2010 PTD (Trib.) 33
[Income-tax Appellate Tribunal Pakistan]
Before Syed Nadeem Saqlain, Judicial Member and Mazhar Farooq Shirazi, Accountant Member
W.T.As. Nos. 57/LB to 58/LB of 2009, 1/LB to 2/LB of 2009, decided on 07/05/2009.
Wealth Tax Act (XV of 1963)---
----S.23---Appeal to Appellate Additional Commissioner from orders of Deputy Commissioner---Annulment of assessment---First Appellate Authority annulled the assessments for the reason that assessments were made by the Taxation Officer who was not a prescribed authority under the Wealth Tax Act, 1963 and assessments made were illegal, void ab initio---Department did not challenge the findings given by the First Appellate Authority before the Appellate Tribunal---Since annulled assessments were not hit by limitation, after issuing statutory notices, fresh assessments were framed by the competent/proper authority having the designation of Deputy Commissioner of Income Tax/Wealth Tax---Assessee contended that assessment framed by the Taxation Officer was got annulled by the First Appellate Authority being without jurisdiction, a vested right was created in favour of the assessee and to provide an opportunity to frame fresh assessment tantamount to snatching away that right---Very fact of making fresh assessment would show that the original assessment framed by the Taxation Officer did not have the legal backing and hence no legs to stand on---Validity---Admittedly, the department did not challenge the findings recorded by the First Appellate Authority in the first round of litigation and it attained finality---It was not the issue that whether original re-assessment order was made by the competent authorities but the moot point was that whatever the findings given by the First Appellate Authority, those findings remained uncontested---By not challenging the order passed by the First Appellate Authority, vested right had accrued in favour of the assessee---Order passed by the First Appellate Authority was vacated and assessment framed by the Assessing Officer were cancelled by the Appellate Tribunal.
2002 PTD 2379 rel.
2008, PTD 823 distinguished.
Shahid Pervaiz Jami for Appellant.
S.A. Masood Raza Qazilbash, D.R. and Ghulam Nabi Tahir, D.C.I.T. for Respondent.
ORDER
The present wealth tax appeals relating to the assessment years, 1999-2000 and 2000-2001 have been preferred at the behest of the assessee/appellant, challenging the combined impugned order dated 1-12-2008, passed by the learned C.I.T.(A), Gujranwala Camp at Faisalabad.
2. Facts in brief are that the original assessments in the present case for the charge years 1999-2000 and 2000-2001 were completed under section 16(3) of the repealed Wealth Tax Act, 1963 (hereinafter called the repealed Act) by the Assessing Authority with the designation of Taxation Officer. The assessee preferred appeal before the learned C.W.T. who annulled the assessments for both the years under appeal for the reason that assessments were made by the Taxation Officer who was not a prescribed authority under the repealed Act and thus assessments made were illegal, void ab initio. The department did not challenge the findings given by the learned First Appellate Authority before the Tribunal. Since annulled assessments were not hit by limitation as prescribed by the repealed Act, after issuing statutory notices, fresh assessments for the years assessments were not hit by limitation as prescribed by the repealed Act under consideration were framed by the competent/proper authority having the designation of DCIT/W.Tax. These assessments were once again contested in appeal before the learned C.I.T.(A), Faisalabad on the ground that: (1) Whether an assessing authority could proceed with the assessment afresh, in spite of the fact that original assessment was annulled by an appellate forum; (2) Whether the fresh assessment made by the wealth tax officer was time-barred". The learned First Appellate Authority vide an Order dated 11-1-2005, cancelled the same for de novo assessment for the reasons that the same were hit by time limitation. However, it is worth-mentioning that the learned C.I.T.(A) did not adjudicate the first ground but annulled the assessments on the basis of second ground that the assessment so framed was time-barred. In further appeal before the Tribunal, the appeals filed on behalf of the department were dismissed vide an order dated 28-6-2005, and on further legal proceedings, reference application filed before the Honourable Lahore High Court also met the same fate. However, the august Supreme Court of Pakistan vide a judgment dated 18-10-2007 while deciding in favour of the department accepted the view held by the Revenue on the issue of limitation. The Assessing Officer through an order dated 28-2-2008 while giving consequent effect to the judgment of the Honourable Supreme Court came to the conclusion that the original order stood restored, since the issue of limitation has been decided by the apex Court in favour of the department. The assessee preferred appeal before the learned First Appellate Authority who vide an order dated 23-9-2008 confirmed the treatment meted out to the assessee.
3. The wealth tax appeals bearing W.T.A. Nos. 1 and 2/LB/2009 is a separate set of appeals against the order dated 23-9-2008. It is important to mention here that after the judgment dated 18-10-2007, passed by the apex Court, whereby the issue of limitation was resolved, the assessee moved a rectification application before the learned First: Appellate Authority that since in the first round of litigation appeals of the assessee were decided on the issue of limitation, and that said issue stands decided by the Supreme Court of Pakistan, the rest of the ground Which remained un-adjudicated may also be taken up and be decided on merit. Failing before the learned First Appellate Authority who vide an order dated 23-9-2008, dismissed the appeals, the assessee is in further appeal before the Tribunal vide Wealth Tax Appeals Nos.1 and 2/LB of 2009.
4. Both the parties have been heard and relevant orders perused. First of all we take up appeals bearing W.T.A. Nos.57 to 58/LB/09 as under.
5. The learned A.R. submits that the main issue which warrants adjudication by this Court is that whether after the annulment of original assessment, a fresh assessment could possibly be made. The learned A.R. has vehemently contested that order passed by the learned First Appellate Authority whereby assessments framed by the Assessing Authority were declared to be null and void for the reason that the same were not made by a proper/competent authority, attained finality since the said order passed by the learned C.I.T.(A) was never challenged before any higher legal forum. The learned A.R. further argued that it was not a procedural mistake which could be cured by the concerned authority rather it was an issue which involves question of jurisdiction and competency and which goes to the roots of the case. The learned A.R. further submitted that the assessment framed by the Taxation Officer was got annulled by the learned C.I.T.(A) being without jurisdiction, a vested right, was created in favour of the assessee and to provide an opportunity to frame fresh assessment tantamounts to snatching away that right. The learned A.R. pointed out that the very fact of making fresh assessment would show that the original assessment framed by the Taxation Officer did not have the legal backing and hence no legs to stand on. In support of his contention, the learned A.R. relied upon the judgment of Peshawar High Court reported as 2002 PTD 2379.
6. The learned D.R. has strenuously opposed the arguments advanced by the learned A.R. It has been urged at the bar that there is no legal bar with regard to the making of re-assessment, cases in which original assessments were annulled specially under section 17 of the repealed Act. The learned D.R. has also relied upon judgment of the Lahore High Court, Lahore reported as 2008 PTD 823.
7. We have heard the learned counsel for both the parties and have also gone through the relevant orders. After hearing the contentions raised by the rival parties, we tend to agree with the arguments tendered at the bar by the learned A.R. Admittedly, the department did not challenge the findings recorded by the learned First Appellate Authority in the first round of litigation, hence it attained finality. It is not the issue at this stage that whether original re-assessment order was made by the competent authorities but the moot point is that whatever the findings given by the learned C.I.T.(A) those findings remained uncontested. It is also worth mentioning that by not challenging the order passed by the learned first appellate authority, vested right accrued in favour of the assessee. The supra cited judgment relied upon by the learned A.R. is also on all fours to the case of the assessee. In somewhat similar circumstances, the order of the Appellate Tribunal was not challenged either through reference or appeal before the High Court. The Honourable Peshawar High Court rejected the contentions of the counsel for income tax authority that by annulling the assessment order, the department would not be deprived of the right of re-assessment under section 62(a). It was held that relief granted to the petitioner vide an order of the Appellate Tribunal was that the case of the petitioner for the assessment year, 1994-1995 was finally closed once for all. We have gone through the judgment of the Honourable Lahore High Court, Lahore wherein it has been held that an assessment framed by a taxation officer would not cause any prejudice to the assessee, however, the judgment relied upon by the department is distinguishable for the reason that the order whereby the original assessment framed by the Assessing Authority was annulled, was never challenged before any higher forum while in the instant case the assessment was challenged before the higher appellate forum and stood cancelled by it. We must observe that had the re-assessment been made in pursuance of directions made by any higher Appellate Authority, the situation would have been different. In this view of the fact we vacate the impugned order passed by the learned First Appellate Authority and cancel the assessment framed by the Assessing Officer, dated 26-6-2004.
8. Since the issue which warranted adjudication has been decided through the present order in W.T.As. Nos. 57 to 58/LB/09, the appeals preferred against the judgment dated 23-9-2008 vide W.T.As. Nos.1 and 2/LB/09 have become infructuous, hence disposed of accordingly.
C. M. A./129/Tax(Trib.)Order accordingly.