Cause Notice No.212, dated 30-9-1999, were void ab initio being hit by limitation and laches, the entire super structure raised thereon is illegal and must fall to ground.

(2) That the order passed under section 86 by the lower taxation authority is illegal and liable to be cancelled, as the officer has failed to establish mala fide and deliberate default on the part of the assessee in default."

2. Since the additional grounds taken up by the assessee are legal grounds and also go to the roots of the case, the Miscellaneous Applications filed in this respect are accepted and the additional grounds are being formed part of the original grounds.

3. The Revenue filed cross-appeal for the assessment year 1993-94 agitating following ground of appeal:--

"That the CIT(A) was not justified to exclude the amount ofRs.26,48,410 from the purview of section 52 of Income Tax Ordinance, 1979."

4. Briefly stated the facts of the case are that the proceedings under section 52 of the repealed Ordinance were originally completed on 16-10-1999 which resulted in creation of liability amounting to Rs.6,84,212, Rs.10,39,403 and Rs.7,12,664 for the respective assessment years under consideration. On appeal preferred by the assessee, the learned CIT(A) cancelled the assessment framed by the Assessing Officer and remanded the case to the Assessing Officer with the direction to properly scrutinize and ascertain true facts with regard to purchases made by the assessee. In the second round of litigation the learned first appellate authority directed to modify the assessments framed by the Assessing Officer that payments made to Delite Industries at Rs.26,48,410 (Assessment year 1993-94)-ordered to be excluded from the payment since the same was incorrectly charged to tax under section 52. However, the assessments framed with regard to assessment years 1994-95 and 1995-96 were confirmed. The assessee is in appeal before the Tribunal assailing the same. Conversely, the revenue is also in appeal with regard to directions made by the learned CIT(A) for, the assessment year 1993-94.

5. We have heard both the parties and have gone through the relevant orders. Right at the outset the learned "A.R. has assailed the impugned findings with the contention that the original assessment framed under sections 52/86 of the repealed Ordinance were time-barred, hence all the subsequent proceedings conducted thereafter are void ab initio. It was argued by the learned A.R. that original assessments were framed on 16-10-1999 while proceedings under section 52 of 1986 for the respective assessment years were supposed to be concluded by 30-6-1997 for the assessment year 1993-94, 30-6-1998 for the assessment year 1994-1995 and 30-6-1999 for the assessment year 1995-96. He pointed out that clearly the framing of assessments under section 52 of 1986 on 16-10-1999 were time-barred because the law envisages passing of order under section 52/86 within four years from the end of the financial year. In support of his contention, the learned A.R. relied upon reported judgments cited as 2003 PTD 1571(H.C.), 2003 PTD (Trib.) 1167, 2003 PTD 2287 and 2003 PTD 963 and other wherein it has been held that proceedings under section 52 can be initiated during the financial year or period of issuance of notice under section 61 (for last 3 years i.e. within 4 years from the end of the Financial year). The learned D.R. has been heard in support of the Revenue who oppo3ed the arguments advanced by the learned A.R.

6 After hearing both the parties and going through the relevant orders as well as case-law cited supra, we have no hesitation in holding that law on the issue has already stands settled in a number of judgments including the superior Courts. The stance of the assessee also stands substantiated by the judgment cited at the bar. Keeping all the facts in view as well as in the light of reported judgment of the High Court, we hold that the assessments framed for all the three years were time-barred, hence directed to be cancelled.

7. As far as appeal of the Revenue is concerned, since we have cancelled the assessments for all the three years including assessment year 1993-94, the appeal of the Revenue has become infructuous, is hereby dismissed.

8. It is ordered accordingly.

C.M.A./183/Tax (Trib.)Order accordingly.