1989 PLP (Trib (PTD)

3. The assessee felt aggrieved and filed an appeal before the Appellate Assistant Commissioner of Income Tax Range-B, Faisalabad against the order passed by the I.T.O. In response to the said notice. Ch. Bashir Ahmed, Authorised Representative, who appeared alongwith Mr. Mazhar Hakeem son of the appell4nt assessee had based the appeal on the following grounds:- (1) That the order of the Income-tax Officer was not provided to the Appellant. As the assessment order is not provided to the Appellant, therefore, levy of tax without proper order is not valid in the eyes of law. (2) That in spite of my registered letter to the Income Tax Officer that no Assessment Order has been supplied; even my remarks on the Demand Notice which was served without any Assessment Order the demand of tax not valid in the eyes of law. (3) That apart from the above the estimate of income at Rs.1,47,325 against declared income of Rs.72,075 is highly excessive, arbitrary, unjustified and without any material before the Income Tax Officer as is evident from IT-30, issued to the Appellant. (4) That the appellant reserves the right to amend, alter or add any fresh ground of appeal on or before the hearing of this appeal. Perusal of the assessment record reveals that the I.T.O. passed the assessment order on 30-6-86 which was got approved by the I.A.C. Range-I, Faisalabad on 26-6-80. As such the contention of the appellant assessee that no order was passed, was not borne out from the facts of the case. The quantum of assessment challenged by the appellant assessee was also given due consideration by the A.A.C. who found that the assessment was completed on a lump sum basis for 16 Powerlooms without examining the Trading Account when most of the purchases were claimed to be imports and could have been easily verified. The learned A.A.C. therefore, set aside the order dated 30-6-1986 passed by the I.T.O. and directed him to work out the income of the assessee by applying proper G.P. rate on a reasonable estimate of sale.

4. The appellant/assessee has now come up in further appeal objecting to the notice of demand under section-85 of the Ordinance dated 30-6-1986 served on the assessee on 16-7-1986 as to be illegal being not supported with the order. On the date fixed for hearing; Ch. Bashir Ahmed, Advocate, authorised Representative of the assessee was present and Mr. Munir Qureshi, AC/DR represented the Department. The assessee's A.R. mainly contended that the said notice of demand under section 85 of the Ordinance was received by the assessee without an order of assessment. It was duly endorsed on the copy of demand notice that assessment order was not served with the demand notice. This fact was brought to the notice of the Income Tax Officer under registered cover letter requesting him to send a copy of assessment order, which has not been received earlier. Mr. Munir Qureshi, AC/DR strongly refuted the contention of the assessee and urged that the order of the I.T.O. was provided to the appellant assessee; hence, his plea raised is mala fide and against the facts on record.

5. The law on the point contained in section 85 (1) of the Ordinance, is reproduced for facility of reference:- "

85. Payment of tax m demand. --(1) where any tax is payable in consequence of any assessment or other order under this Ordinance, the Income Tax Officer shall serve upon the assessee, or any other person liable to pay such tax on behalf of the assessee a notice of demand to the prescribed form specifying the sum payable and thereupon the sum so specified shall be paid to the credit of the Federal Govt. within the time specified in the said notice." A plain reading of this section makes it quite clear that the Income-Tax Officer is supposed to furnish a notice of demand only specifying the sum payable. Such notice of demand is issued under this section in respect of any tax penalty or interest payable under the law. If there is no valid order under which tax penalty or interest is payable by the assessee, no valid notice of demand can be issued against under this section. After the income is computed and the tax determined the recovery proceedings start with the issuance of a notice under section 85 of the Ordinance. In practice, once an assessment is made, it becomes final except that it be reopened in any of the ways specified in the Ordinance. Where a final assessment has been made and a notice of demand issued any fresh computation of income, otherwise, that in accordance with the provisions of the Ordinance, and a fresh notice of demand would be illegal.

6. Though the Income-tax Officer has very wide powers and is not fettered by technical rules of evidence and pleadings there is one over riding restriction on his judgment, and that is he must act judiciously on the material however, inadequate before him, and not vindictively, capriciously or arbitrarily. The appellant/assessee, in fact, has not challenged the validity of the impugned order, his only contention is that he did not receive the assessment order with this notice of demand or prior to it, which is misconceived idea. The appellant/assessee has already failed to establish this before the learned Commissioner of Income-Tax, Appeals hence the notice of demand has become a debt due to the Government when demand is made. Nothing compels the Taxing Officer under Section 85 of the Ordinance to give any sort of explanation, such as, assessment order penalties imposed and any other substituted element against a miscreant or a person who evades the public bounty or the State Revenue. Section 85 of the Ordinance, is, in fact, remedisal in nature rather procedural. The levy of tax and its recovery are two different modes.

7. In the face of these circumstances, there is no reason to disbelieve the contention raised by the AC/DR that the assessment order was provided to the assessee, therefore, this plea of non-furnishing the same is not tenable.

8. The appeal is dismissed. M.BA/620/T??????????????????????????????????????????????????????????????????????????????????????? Appeal dismissed.