2012 PLP (Trib (PTD)

The titled wealth tax appeals have been filed by the Revenue against order dated 29-4-2009 relating to the assessment years 1999-2000 and 2000-2001.

2. Brief facts giving rise to the present appeals are that the wealth tax assessments for the years 1999-2000 and 2000-2001 were originally finalized under section 16(3) of the repealed Wealth Tax Act, 1963 at net wealth of Rs.1,500,000 and Rs.3,000,

000. Subsequently the original assessment were found to be erroneous in so far as prejudicial to the interest of Revenue and reassessments were finalized under section 17B of the repealed Wealth Tax Act at net wealth of Rs.4,239,980 and Rs.4,244,080 for the years 1999-2000 and 2000-2001 respectively. The assessee being aggrieved went in appeal before the learned first appellate authority who cancelled the wealth tax assessments after finding that the Additional Commissioner of Income Tax was not legally competent to pass the impugned wealth tax order under section 17B of the repealed Wealth Tax Act.

3. The learned DR has contended that CWT(A) was not justified to cancel the order passed under section 17B of the repealed Wealth Tax Act, 1963 and to hold that the Additional Commissioner of Income Tax was not legally competent to pass an order under section 17-B of the Wealth Tax Act. The learned AR, on the other hand, has supported the order passed by the CWT(A) for the reasons stated therein. Further more he has also produced a copy of the order of this Tribunal dated 7-6-2009 in W.T.As. Nos.94 to 99/LB/2008 for the property subject to wealth tax in the present appeals wherein this Tribunal has held as under:-- "On the other hand, the learned counsel representing the assessee has contended that the property on the basis of which the wealth tax has been imposed is not owned by the assessee in this case but is owned by Messrs Haji Abdul Majeed and Co. and it was separately assessed in their hands. Evidence in this regard was furnished before the Assessing Officer as well as before the learned CIT(A) and the Assessing Officer has ignored that evidence while the learned CWT(A) on the basis of that evidence has annulled the order passed by the Assessing Officer. The learned counsel has placed before us the sale deed showing Plots Nos. 52 to 55 purchased by Ms. Abdul Majeed Khan and Co. on 18-8-1972. The learned counsel has also placed before us the assessment order in the case of M. Haji Abdul Majeed and Co. regarding properties bearing Nos. 53-55-N, Gulberg-II, Lahore and the return filed by the assessee. Considering all these documents we are of the view that the learned CWT(A) has rightly annulled the order passed by the Assessing Officer.

4. Arguments heard. Record perused.

5. We have observed that authority of learned Additional Commissioner of Income Tax to pass order under wealth tax Act was challenged by the assessee before CIT/WT(A) as the order under section 17B of Wealth Tax Act, 1963 was passed by Additional Commissioner of Income Tax (Audit-IV) Audit Division II, RTO Lahore and learned CWT(A) has cancelled the order for the reason that Additional Commissioner of Income Tax was not legally competent to pass the impugned wealth tax order under section 17B of the repealed Wealth Tax Act.

6. It is a well settled principle of law that "he who asserts must prove". The Revenue has filed appeal and contended that learned Additional Commissioner of Income Tax was competent to pass order under Wealth Tax Act but the appellant has neither specifically taken this ground in the memo. of appeal nor annexed any document to show that Additional Commissioner of Income Tax was also appointed and authorized under section 9 of Wealth Tax Act to decide the cases under Wealth Tax Act. On the last date of hearing i.e. 24-2-2009 when the learned DR was confronted with this situation he sought adjournment in order to produce the documents showing power of learned Additional Commissioner to pass order under Wealth Tax Act or to prove that he was also appointed as Wealth Tax Authority or was competent to act as such. But on the final date of hearing he has miserably failed to furnish any evidence regarding the same. While deciding a similar question i.e. "whether the assessment under Wealth Tax Act could only be made by a Deputy Commissioner appointed as Deputy Commissioner Wealth Tax under section 9 of the Wealth Tax Act and that assessment made by a Taxation Officer who was appointed under section 208 of the Income Tax Ordinance which includes Deputy Commissioner shall not automatically be construed or taken to be a Deputy Commissioner under the Wealth Tax Act" in the case titled "Haji Naseem-ur-Rehman v. CIT/WT etc." cited as 2009 PTD

164. Honourable Peshawar High Court has observed as under:-- "(7) We cannot agree with the contentions of learned counsel for the respondents on the short ground that subsection (2) of section 2 of the Wealth Tax Act will only be applicable if there is no express definition but where the Deputy Commissioner has been defined in both the Statutes, this subsection could not help him. (8) We have gone through section 45A of the Wealth Tax Act. It caters for a situation where there is defect, omission or mistake but in the form of assessment and it does not validate or confer jurisdiction. (9) The judgment cited and relied upon is also not helpful to the respondents because in that case assessments of the Wealth Tax were made though in some cases by the Taxation Officer appointed under the Income Tax Ordinance but as the Wealth Tax Act was repealed, therefore, instead of appointing Deputy Commissioner Wealth Tax, an additional authority was given to the Taxation Officers for making assessment of Wealth Tax. (10) In the present case we repeatedly asked learned counsel for the respondent about any document showing that Taxation Officers of the Income Tax were given additional authority to act as Deputy Commissioner under the Wealth Tax Act which he could not. (11) Where under the two laws, mentioned above, the legislature has expressly defined the term "Deputy Commissioner" differently i.e. under the Wealth Tax Act it is the Deputy Commissioner as defined in section 2(1) and appointment is made under section 9 of the Wealth Tax Act whereas Deputy Commissioner Income Tax as Taxation Officer is defined under section 2 Clause (65) of the Income Tax Ordinance and appointment is made under section 208 of the Ordinance ibid. In absence of any express authorization the Taxation Officer also to act as Deputy Commissioner Wealth Tax, the order would be without jurisdiction. We therefore, allow this appeal and answer the question by holding affirmatively that Taxation Officer shall not have assessed the appellant for the Wealth Tax but it should have been a Deputy Commissioner appointed under the Wealth Tax Act. The result would be that matter shall go back before the appropriate authority as held above for proceedings in accordance with law." It also needs mention that the view taken by their Lordship in the case referred to above has been affirmed by the honourable Supreme Court of Pakistan.

7. Learned DR has relied on the case cited as 98 Tax 5 titled CIT Zone C, Lahore v. Muhammad Alamgir. In that case honourable Lahore High Court held that misquotation of designation does not vitiate the assessment and such a mistake is protected under section 45A of Wealth Tax Act, 1963. For sake of convenience section 45A of Wealth Tax Act, 1963 and the relevant portion of the judgment is reproduced below:- Section 45-A "No assessment order, notice, warrant or other document made, issued or exercised or purporting to be made, issued or executed under this Act shall be void or otherwise inoperative merely for want of form, or for a mistake, defect or omission therein, if such want of form, or mistake, defect or omission is not of a substantial nature prejudicially affecting an assessee."

15. Above discussion makes it clear that up to 30-6-2001 there was no need of appointing fresh authorities as the whole law as well as the officers appointed earlier under Wealth Tax Act, 1963, continued to enjoy the appointment and jurisdiction made and assigned earlier. The charge during this period if any would be administrative. In this situation if wealth tax officer is made a 'taxation officer' in addition to his earlier assignments mere use of the one of the two or both of the connotations shall not vitiate an assessment. In such like situation, the provision of section 45(A) can become fully applicable. Mere mentioning of another connotation in addition to the wealth tax officer or D.C.I.T. of Wealth Tax or the appropriate authority have mentioned a wrong nomenclature though otherwise had full jurisdiction to assess the wealth of an assessee obviously does not cause any substantial harm to the assessee." "

17. The outcome of the above discussion therefore, is obvious. Since in all these cases the assessments have been framed by wealth tax officer who inter alia had the powers to decide the cases of income tax as well, as a taxation officer under the Income Tax Ordinance, 1979, or in some cases Income Tax Ordinance, 2001, there is no substantial prejudice caused to the taxpayer. The Assessing Officer under the Wealth Tax Act, therefore, had full jurisdiction and had rightly made the assessment after acquiring jurisdiction."

8. In the present case learned Officer who passed the original order has mentioned his designation as Additional Commissioner of Income Tax. Revenue has failed to prove that the Additional Commissioner of Income Tax was given additional authority to act as Deputy Commissioner under the Wealth Tax, 1963 or was ever assigned such jurisdiction prior to 1-7-2003. In our view it is neither a case of mere mentioning of another connotation in addition to Wealth Tax Officer or Deputy Commissioner of Wealth Tax nor misquotation of designation, therefore, case cited as 1998 Tax 5 is not applicable on the facts of the case. In the circumstances we have no option but to affirm the findings of learned CWT(A) who has rightly held that Additional Commissioner of Income Tax was not legally competent to pass the order under section 17B of the repealed Wealth Tax Act. The appeals filed by the Revenue are dismissed being devoid of merit. C.M.A./49/Tax(Trib.) Appeals dismissed.