M/s United Professional Movers.

APPELLATE TRIBUNAL INLAND REVENUE, SINGLE BENCH,

ISLAMABAD

ITA No.469/IB/2015

(Assessment Year 2001-2002)

******

Mr. Munir Fazla, M/s United Professional Movers. House No.1, Street No.6, F-7/3, Islamabad.		Appellant
	Vs
The Commissioner Inland Revenue, Zone-III, RTO, Islamabad.		Respondent
Appellant by		Mr. Waseem Ahmed Siddiqi, FCA
Respondent by		Ms. Naheed Akhtar Durrani, DR
Date of hearing		13.02.2020
Date of order		13.02.2020

O R D E R

M. M. AKRAM (Judicial Member):     This appeal has been filed by the appellant/taxpayer against an order No.463/2015 dated 20.03.2015 passed by the learned Commissioner Inland Revenue (Appeals-II), Islamabad for the Assessment Year 2001-2002 on the grounds as set forth in the memo of appeal.

2.    Brief facts giving rise to the instant appeal are that the appellant taxpayer is an individual, derives income from packing and freight forwarding business as well as rental income from property. Return for the Assessment Year 2001-2002 was filed declaring net income at Rs.953,333/- which was assessed under section 63 of the repealed Income Tax Ordinance, 1979 at net income at Rs.3,275,607/- on 30.06.2004. Against the said order, the appellant preferred appeal before the learned CIR(A) who vide order dated 15.07.2005 set aside the case for de-novo consideration. The appellant went into an appeal against the aforesaid appellate order before this tribunal whereby the case was set aside with the following observations:-

i.          Whether the case of the appellant qualifies to be accepted under SAS?

ii.         Whether the case was time barred? 

In compliance of the order of this Tribunal, re-assessment proceedings were initiated. In response to, the appellant submitted his detailed reply inter alia stating therein that his case qualifies to be accepted under Self Assessment Scheme. The assessing officer considered the reply but found unsatisfactory and he, therefore, ultimately passed an order dated 30.06.2012 whereby the net income was assessed at Rs.3,275,607/-. Felt aggrieved with this order, the appellant preferred an appeal before the learned CIR(A) who vide order dated 20.03.2015 again remanded the case to the assessing officer. Still feeling aggrieved, the appellant has assailed the aforesaid impugned appellate order before this Tribunal on a number of grounds.

3.    This case came up for hearing on 13.02.2020. The learned AR contends that the return so filed by the appellant was in accordance with the requirements of Self Assessment Scheme framed under section 59 of the Repealed Ordinance for the Assessment Year 2001-2002 and it fulfilled all the requirements, therefore, its case qualifies for acceptance under the Scheme. He explains that first notice was received by the appellant taxpayer on 18.02.2004 issued under section 61 of the repealed Ordinance therefore, by virtue of provision of section 59(4) ibid no order could be made after the end of the financial year next following the income year and there exists a deemed assessment order by fiction of law. The learned AR further argues that the appellant had neither received any notice before 18.2.2004 nor any letter to oust the return from the ambit of Self Assessment Scheme (SAS). Therefore, according to him, the notice issued under section 61 on 10.02.2004 was illegal and time barred in the presence of deemed order. To substantiate the aforesaid submissions, the learned AR relied upon the judgments titled as H  & Sons Vs Central Board of Revenue, (2005 PTD 147) and M/s Fazal Din & Sons Vs Federal Board of Revenue, Islamabad and others, (2009 SCMR 973). No other grounds enumerated in the memos of appeal were pressed by the learned AR.

4.    On the other hand, the learned DR has supported the order of the assessing officer and contends that the assessing officer has passed a speaking order after considering the submissions of the appellant and there is no infirmity in the orders. Further the DR argued that the case of the appellant did not qualify under Self-Assessment Scheme. She, therefore, prays for rejection of appeal.

5.    Arguments heard and relevant record available on file carefully perused. The submissions made by the learned AR on behalf of the appellant have no substance. The Self Assessment Scheme (SAS) for the assessment year under consideration was promulgated through Circular No.04 of 2001 dated 18^th June 2001 which provides the Scope of the Scheme. The relevant extract of the Scheme which is necessary to resolve the present controversy is reproduced hereunder for ease of reference: -

            1.         SCOPE OF THE SCHEME:-

1.1       All returns filed by tax-payers, other than cases that are in-eligible under para 7 of this Scheme, shall qualify for acceptance if they fulfill the following conditions, namely;

(a)       …………

(b)       …………

(c)        …………

(d)       …………

(e)       cases of persons not being companies, where tax payable on income declared is higher by twenty percent (20%) or more compared to the tax payable on the income last declared or assessed, whichever is higher. 

The expression “Income last assessed” has also been defined in the SAS which read as under: -

“Income last assessed” means that the income for any year assessed immediately before the date of filing of return by a taxpayer.  

It can be seen from the bare reading of the above scope of the scheme that all returns filed under Self-Assessment Scheme by the existing assesses qualified for acceptance except returns inter alia in cases where income declared is less than the income last assessed or the income last declared whichever is higher. In the Scheme, the expression “income last assessed” was described and it meant the income for any year assessed immediately prior to the assessment year 2001-2002, as it stands before the last date for filing of return of total income for the assessment year 2001-2002. It is thus clear from the Scheme itself that income last assessed for the purpose of Scheme was the income which was assessed through a proper assessment order prior to the assessment year 2001-2002. In the case of the appellant the last assessed income was for the Assessment Year 1999-2000 in which year income assessed was Rs.2,125,000/.The appellant while submitting the return for the Assessment Year 2001-2002 under Self-Assessment Scheme declared its income at Rs.953,333/- which obviously was less than the income assessed for the Assessment Year 1999-2000, as such the case of the appellant did not qualify for acceptance under the Self Assessment Scheme and the assessing officer had rightly passed the order in accordance with law. The provisions of section 59(4) of the repealed Ordinance would not be pressed into service under the circumstances of the case for the reason that the return filed by the appellant did not qualify for acceptance under the Scheme as it did not fulfill the condition as enumerated above. The judgments cited supra relied upon by the appellant do not come in rescue in the appellant’s case as the facts of the case in hand are different from the facts enumerated in these judgments. In the case reported as 2005 PTD 147, undisputedly, the return filed by the taxpayer was qualified to be accepted under SAS and notice under section 61 was issued after the deemed order passed under section 59(4) of the repealed Ordinance whereas in the instant case, as stated above, the return of the appellant did not qualify for acceptance under SAS and as such the provisions of section 59 of the repealed Ordinance would not be applicable in the instant case. Similarly the judgment reported as 2009 SCMR 973 is also not relevant under the facts and in the circumstances of the present case. The contention of the appellant that at the time of filing of return for the Assessment Year 2001-2002, the order passed in respect of Assessment Year 1999-2000 was under appeal and therefore, it cannot be compared to the tax payable on the income last assessed is also not tenable. Further I have noticed that the learned CIR(A) has remanded the case without appreciating the fact that Finance Act, 2005, brought about amendment in section 129(1) of the Ordinance and the provisions empowering the First Appellate Authority to set aside the assessment order with the directions to make new assessment order had been deleted. Besides, the amendment conferred extensive powers to the Commissioner (Appeals) to examine evidence and to undertake further enquiries to decide the case instead of remanding it for de-novo assessment proceedings. Further it is pointed out that question of remand back the case to the assessing officer for a new assessment came up for hearing before the Full Bench of this Tribunal in the case reported as 2012 PTD 1032 wherein it has been held that after the amendment through Finance Act, 2005 in section 129 of the Ordinance, the Commissioner lacks the power to remand the case to the assessing officer. Relevant extracts of the said judgment is reproduced hereunder: -

“16. We have considered the rival arguments and perusal the record. We agree that the learned Commissioner Inland Revenue (Appeals) was divested of his powers to remand the case for de-novo proceedings. The language of the amendment brought about by the Finance Act, 2005, is unambiguous. Even F.B.R. (then C.B.R) issued the following directions in the Circular No. 1 of 2005(Income Tax) to the same effect: "Setting Aside of assessment order by Commissioner (Appeals). (Section 129(1)(a)):-   

Clause (a) of subsection (1) of section 129 has been substituted and Commissioner   (Appeals) has been divested of the option to set aside an assessment. After amendment Commissioner (Appeals) would be able only to modify, confirm or annul the assessment after making (or getting conducted) inquiries or examining the books of accounts etc. as he deems fit. This will bring relief to the taxpayer and also stop unnecessary deferment of revenue. The provision of said clause will be applicable in case of appeals filed on July 1,2005 and on wards."        

17. The language of the amended provision clearly empowers the Appellate Authority to undertake further inquiries and examine the record for deciding the case by the Authority itself without sending the case back to the Assessing Officer. The opinion expressed in the judgment of this Tribunal, relied upon by the CIR (Appeals), that the Appellate Authority had inherent jurisdiction to set aside the case, was rendered in oblivion of the language of the amendment and the unambiguous law regarding the concept of set aside of assessment for de novo, proceedings under the Income Tax Law and the judgment of the Hon'ble Supreme Court of Pakistan in the case of Sindh Employees Social Security supra. We, therefore, follow the legal provisions and the law laid down by the Hon'ble Supreme Court of Pakistan in holding that the Commissioner Inland Revenue (Appeals) lacked jurisdiction to remand the case to the Assessing Officer for new assessment order”.(Emphasis supplied) 

6.    For what has been discussed above, the appeal filed by the appellant is dismissed being devoid of merit. Accordingly, the order passed by the learned CIR(A) is vacated and the original order passed by the assessing officer is restored.

7.    Appeal of the appellant taxpayer is disposed of in above terms. This order consists of (05) pages and each page bears my signature.

Sd/-

(M.M. AKRAM)

JUDICIAL MEMBER

(Empowered u/s 130 (8AA) of the Income Tax Ordinance, 2001 to exercise powers and functions of the Appellate Tribunal sitting singly).