MANDVIWALLA ENTERTAINMENT (PVT.) LTD VS COMMISSIONER OF INCOME-TAX, KARACHI, 2008 PTD-KARACHI-HIGH-COURT-SINDH 1487 (2008)

Income Tax Ordinance (XXXI of 1979)---

----Ss.13 (1)(a), 61, 62 & 143-B---Income Tax Ordinance (XLIX of 2001), S.133 (4)---Reference to High Court---Material for assessment, non-providing of---Effect---Determination by assessing officer---Scope---Assessing officer was not satisfied with income tax return filed by assessee---Notice under Ss.61 and 62 of Income Tax Ordinance, 1979, was issued to assessee and on his failure to provide required details and information, assessment was finalized by assessing officer---Assessment made by assessing officer was maintained by Commissioner Appeals as well as by Income Tax Appellate Tribunal---Validity---From the conduct of assessee it was clear that it had failed to furnish sufficient material in support of its case---In absence of any material to the contrary, assessment was rightly finalized by assessing officer---Income Tax Appellate Tribunal had recorded its findings of facts on the basis of material on record which did not give rise to any legal controversy---Income Tax Appellate Tribunal had neither ignored any material on record nor had misconstrued any provision of law---Forums below assigned reasons in support of assessment order---High Court did not find any illegality or perversity in orders passed by the forums below---Assessee could not blame others for his own fault and negligence---Reference was dismissed in circumstances.

Haider Naqvi for Applicant.

Jawaid Farooqi for Respondent.

ORDER

NADEEM AZHAR SIDDIQI, J.---The applicant has challenged the order, dated 21-3-2005 passed by the Income Tax Appellate Tribunal, Karachi, whereby the appeal filed by the applicant against the order of CIT(A), dated 21-6-2003 was dispose of.

The facts necessary for disposal of this appeal are that the applicant is a private limited company engaged in the business of imported films distribution and commission with rental income furnished the return of income or the assessment year 2000-2001 at loss of Rs.346,885. The Assessing Officer has issued notice under sections 61 and 62 of Income Tax Ordinance, 1979, (hereinafter referred as the Ordinance) and on failure of the applicant to provide required details and information finalized the assessment assessing the income to Rs.57,55,075. The applicant has challenged the assessment order before the Commissioner of Income Tax (Appeals) who has disposed of the same maintaining the assessment made by the Taxation Officer. The order of Commissioner Appeals was challenged before the Tribunal who has maintained the findings of Commissioner (Appeals) hence this reference.

The learned counsel for applicant has framed the following questions of law:--

(1) Whether in facts and circumstances of the case the learned Income Tax Appellate Tribunal has erred in holding that notice issued under section 62 of repealed Income Tax Ordinance, 1979 prior to examination of books has legal authorization.

(2) Whether learned Income Tax Appellate Tribunal has erred in confirming the order passed by learned Assessing Officer under section 62 of the repealed Income Tax Ordinance, 1979 despite cognizant of the facts that applicant failed to comply with any of the terms of notices issued under sections 61 and 62 of the repealed Income Tax Ordinance, 1979.

(3) Whether in facts and circumstances of the case the learned Income Tax Appellate Tribunal has erred in holding that without examining the books of accounts addition under section 13(1)(a) of the repealed Income Tax Ordinance, 1979 has any legal approval.

(4) Whether in facts and circumstances of the case the learned Income Tax Appellate Tribunal has erred in incorrect assumption that those receipts of applicant can again be taxed in the hands of applicant which has already been taxed at import stage under section 50(5) of the repealed Income Tax Ordinance, 1979 by ignoring that tax deducted at import is considered to be full and final tax liability.

(5) Whether in facts and circumstances of the case learned Income Tax Appellate Tribunal has erred in holding that the prejudicial action of learned Commissioner of Income Tax (Appeals) and learned Assessing Officer is judicious who in presence of two equal probabilities did not give benefit of doubt to applicant and assessed with one thousand seven hundred fifty nine per cent addition in declared version.

The learned counsel for applicant submits that the assessment was finalized ex parte under section 63 of the Ordinance without providing proper opportunity of hearing and production of account books and other documents. He submits that the assessment cannot be finalized under section 63 of the Ordinance on the basis of an unjustified and unlawful notice under section 62 of the Ordinance. He then submits that no material was available with the Assessing Officer who finalized the assessment on the basis of presumptions and not on the basis of the accounts of the applicant.

Mr. Jawaid Farooqi, learned counsel for the respondent submits that the assessment was not finalized ex parte under section 63 of the Ordinance but the same was finalized under section, 62 of the Ordinance on the basis of audited accounts filed by the applicant at the time of filing of return. He then submits that before finalizing the assessment several notices were issued to the applicant and ample opportunities were provided to the applicant to produce the account books who declined to produce the same.

The Assessing Officer has finalized the assessment on the basis of material available on record as the applicant in spite of repeated opportunities declined to provide the books of' account and the other details asked by the Assessing Officer. It is an admitted position that the applicant along with the return has filed the audited accounts, statement under section 143-B of the Ordinance and profit and loss account. The assessment order was finalized after issuance of notice under section 61 of the Ordinance and under section 62 of the Ordinance on the basis of material available on record and by doing so that Assessing Officer has not committed any error. The Commissioner Appeals has also rightly maintained the assessment order. The Tribunal has reduced the estimated receipts from Rs.45,00,000 to Rs.43,00,000 and maintained 1/3rd curtailment in the expenses on the ground that assessment has not furnished any evidence or details of expenses. The Tribunal has also maintained the addition of Rs.43,04,869 under section 13(1)(a) of the Ordinance on the ground that accounts are clear to show that creditors have swollen from Rs.35,36,460 in the previous years to Rs.78,41,329 in this year.

From the conduct of the applicant it is clear that it has failed to furnish sufficient material in support of its case and in absence of any material to the contrary the assessment was rightly finalized. The learned Tribunal has recorded its findings of facts on the basis of material on record which did not give rise to any legal controversy. The Tribunal has neither ignored any material on record nor has misconstrued any provision of law. The learned Forums below have assigned reasons in support of assessment order and we do not find any illegality and perversity in the same. The applicant cannot blame others for his own fault and negligence.

For the foregoing reasons we find no substance in this ITR and accordingly dismissed the same in limine.

M.H./M-58/KReference dismissed.