2005 PLP (Trib (PTD)

MRS. ABIDA ALI (ACCOUNTANT MEMBER). ‑‑‑These seven wealth tax appeals at the instance of assessee have been filed against the combined order, dated 26‑6‑2001 of the learned CIT(A‑1), Peshawar wherein combined assessment orders under section 16(3) of the Wealth Tax Act, 1963 hereinafter called the Act) for assessment years, 1994‑95 to 1998‑99 and combined assessment order under section 16(3) of the Act (erroneously mentioned as under section 35 of the Act in the order of learned CIT(A) were set‑aside.

2. The common grounds on which these orders have been agitated is that mandatory provision for finalization of assessments was not adopted as notice under section 16(2) was not issued/served upon the appellant.

3. Brief facts of the case are that appellant is a director in Arzoo Industries (Pvt.) Ltd., Gadoon Amazai. For assessment years, 1994‑95 to 1998‑99 assessments were finalized as under:‑‑ 1994‑95 1995‑96 1996‑97 1997‑98 1998‑99 Net Wealth assd. 31,85,000 36,85,000 37,17,000 47,35,000 47,43,

300. However, these orders were cancelled on the grounds that value of shares should be assessed at breakup value instead of face value. Accordingly, notice under section 16(3) of the Act was issued and served upon assessee/appellant. Satisfactory reply was not submitted, therefore, re‑assessment was made by adopting breakup value of shares held by appellant.

4. For assessment years, 1999‑2000 and 2000‑2001, the declared wealth was not accepted and value of shares held by the appellant in Arzoo Industries were adopted at Rs.1,04,98,750 and Rs.1,12,71,500 on the basis of breakup value.

5. On appeal before the learned CIT(A) it was contended by the appellant that an opportunity of being heard was not provided to her as notice under section 16(2) of the Act was not issued for the years under appeals. The learned CIT(A) set aside the orders of Assessing Officer with directions that proper opportunity of being heard should be given to appellant before finalization of assessments. Still aggrieved by the impugned order, the present appeals were filed by appellant before this forum.

7. The learned counsel Mr. Aamir laved ACA vehemently contended that since the DCWT failed to fulfil the mandatory provisions of section 16(2) of the Act for finalization of assessment, therefore, the proceedings up to finalization of assessment order are void ab initio and liable to cancellation. In support of his contention he cited the following case law:‑‑ 1. 1995 PTD 1239. 2. 1971 SCMR 681. 3. 2002 PTD (Trib.) 272.

8. After examination of assessment record, we found this plea of appellant to be correct that no notice under section 16(2) of the Act had been issued/served upon appellant. In the light of above cited case law, we are of the firm opinion that issuance of notice under section 16(2) before finalization of assessment is a mandatory provision of law and by not fulfilling the same, all the assessment proceedings are illegal. Accordingly, we accept all the appeals of the appellant, the order of the learned CIT(A) is vacated 'and the assessment orders stand cancelled. C.M.A./357/Tax (Trib.) Appeals accepted.