2016 PLP (Trib (PTD)

JAWAID MASOOD TAHIR BHATTI, JUDICIAL MEMBER.--The appellant through this appeal has objected against the impugned order of the learned CIR(A) dated 29.06.2010 on the following grounds:-- "(1) That the impugned amended assessment order passed under section 122(1) of the Income Tax Ordinance, 2001 by the Deputy Commissioner Inland Revenue (Audit-I) as well as by the learned CIR (Appeals) are bad in law and also against the facts of the case. (2) That the selection of case for Audit by the Commissioner is against the provisions of section 177 of the Income Tax Ordinance, 2001 as well as against the principles of Natural Justice. (3) That action of the Taxation Officer to make addition of Rs.407,500 out of Profit and Loss Expenses without issuing any Show Cause Notice in this regard is against the provisions of section 122(9) as well as against the principles of Natural Justice. Hence liable to be declared null and void. (4) That without prejudice to above the add back made by the Taxation Officer at Rs.407,500 out of P&L Expenses without pointing out any specific defect in the Complete Books of Accounts reproduced by the Taxation are liable to be deleted. (5) That without foregoing above contentions, the lumpsum addition of Rs.407,500 made by the Taxation Officer out of P&L Expenses is not justified and against the norms of justice as the same was made without considering the nature and verifiability of each expense Complete Books of accounts such as Cash book, General Ledger. All Expense ledgers along with supporting invoices/vouchers reproduced by the Taxpayer have altogether been ignored by the Taxation Officer. Reply filed by the Taxpayer on 25.02.2010 has also not been considered. Hence the add backs are not tenable. (6) That Amended Assessment Order passed by the Taxation Officer under section 122(5) without having any definite information regarding the income of the taxpayer is against the law: Hence liable to be annulled. (7) That Assessment Order passed under section 122(1) without mentioning specific provision of section 122(5) of the Income Tax Ordinance, 2001 is liable to be declared null and void. (8) That income assessed by the Taxation Officer at Rs.1,195,262 against the declared income of Rs.787,762 without considering the history and facts of the case is not justified.

2. I have heard the learned representatives from both the sides and have also perused the order of the learned CIR(A) and order passed by the Taxation Officer under section 122(1). The learned counsel representing the appellant has agitated the impugned order on the legal as well as on factual grounds. He has contended that the complete books of accounts were furnished and no specific defect has been pointed out in the notice as well as in the impugned order regarding disallowances. He has in this regard placing reliance on the decision reported as 2007 PTD (Trib.) 95 and contended that the stereo type objections have been made basis of disallowances and the disallowances made are without pointing out any defects in the books of accounts which according to Learned A.R. have never been approved by this Tribunal and higher Courts. The learned counsel in this regard further contended that the history of the appellant's case is acceptance of account to the extent of disallowances and never in the past any disallowances were made. He has further contended that the lump sum addition made in the profit and loss account have never been approved by this Tribunal and by the Honourable Higher Courts and up to now it is settled that each head of account to be confronted and discussed. He has contended that once the CIR(A) has come to conclusion that the disallowances have not been made in proper and judicious manner then there was no justification for remanding back the matter to the Taxation Officer as that should have been deleted.

3. On the other hand learned DR is supporting the impugned order of the officers below and he has contended that the dis-allowances have been made after confronting the appellant and the learned CIR(A) should have upheld the treatment meted out by the Taxation Officer.

4. After considering the rival arguments and perusal of the record of the case, I am of the view that the Taxation Officer has made the disallowances without properly confronting the assessee and giving specific reasons for making the disallowances and the learned CIR(A) has also remanded back the matter without any justification, as once he has come to conclusion, that the disallowances have not been made in a proper and judicious manner he should have deleted the disallowances instead of remanding the matter back to the Taxation Officer. In view of these facts and circumstances of the case the disallowance made by the Taxation Officer are deleted and the appeal filed by the appellant is allowed. HBT/154/Tax(Trib.) Appeal allowed.