2005 PLP 1038 (PTD)

In this appeal by the Revenue under section 136 of the late Income Tax Ordinance, 1979 following question of law is stated to have arisen out of an order of the Income Tax Appellate Tribunal, Lahore Bench, Lahore, dated 25-5-1998:-- Whether or not under the facts and circumstances of the case the learned ITAT was justified in directing to accept the assessee s returned income under SAS when definite information regarding less declaration of net profit ratio vis-a-vis Sales turnover.

2. The respondent-assessee is an unregistered firm and during the period relevant to the assessment year 1992-93 derived income from export of Pressure Cookers. A return was filed to declare income at Rs.1,88,

350. However, its case was selected for total audit under para. 4(ii) of the scheme for the reason that net profit ratio to turnover at 0.7% was grossly low as compared to the declared net profit ratio to turnover at 3.4% for the assessment year 1990-91.

3. After selection of the case original assessment was finalized under section 62 of the late Income Tax Ordinance, 1979 at Rs.7,89,

350. However, it was set aside by the learned CIT(Appeals), Sialkot directing the Assessing Officer to again consider the eligibility of the return for acceptance under self-assessment scheme. The Assessing Officer however, repeated the same treatment to the assessee.

4. On appeal in the second round the learned CIT (Appeals) rejected the claim of the assessee for acceptance of return under Self-Assessment Scheme. Learned Tribunal however, by way of the impugned order allowed the appeal filed by the assessee on the round that if a comparison had to be made then it should have been made with the net profit ratio for the assessment year 1991-92 instead of assessment year 1990-91. Hence this further appeal.

5. After hearing the learned counsel for the Revenue, we will decline to answer the aforesaid question. The issue if a return filed by an assessee qualified for acceptance under self-assessment scheme is necessarily based upon facts. Also it does not involve or raise a substantial legal controversy between the Revenue and the assessee in a recent opinion expressed on 14-11-2000 in CTR No.20/91 in re: CIT v. Messrs Imminam International, Lahore, we have discussed the issue at length in the light of the judgment of the Hon ble Supreme Court of Pakistan in re: Lungia (Sylhet) Tea Co. Ltd. v. Commissioner of Income Tax, Dacca Circle, Dacca (1970 SCMR 872). The Hon ble Apex Court in that case held that every question of law need not be referred to the High Court and that only a question having some substance needed to be so referred. The question as framed is neither of law nor have raised a substantial legal controversy between the parties and therefore, we will decline to answer.

6. Appeal dismissed in limine. H.B.T./C-43/L Appeal dismissed.