2012 PLP (Trib (PTD)

JAWAID MASOOD TAHIR BHATTI, JUDICIAL MEMBER.

Through this miscellaneous application, the applicant Department has requested for the rectification in the order of this Tribunal dated 15-6-2010 in cross appeals filed by the Department bearing I.T.A. No.342/KB of 2010 and I.T.A. No.323/KB of 2010 (Tax Year 2008) filed by the taxpayer. The following grounds have been framed by the Department: "(1) That against the appellate Order No. 46 dated 24-2-2010 passed by the learned Commissioner Inland Revenue (Appeals) the Department (as well as the taxpayer) filed appeal in the Appellate Tribunal Inland Revenue, Karachi for the tax year, 2008. (2) That the said appeal has been decided by the learned Appellate Tribunal Inland Revenue on 15-6-2010 vide order passed in I.T.A. No.342/KB of 2010 (Departmental) and I.T.A. No.323/KB of 2010 (taxpayer 's). (3) That the said order dated 15-6-2010 has been received in this Office on 23-6-2010. (4) That due to oversight typographical error has been crept in the said order that in the 13th paragraph (on page-08) of the order verdicts has been mentioned as under:

QUOTE: "

13. The assessment framed by the Taxation Officer in the Tax year 2008 being illegal has rightly been annulled. This obviously does not mean that the annulment of the order of the Taxation Officer restrains him from proceeding further for possible additions in relevant tax year as per law and rules in the case keeping in view provisions of section 111(2) after affording reasonable opportunity of being heard to the Taxpayer. For my these observations I find strength from the judgment of the Honorable Income Tax Appellate Tribunal in a case reported as (2007) 96 TAX 93 (Trib)." UN-QOUTED. In view of the afore-mentioned facts the learned ATIR has erred in observing "The assessment framed by the Taxation Officer in tax year, 2008 being illegal has rightly been annulled. This obviously does not means that the annulment of the order of the Taxation Officer restrains him from proceeding further for possible additions in relevant tax year as per law and rules in the case keeping in view provisions of section 111(2)............" In fact this is not a case of annulment because the learned Commissioner Inland Revenue (Appeals) has not annulled the amended order but has deleted the additions made under section 111 of the Income Tax ordinance, 2001 vide Order No. 46 dated 24-2-2010 has observed as under: QUOTED: "The appellant's case for the tax year 2007 was selected for audit under section 17(4) vide letter dated 31-7-2009. During the audit proceedings after examination of details, the appellant was confronted regarding unexplained bank credit and shop No.4 Nice Trade orbit through show cause notice dated 16-10-2009 for compliance by 22-10-2009. The explanation offered was not found definite information as envisaged in subsection (5) of section 122 of the Income Tax Ordinance, 2001, which was duly communicated to the appellant vide letter dated 16-10-2009, the period that relates to the tax year, 2010. Suffice to say that unless the discovery is made during the period of tax year, 2009, the additions under section 111 of the Income Tax Ordinance, 2001, in the tax year under appeal i.e. 2008, will be without jurisdiction, illegal invalid and not sustainable in law being void ab-initio. In view of the above, I have no hesitation in holding that provisions of section 111(2) of the Income Tax Ordinance, 2001, were not properly adhered to and the additions made under section 111 cannot be allowed to sustain and is hereby deleted." UN-QOUTE: In view of the afore-mentioned quotations it is apparent that this is not a case of annulment but of deletion. PRAYER Therefore, it is prayed that the Honorable Appellate Tribunal Inland Revenue may please rectify the said order dated 15-6-2010 passed in I.T.A. No.342/KB of 2010 and I.T.A. No.323/KB of 2010 and correction of verdicts may please be made in the interest of justice.

2. We have heard the learned representatives from both the sides and have also perused the above referred order of this Tribunal dated 16-6-2010, the impugned order of learned CIR(A) and other relevant available record of the case.

3. We have found that in the above referred order, this Tribunal has upheld the treatment meted out by the learned CIR(A) regarding deletion of additions made under section 111 of the Income Tax Ordinance, 2001 as the additions have been made in violation of the mandatory requirement of the provisions of law under section 111(2) of the Ordinance. We have further noted that in the above referred order, the referred Para 13 is regarding the assessment framed by the Taxation Officer being annulled. The learned DR representing the applicant Department has contended that this Tribunal has exceeded its jurisdiction in this paragraph as neither there was any ground of appeal in this regard requesting for the annulment of the assessment nor the ground in this regard was framed by the taxpayer. On the other hand, the learned counsel representing the taxpayer has contended that there is no mistake in the order of this Tribunal as the order in this regard has been made keeping in view the relevant provisions of law.

4. We have considered the submissions made from both the sides and have also gone through the relevant provisions of law. We do no find any force in the arguments of the learned DR that this Tribunal while passing the above referred order dated 15-6-2010 has exceeded the jurisdiction as under subsection (3) of section 132 of the Income Tax Ordinance, 2001, it is provided that where the appeal relates to an assessment order, the Appellate Tribunal may, without prejudice to the powers specified in subsection (2), make an order to affirm, modify or annul the assessment order; or remand the case to the Commissioner or the Commissioner (Appeals) for making such enquiry or taking such action as the Tribunal may direct. However, under subsection (4) of this section, the Tribunal shall not increase the amount of any assessment or penalty or decrease the amount of any refund unless the taxpayer has been given a reasonable opportunity of showing cause against such increase or decrease, as the case may be. We have found that in the above referred order dated 15-6-2010, the deletion of additions made by the Taxation Officer under section 111 of the Ordinance have been upheld being made in violation of the mandatory provisions of law i.e. section 111(2) of the Ordinance, which cannot be sustained in law. However, in Para 13 regarding the assessment framed by the Taxation Officer, it has specifically been observed that the assessment being illegal has rightly been annulled. In this regard, the observation has also been made that this obviously does not mean that the annulment of the order of the Taxation Officer restrains him from proceeding further for possible additions in relevant tax year as per law and rule in this case keeping in view the provisions of section 111(2) of the Income Tax Ordinance, 2001 after affording reasonable opportunity of being heard to the taxpayer and in this regard reliance has been placed on the earlier decision of this Tribunal reported as 2007 PTD (Trib.) 2153. The learned DR has not pointed out any mistake apparent from the record of the case, therefore, the miscellaneous application filed by the Department is dismissed. C.M.A./104/Tax(Trib.) Application dismissed.