2005 PLP (Trib (PTD)

This appeal by Revenue arises out of order passed by the CIT(A) and it is the departmental contention that the CIT(A) has unjustifiably cancelled the assessment order for 1994-95 passed under A section 62/118D of the Income Tax Ordinance, 1979 (since repealed), dated 29-3-1995 by wrongly treating it as rectified assessment order under section 156.

2. It is the departmental contention that in fact the Assessing Officer had made no rectification of the assessment order and tax under section 80-D had been correctly charged in the assessment order on the B declared turnover. According to the DR, the same CIT(A) who had passed appellate order, dated 12-5-1996 in assessee's appeal had himself earlier held in his Order No.1008, dated 31-12-1995 in the case of Messrs Nishat Mills Limited, NTN-31-52-3353042, that tax under section 80-D was to be calculated with reference to export sales "inclusive" of export rebate and duty drawback and now in the case of the present assessee the same CIT(A) had taken a summersault and says that the turnover tax under section 80-D be charged with reference to export sales "exclusive" of export rebate under section 50(5A).

2. AR of assessee/respondent says that under the law turnover tax under section 80-D, is required to be charged with reference to declared sales and export rebate/duty drawback did not form part of such sales.

3. We have heard both sides and have examined the available record and in our considered judgment, the assessee-Company has not filed any appeal against the assessment for 1994-95 under sections 62/118D, dated 29-3-1995 in which turnover tax under section 80-D has apparently been levied with reference to declare sales of Rs.79,613,

748. Another order for 1994-95.passed under section 156, dated 25-2-1996 is obtaining on record in which the Assessing Officer has allowed credit to the assessee for tax paid under section 50(5A) aggregating Rs.361,696 and resultantly revised calculation of additional tax under section 88 was made at Rs.8623 wrongly determined earlier at Rs.39273 after giving effect of tax deduction under section 50(5A) not given earlier. The present appeal has been instituted on 30-10-1996 against this order under section 156, dated 25-2-1996 that was apparently communicated to the assessee on 2-9-1996.

4. It is the assessee's submission before the CIT(A) that the export rebate allowed to the assessee under section 50(5A) did not form part of declared sales and was included in the cost of sales in the books of accounts of the assessee.

5. If that be the position then we fail to understand how the Assessing Officer has erred in charging tax under section 80-D as per the assessment order under sections 62/118D, dated 29-3-1995 because in this order tax under section 80-D has been charged with reference to sales as declared by the assessee and the assessee having not included export sales in the declared export sales (as per the assessee's own statement) but rather having adjusted the same in the cost of sales separately, the assessee's objection in appeal before the Tribunal to the treatment as accorded by the Assessing Officer with regard to tax charged under section 80-D would appear to be misconceived and the subsequent order under section 156 passed to give credit for tax deducted under section 50(5A) and to re-calculate additional tax under section 88 would appear to have nothing to do with the quantum of tax payable under section 80-D.

6. The CIT(A) has apparently cancelled the order under section 156 for 1994-95 and not the order under sections 62/118D as contended by Revenue in Grounds of appeal filed prima facie, the Department has misconceived the factual position with 'regard to order passed by the CIT(A). At the same time we are constrained to observe that there appears to be no justification for the CIT(A) to cancel the order under section 156 for 1994-95 as that order has nothing whatsoever to do with the tax charged under section 80-D and the tax under section 80-D has been correctly charged in the order under sections 62/118D with reference to assessee's declared sales in which export rebate/duty drawback is not included as per the assessee's own statement.

7. In view of the overall confusion in this case, we deem it expedient to vacate the order of the CIT(A) and remand matter back to the First Appellate Authority for de nove adjudication, strictly in accordance with law. The CIT(A) will pass a speaking order, strictly with reference to the Grounds raised by the assessee in its appeal. The CIT(A) will keep in mind that no appeal has been filed by the assessee--Company against the order for 1994-95 under sections 62/118D, dated 29-3-1995 and it is not open to the assessee-Company to take up matters arising in the assessment order under sections 62/118D through an D appeal against the order under section 156 which apparently deals only with the credit to be allowed for deduction of tax under section 50(5A) and liability under section 88.

8. Resultantly, the appeal is disposed of as above. H.B.T./459/Tax (Trib.) Order accordingly.