1997 PLP 1829 (PTD)

MIAN SHAKIRULLAH JAN, J.

The petitioner's, an Income Tax assessee, grievance commenced when he received a show-cause notice dated 12-3-1995 for action under section 65 of the Income Tax Ordinance, 1979 (hereinafter referred to as the Ordinance) for the assessment year 1993-94 whereby he was asked to explain the investment of Rs.5,50,000 which has been made by him for the purchase of a plot as his Income Tax returns for the previous years were not showing that the petitioner would be in possession of such an amount. The petitioner replied the same vide his reply dated 30-3-1995 and justified the investment by showing the sale of plot at Lakki for consideration of Rs.3,00,000 in the year, 1992. The respondent, the income Tax Department, further taking notice of the selling of the plot for the price of Rs.3,00,000 asked the petitioner, as the same has also not been shown in the previous returns, also to explain the same and thus consequently the notice under section 65 of the Ordinance was issued to him on the ground of escapement of the amount invested for the purchase of the plot and could not be accounted for in view of his returns submitted by him earlier. The respondent department has also submitted comments to the writ petition and, in addition to the preliminary objection with regard to the maintainability of the writ petition on the ground of alternate remedy in the form of appeal, revision and reference and particularly when the Income Tax return has been filed in compliance with the notice issued under section 65 of the Ordinance, tend to justify the action under the Ordinance. The petitioner. though, submitted the rejoinder but except with regard to the preliminary objection of incompetency of the writ petition on the ground of availability of other adequate remedies, no other point was taken in the comments except by mentioning therein that the same will be argued at the time of hearing of the writ petition. One of the grounds of the petitioner it the writ petition is that the case cannot be re-opened merely on the change of opinion which according to the petitioner has been done in the instant case.

2. By making a reference to the comments of the respondent it is found that in para 6 thereto, like in the previous notices, a comparison has beer made of the income of the petitioner in view of his returns submitted fog different years and an amount of ks.2,85,141 was found unexplained (because of the accretion) and this is because of the inclusion of the purchase of the plot for Rs.5,50,000 in the wealth statement filed with the Income Tax return. According to section 13(1)(aa) the unexplained investments etc. be deemed to be income of the assessee and it is the case of the respondent department that being an income was assessed as such and that it was also the unexplained investment and such an unexplained income justifies the issuance of the notice under section 65 of the Ordinance. It is not the case of the petitioner that the amount shown in the show-cause notice/notice under section 65 of the Ordinance is the result of miscalculation but what his stand is that he has mentioned in his wealth statement the purchase of the said plot for the amount mentioned therein and after making of an assessment on the basis of Income Tax return for the concerned year the same cannot be reopened and no notice under section 65 of the Ordinance can be issued Another important aspect of the case is, as it seems from the record of the writ petition, that for the first time in reply to the notice, the petitioner ha; alleged the sale of a plot for Rs.3,00,000 justifying the investment of amount in the purchase of the plot for Rs.5,50,000 and this new phenomena being brought to the file of the Income Tax of the petitioner for the first time further makes the case of the petitioner amenable for further scrutiny of the Income Tax Department and justifying the reopening of the case and specially when, according to the respondent-department, the said transaction of sale of a plot is based only on unregistered deed without showing it previously in the returns. The comments also revealed that the petitioner has filed the return in consequence of the notice issued to him under section 65 of the Ordinance. This is not a case of mere change of an opinion and also not of the absence of a definite information as the facts are not in dispute but is a case simpliciter of unexplained income which has escaped assessment and its scrutiny and reopening is further justified by the stand taken by the petitioner for the first time in his reply to the notices and also in the writ petition by stating, that the investment made for the purchase of the plot was obtained by the petitioner from the sale of his plot at Lakki for Rs.3,00,000 which had not been previously mentioned in his returns. The judgments referred to by the learned counsel for the petitioner in his rejoinder are Usmania Glass Sheet Factory v. Sales Tax Officer PLD 1971 SC 205, Premier Cloth Mills Ltd. v. Sales Tax Officer 1972 SCMR 257, Edil Dinshaw Ltd. v. Income Tax Officer PLD 1990 SC 399, Nagina Silk Mills Ltd. v. Income tax Officer PLD 1963 SC 322 and Sheikh Akhtar Ali v. Federation of Pakistan 1995 PTD 268 while on the other hand the learned counsel for the respondents relied on the judgments reported as I.T.O. v. M/s Chapple Builders Ltd. (1993 SCMR 1108), The Commissioner of Income Tax etc. v. M.S.N.V. Philip's Gloeellampenfabriaken PLD 1993 SC 434 = 1993 PTD 865, Commissioner of Income Tax, Companies-II and another v. Hamdard Dawakhana (Waqf), Karachi PLD 192 SC 847, Messrs Sameer Electronics v. Assistant Commissioner of Income Tax, Circle-10 Zone ' A' Lahore 1996 PTD 36, Admajee Insurance Company Ltd. v. Pakistan through the Secretary to Government of Pakistan in the Ministry of Finance, Islamabad, etc. 1993 SCMR 1798 Alahram Builders (Pvt.) Ltd., v. Income Tax Appellate Tribunal 1992 PTD 1671 = 1993 SCMR 29 and on an unreported judgment dated 19-3-1996 of the Supreme Court of Pakistan in Civil Petitions Nos. 1229 and 1230-L of 1995 M/s. Grays of Cambridge (Pak) Ltd. Sialkot v.

1. The Deputy Commissioner of Income Tax, Circle 01, Sialkot.

2. Central Board of Revenue, Islamabad.

3. The authorities produced on both sides, mainly on the point of maintainability of the writ petition in view of the availability of other adequate remedies, by going through these judgments it becomes clear that the proper course, in view of the facts and circumstances of the present case, would be to allow the respondent-department to proceed with the case with all the remedies available to the petitioner under the statute to challenge the findings of the Income Tax Officer through appeal, revision or reference.

4. Consequently, this writ petition has got no force is dismissed as such. No order as to costs. M.S./2135/P Petition dismissed.