2004 PLP (Trib (PTD)

(iii) W.T.A. No. 783/LB of 1996, dated 7-8-2002. (iv) W.T.As. Nos.784 to 787, dated, 16-6-2001. The learned A.R. in support of his contention that the provisions of section 17-A(i)(b) are applicable, read out the section. The learned A.R. further submitted that the ITAT decision in W.T.A. No.432/LB of 1994, dated 24-6-2000 has failed to interpret the section 17A ibid in its proper perspective and submitted that this issue has been raised in the Honourable Lahore High Court (Bench Multan) which is pending for adjudication. Converse to this the learned DR supported the order passed by the learned CIT/WT(A) by submitting that limitation in the instant case is not two years as has been held by the learned CIT/WT(A). For a proper understanding the relevant provisions of section 17-A. is reproduced as under:-- "Time limit for completion of assessment and reassessment.--(1) No order of assessment shall be made under section 16 at any time after the expiration of a period of

(a) four years commencing on and from the first day of July, 1981, or two years from the date of the filing of a return or a revised return under section 15, whichever is later, where the assessment year is an assessment year commencing before that date; or (b) four years from the end of assessment year in which the net wealth was first assessable, or two years from the date of furnishing of a return or a revised return under section 15 whichever is later, where the assessment year is an assessment year commencing on or after the first day of July, 1981." Rest of the subsection (2) being not relevant, here is not reproduced here. It is essential to bring on record that Section 17-A was introduced by Finance Ordinance, 1981 for prescribing the time limit for the assessment to be framed under sections 16 and 17 of Wealth Tax Act, 1963. The clause (a) of subsection (i) ibid is dealing with the assessment years commencing prior to first day of July, 1981. whereas in the instant case the assessment years are after the first day of July, 1981, therefore, it is the subsection (i)(b) which is relevant so it is discussed here' but prior to it, it is essential to say also about the subsection (i)(a) ibid. The clause (a) in subsection (1) has significance in the case which at the time of introduction of this section ibid were lying pending with the Assessing Officer, so that firstly these ending assessment shall be finalized till 30-6-1985 and where returns have been filed then within two years from the filing of return, in case such returns have been revised then this period of two years shall be counted from the date of submission of this revised return. The pertinent clause (b) ibid of subsection (i) of section 17A has also specified two categories of the cases one is of return filers where the period of two years which shall be commencing from the date of filing of return has been prescribed for completion of assessment, in case -a revised return is furnished then this period of two years is to be reckoned from the date of submission of this revised return. The time limit prescribed as four years is relevant to the cases where return has not been filed then the limitation period of four years is to be counted from the end of the assessment year in which net wealth was first assessable. The purpose of the Legislature is that Revenue could take action for framing assessment where firstly an assessment has been framed but in the next following four years no action has been taken, by this the Revenue has been empowered to frame assessment without any fear of limitation for these four years, secondly it is dead line with an eventuality where no wealth tax return has been filed, so in such cases the four years from the end of the assessment year in which the net wealth was first assessable the assessment order could be passed. These two eventualities fall within the first complete sentence of clause (b) ending with comma which is again reproduced as under:-- "four years from the end of assessment year in which the net wealth was first assessable." By putting comma after the word "first assessable" a disjunctive has been established and then starting of other sentence with `or' has conveyed the purpose in crystal clear manner that it is altogether dead line with a different category ; which is of wealth tax return filers in whose case the period of limitation is two years, such period is to be reckoned from the date of furnishing of the original return and in case revise return is furnished then from date of filing of this revised return: By the sentence "whichever later" as has appeared in clause (b) ibid it refers to the date of revising of the return. In the, impugned order the learned CIT/WT(A) has relied on IAT order W.T.A. No.432/LB of 1994 (assessment year 1989-90), dated 24-6-2000, the relevant para. relating to interpretation of 'section 17-A(i)(b) is reproduced as under: "We have carefully considered the matter but in our opinion there is no force in the arguments of assessee's AR. The plain reading of law i.e. section 17-A(i)(b) reveals that the time limit prescribed for the purposes of assessment under section 16 is 4 years from the end of the assessment year or two. years from the date of, filing of the return of wealth or revised return whichever is later. The phrase `whichever is later' does not pertain to filing of return under section 14 or revised return under section 15

it pertains to period of 4 years from the end of assessment year or two years from furnishing of return. The intention of Legislature appears to be to provide for a limitation period of 4 years from end of assessment year for completion of assessment under section 16 where the returns are filed in time or delayed up to two years or so and to extent it up to a period of 2 years from the filing of the return or revised return where the returns are filed so late that period of two years falls after the end of the stipulated four years period. The order of CIT(A) -on this behalf is perfectly lawful and no exception can be taken to his decision on this behalf that another CIT(A) for some later years held different view and Department did not file appeal against the same as claimed is immaterial in the concert and should not have any effect on our decision .according to law on this behalf. The views held in the C's WT(A) orders, dated 20-5-1997 and 21-5-1997 are not correct.. Assessee's peal on this count is therefore, rejected." The interpretation as given in para. supra is not tenable for the following reasons:-- (I) That findings in para. supra has lost the reference to the context as has extending the meanings by including entirely different situation which is not evident from the language of section 17(1)(b). (II) That the period of limitation constitute a boundary within which the executors of law should remain so always the meanings or limitation provisions are to be precise and specific without extending/stretching the same as has been done in para. supra. (III) That the provisions of law prescribing the time limitation are to be construed strictly and cannot be stretched beyond the plain language of the specific provisions. (IV) That four years period has been specifically/separately provided by stating that this limitation of four years shall start from the end of the assessment year in which the net wealth was first assessable. So after establishing that what is the first year or assessable wealth that the period of four years is to be counted. This part of clause (b) has simply empowered that wealth tax assessment could be framed for the last five years as is evident from `the corresponding provisions under the income tax law. But in the second situation where the return has been filed then in respect of such cases the assessment has to be framed within two years from the date of filing of this return or revise return which is almost a similar limitation in the inc, !me tax proceedings. (V) That the authority to conduct the wealth tax and income tax proceedings and administer the law are vested in one and the same officer and any discrepancy unearthed in any of the two proceedings have a bearing on the other. So any Niece or information which is utilized in wealth tax could be united also in the income tax proceedings, so without prescribing identical limitation the smooth working is not possible. (VI) The purpose of providing two years limitation for return filers is with the specific intent to encourage law-abiding and, to discourage the delinquency and not to leave the such return filers at the mercy of Assessing Officer for a long time as delay in assessment after filing of return on the one hand results into excessive additional tax and on the other hand assessee could not be made aware of the final tax liability. (VII) The enactment of section ibid is' made with the intent to put a check on the Assessing Officer 'for timely action which is for furthering the cause of justice. The interpretation or section 17(i)(b) in the para. quoted from W.T.A. No.432 ibid is against the spirit of justice and common sense as it has extended the limitation period to six years for two independent provisions of clause (b), because the 2nd category with two years as limitation period has been established as starting of the word "or" with the before it has made it a disjunctive. The wording "whichever is later" is reference to return or revised return enabling the Assessing Officer a time of two years for framing the assessment after submission or filing of return. (VIII) That the purpose of Legislature is not to encourage incompe tency, and slackness, by allowing indefinitely extendable limitation to the tax collectors. By the findings recorded supra we hold that period of limitation in cue where wealth tax return is filed shall be two years and not four I years from the end of assessment year in which the net wealth was first assessable. The order was per incurium. Now coming to the instant case in wealth tax returns date of filing of wealth tax returns is not disputed, so the date of framing of the assessments in respect of assessment years' 1997-98 to 1999-2000 with the returns filing dates for clarity are reproduced as under:-- Assessment year Date of filing Date of assessment order 1997-1998 19-9-1998 29-6-2002 1998-1999 21-6-1998 29-6-1998 1999-2000 13-10-1999 29-6-2002 As is crystal clear from the supra historical data that assessment in all the years supra has been framed after the expiry of two years from the date of filing of returns, so such assessment for all the three years supra are manifestly barred by time, hence, cancelled as being devoid years any legal sanction behind it. Assessment for assessment year 2000-2001: The relief was allowed by the learned CIT(A) in respect of portion of commercial property at Abdali Road is also without any basis which is suffering from the same defects 'which are visible from the assessment order, therefore, order on this point is set aside for de novo proceedings by vacating the orders of both the authorities below with the direction to the Assessing Officer to work out a proper GALV after confronting the same to the assessee. Resultantly the assessee's three appeal for assessment years 1997-98 to 1999-2000 on the point or limitation are accepted with the cancellation/annulling of assessment in all the three years so with this, the appeals filed on behalf for Revenue for assessment years 1997-98 to 1999-2000 being infructuous on annulling of assessment are dismissed. The departmental appeal for the assessment year 2000-2001 succeeds to the extent and in the manner as indicated above. C.M.A./956/Tax (Trib.) Order accordingly