APPELLATE TRIBUNAL INLAND REVENUE, SINGLE BENCH,
ISLAMABAD
ITA No.469/IB/2015
(Assessment Year 2001-2002)
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Mr. Munir Fazla, M/s United
Professional Movers. House No.1, Street No.6, F-7/3, Islamabad. |
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Appellant |
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Vs |
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The Commissioner Inland Revenue,
Zone-III, RTO, Islamabad. |
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Respondent |
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Appellant by |
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Mr. Waseem Ahmed Siddiqi, FCA |
Respondent by |
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Ms. Naheed Akhtar Durrani, DR |
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Date of hearing |
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13.02.2020 |
Date of order |
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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of the repealed Income Tax Ordinance, 1979 at net income at Rs.3,275,607/- on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 18th 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).
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