2002 PLP 998 (PTD)

NASEEM SIKANDAR; J.‑‑‑This is a case stated by the Lahore Bench of the Income Tax Appellate Tribunal under section 136(1) of the Income Tax Ordinance, 1979. The following questions of law have been referred by them:‑‑‑ "(a) Whether on the facts and in the circumstances of the case the learned Income Tax Appellate Tribunal was justified ‑n observing that the amendment made through Finance Bill, 1937 in section 65 of the Income Tax Ordinance, 1979 was not applicable to the assessment proceedings for 1982‑83 initiated under section 65 on 2‑6‑1988, when the amendment had come into force with effect from 1‑7‑1987? (b) Whether on the facts and in the circumstances of the case, the proceedings ‑for earlier years could be initiated under section 65 when the return for 1986‑87 was filed as `new Tax Payer' claiming `Immunity from Total Audit'."

2. Learned counsel for the petitioner states and we will readily agree that question (b) needs to be answered in the negative. In a recent opinion expressed in C.T.R. No.345 of 1991 and a number of other reference in re: Muhammad Siddique v. CIT Zone‑A, Lahore (2001 PTD 1998), this Court concluded that where no assessment had been framed in the earlier years only a notice under section 56 of the Income Tax Ordinance, 1979 could be issued. Further that the provisions of section 65 of the Ordinance were applicable only in respect of assessments already framed or deemed to have been framed.

3. It is an admitted position that the assessee filed his return for the assessment year 1986‑87 as a new tax payer under Self‑Assessment Scheme. The wealth statement attached with the return disclosed that the assessee had purchased a shop during the period relevant to the assessment year 1982‑83 for a declared value of Rs.21,

500. The Assessing Officer issued a notice under section 65 of the Ordinance for the assessment year 1982‑83 and finally estimated value of the shop at Rs.1,00,

000. The difference between the declared. and the estimated value at Rs.78,500 was accordingly brought to tax under section 13(1)(d) and section 13(1)(aa) of the Income Tax Ordinance, 1979.

4. Learned First Appellate Authority maintained the initiation of proceedings under section 65 though the value of the shop as adopted ‑ac reduced to Rs.80,000.

5. On further appeal the Tribunal also confirmed not only the re opening of the assessment under section 65 of the Ordinance but also the valuation of the shop at Rs.80,000.

6. As said in para.2 no proceedings under section 65 could have been taken when there was neither an assessment nor a deemed assessment in the field. '

7. That being so our answer to the questions is in the negative. We hold that the proceedings against the assessee could not have been made under section 65 of the Ordinance, 1979 for the assessment year 1982‑83 when return for the year 1986‑87 was filed as a new tax payer.

8. In view of our above opinion question (a) is not needed to be answered. Accordingly this reference stands disposed of in terms of answer to question (b). C.M.A./M.A.K./A‑408/1 Reference answered.