COMMISSIONER INLAND REVENUE VS MUHAMMAD KHALID SETHI, 2017 PTD-LAHORE-HIGH-COURT-LAHORE 2461 (2017)

Income Tax Ordinance (XLIX of 2001)---

----Ss. 122(5) & 133---Amendment of assessment---Jurisdiction of High Court under S.133 of the Income Tax Ordinance, 2001---Nature---Question of Law---Scope---Question before the High Court was "whether Appellate Tribunal was justified in holding that amendment of taxpayer's assessment was not justified in the circumstances of the case"---Held, wealth statement, Bank statements and other document were filed by taxpayer in his reply to the Department and entries referred to by Department were all duly explained, and therefore there was no occasion for amending assessment of taxpayer under S.122(5) of the Income Tax Ordinance, 2001 and no question of law arose in the present case---High Court declined to exercise jurisdiction under S.133 of the Income Tax Ordinance, 2001, in circumstances.

Liaqat Ali Chaudhry for Appellant.

Ch. Qamar uz Zaman for Respondent.

ORDER

AYESHA A. MALIK, J.---This is a Reference under section 133 of the Income Tax Ordinance, 2001 ("Ordinance").

2.Following question of law is pressed for our opinion, which is asserted to have arisen out of order dated 12.05.2016 passed by the Appellate Tribunal Inland Revenue, Lahore ("Appellate Tribunal"):-

"Whether the learned ATIR is justified in holding that other provisions of Income Tax Ordinance, 2001 including section 122(5) become inapplicable if statement under section 115(4) read with section 113A of the Income Tax Ordinance, 2001 is filed?

3.The basic case of the Applicant is that an order was passed under Section 122 (5) of the Ordinance for amendment of assessment of the income tax for the year 2007. Proceedings were initiated to probe into the allegations that the Respondent taxpayer, who is not filing his return and has bank accounts in Askari Bank and Al-Faisal Bank, Paris Road, Sialkot but has not disclosed the same. The Respondent taxpayer filed his reply along with relevant documents which included bank statements for the relevant period, wealth statement as on 30.06.2007 and copies of sale deeds of the properties owned in Sialkot. The Applicant concluded that the taxpayer had concealed the particulars of his income especially with reference to the bank accounts maintained with Askari Bank and Al-Faisal Bank, Paris Road, Sialkot and with reference to the properties owned in Sialkot. Hence an order to award the assessment was issued on 30.06.2012. Feeling aggrieved, the taxpayer filed an appeal before the Commissioner Inland Revenue (Appeals), Multan (Camp at Sialkot), who found that the taxpayer has disclosed all his wealth through wealth statement and has also disclosed bank accounts which show that a loan has been obtained for the purposes of properties which were also duly disclosed. Therefore the appellate authority came to the conclusion that there was no justification to amend the assessment order as there was no information before the department on the basis of which any loss to revenue could be explained. The department filed an appeal before the Appellate Tribunal, which agreed with the decision of the Commissioner and found that the taxpayer had filed its statement for final taxation under Section 113A of the Ordinance and in such circumstances, an amendment order could not be issued under Section 122 of the Ordinance.

4.We have heard learned counsel for the parties at length and find that the basic reasons with the Commissioner for accepting the appeal of the taxpayer was that there is no definite information on the basis of which the department could have concluded that the loss was caused to revenue by concealing income. Admittedly, wealth statement, bank statements and proper documents were filed and the entries referred to by the department were all duly explained. Under the circumstances, we are in agreement with the orders of the Commissioner as well as the appellate authority in that there was no occasion to issue an order for amending the assessment under section 122(5) of the Ordinance. Therefore, the question of law raised by the Applicant is not made out from the orders impugned.

5.Under the circumstances. we decline to exercise our jurisdiction. Reference application is decided against the Applicant Department.

6.Office shall send a copy of this order under seal of the Court to the Appellate Tribunal as per section 133(5) of the Ordinance.

KMZ/C-26/L Order accordingly.