2005 PLP (Trib (PTD)

2. The applicant formulates the following questions, statedly, questions of law

(a) (a) Whether a single (combined) notice under section 56 issued for more than one assessment years is incurably defective in spite of the fact that section 56 of Income Tax Ordinance, 1979 does not lay down any such restriction? (b) Whether improper service of a notice is an incurable detect, making the assessment liable to annulment instead of setting aside?

3. The assessee/respondent is not present. The applications will be disposed off on merits.

4. According to the DR, issuance of combined notice under section 56 for multiple assessment years does not warrant annulment and setting aside of the assessments so made by the CIT(A) was consistent with statutory stipulation. It is submitted that where no notice under section 56 has been issued then any assessment framed would not be tenable in law but in the present case, a notice had admittedly been issued and any defect therein with regard to service was curable and fresh assessment proceeding were therefore in order as a remedial measure. In this context, the DR has referred to judgment cited as 39 Tax 30 SC Pak., also reported as 1998 SCMR 91.

5. We have heard the DR and have perused the case-law cited.

6. In our considered judgment, the Tribunal while ordering annulment of assessments proceedings for 1990-91 to 1997-98 in this case has taken cognizance of multiple defects, including defect of a grave nature and the annulment is thus the cumulative result of all these defects. Thus, the Tribunal has held that; (a) Notices under sections 56 and 61 have not been served on the assessee at all nor these notices have been served on someone who has appeared before the Assessing Officer at any stage or on someone who has filed any document at any stage, (b) the single notice under section 56 issued for multiple years, bear evidence of tampering insofar as assessment year, "1996-97" has been altered per force to, assessment year, " 1997-98", and (c) a single notice under section 56 has been issued for eight years. As held on Page-4 of Tribunal's order, after taking cognizance of "all pertinent aspects", the Tribunal has come to the conclusion that the assessments framed under section 63 for 1990-91 to 1997-98 are incurably defective and hence liable to be annulled.

7. Looking at the matter in its entirety, we are satisfied that Tribunal's findings do warrant annulment and the questions as formulated by Revenue do not properly arise from Tribunal's cited order as the issuance of a single notice under section 56 for multiple years is not the only reason given by the Tribunal for annulment. Admittedly, notice under, 56 is required to be issued for the current as well as preceding years for which a new assessee is required to file returns of income where such returns have not been filed by the assessee on his own volition. Previously, notice under section 56 could only be issued for the current assessment year and for previous years notice under section 65 was required to be issued. However, that position has changed and necessary amendment has also been made in the statute. In the present case, there is no cavil with the proposition that notice under section 56 is required to be issued for assessment years 1990-91 to 1997-98. However, in our judgment, just as an assessee is required to file return of income separately for each year so it is that statutory notice should also be issued separately for each year. Thus, where an assessee is required to file returns of income for eight years, the assessee cannot disclose lump sum income for eight years but has to bifurcate his income for each year separately and file separate returns of income on a yearly basis. The law as well as propriety requires that the Assessing Officer, compute income separately for each year even when a `consolidated' order of assessment is passed. By calling on the assessee to file returns for eight years through a single notice followed by notice under section 61 for a similar period, the assessee is caused prejudice insofar as the assessee may feel constrained to explain the income arising in these eight years in a single appearance before the Assessing Officer. Imagine the assessees discomfiture in an "accounts case" where accounts and supporting documentation for many years have to be produced' before the Assessing Officer on a single date for which a combined notice has been issued. This is certainly not what statute contemplates. The text of the statute (section 56 of the repealed Ordinance, 1979)' unequivocally refers to assessment in the `singular'. Nowhere in the statute is "assessment" referred to in the `plural'. We are aware that `singular' may be read as `plural' in certain situations. However, we do not think it appropriate to read the provisions in this manner here.

8. Besides, the observations recorded supra, we have to point out that the multiple assessments made in this case have been held to suffer from a grave infirmity insofar as strong indications of "tampering" have been pointed out by the Tribunal. The department has not filed any Misc. application to contest the Tribunal's finding with regard to such tampering. The Department has also not filed any Misc. application to contest the Tribunal's finding that the single notice under sections 56/61 has not been served on the assessee or on any person who had any connection with the assessee. It would thus appear that the department has accepted the Tribunal's findings on both these aspects. The conclusion is therefore inescapable that given the ambient circumstances referred to Supra, assessments such as have been made in the present case are indeed incurably defective and hence do merit annulment.

9. Reference is rejected. H.B.T./295/Tax (Trib.) Reference rejected.