1999 PLP (Trib (PTD)

59(1)/31-1-1995 1995-96 Rs.80-,875-00 59(1)/30-6-1996 1996-97 Rs.89, 709-00 59(1)/30-6-1997 The amount of tax claimed by the assessee by omission was Rs.570, Rs.560, and Rs.690 respectively for the year which even if added in total income would result in much less tax than already paid by the assessee under the provisions of section 80-D. The learned D.R.. however, argued that the deduction of tax under section 50(7-E) has been erroneously allowed by the Assessing Officer and the same has caused damage to the interest of revenue, hence, cancellation is fully justified. We have given-our earnest consideration to the rival arguments. It needs do further discussion that the provision of section 66-A can only be invoked where the two basic ingredients of order being erroneous as well as prejudicial to the interest of revenue are simultaneously found. In the impugned case one thing is obvious that by allowance of an admissible expenditure, an error has been done, whether the same has caused any prejudice to the interest of revenue is the moot point. In the impugned case if we add the inadmissible expenses allowed in the total income of the each year, the tax payable. thereon shall remain still below the amount of tax paid by the assessed under section 80-D which is a mandatory payment for finalization of an assessment under section.59(1). The assessment would not, have been finalized under the provision 59(1) if the liability under section 54 of the Income Tax Ordinance was not paid. The relevant provision of law is reproduced as follows:

"

54. Payment of tax with return of income.

Every person who is required, under this Ordinance to furnish a return of total income shall pay the tax payable, on the basis of such return, on or before the date on which he is so required to furnish such return. Explanation.

For the removal of any doubt, it is declared that the expression 'tax-payable' as used in this section includes the tax under section 80-D." ` One of the important conditions for assessment under Self Assessment Scheme as already discussed and is clear from section 54 is the payment under section:80-D, meaning thereby the tax payable thereon is to be considered for all intents and purposes while making an assessment under section 59 or subsequent reopening under, section 65 or 66-A as the case may be. In the impugned case even after addition in the declared income the amount of inadmissible claim, of taxes paid the income shall remain less than the limit where tax would exceed the amount of tax paid under section 80-D. We, therefore, have no hesitation in holding that it was not a case causing, prejudiced to the interest of revenue. While giving our findings we also have in our mind the provisions of section 54(3) under which the Income Tax Department was entitled to make addition of inadmissible add backs while making an assessment under S.A.S., though the result of the same would have been what we have already adjudicated upon above. As a result thereof, the order of the I.A.C. cancelling the assessment is considered without any legal justification in all the 3 years and the same is, therefore, cancelled. C.M.A./103/Tax(Trib.) Appeal allowed