2025 PLP (Trib (PTD)

This appeal has been filed by the Taxpayer against the Impugned assessment order dated 29.05.2024 recorded by the learned ACIR, Lahore.

2. Succinctly facts of the case are that the Taxpayer, an individual, filed income tax return to declare income from salary and practice receipts as a physician which was deemed to be an assessment order under section 120(1). The learned Additional Commissioner considered the deemed assessment order to be erroneous in so far as prejudicial to the interest of revenue and required documents in support of assets declared in the wealth statement. On failure of Taxpayer to produce documentary evidence the learned Additional Commissioner made additions of the assets declared in the wealth statement under section

111. This has brought the Taxpayer in appeal before this forum.

3. Case was fixed for hearing by issuing notices in response to which learned AR represented the taxpayer, and the learned DR represented the Department. The learned AR made the following submissions:- i) Notices were issued on IRIS and no notice was issued by post. The Taxpayer remained unaware of the proceedings as he is not well versed with computer. He also did not receive any SMS in this regard. ii) The learned Additional Commissioner was not justified in initiating, proceedings under section 122(5A) without meeting the pre-requisites of section 122(5A) i.e. proof of erroneousness and prejudice to the interest of revenue. iii) The learned Additional Commissioner issued show-cause notice under section 122(5A) without mentioning any discrepancy in the wealth statement or reconciliation statement. iv) Without prejudice to the above he produced documentary evidence in support of assets declared in the wealth statement as follows:- Detail of voluntary Declaration of Domestic Assets Detail of foreign Remittance Period 01.07.2017 to 30.06.2018 Tax Year 2018 Sr. No. Date Amount of Remittance 1 21/12/2017 5,513,593.31 2 26/12/2017 4,963,121.34 3 04/01/2018 4,412,418.60 4 05/03/2018 5,496,414.50 5 15/03/2018 4,942,498.46 Total 25.328.046.21 Payment of income tax paid under section 236K for value of Rs.25,275,000/- and tax paid at Rs. 1,011,000/-. He contended that the assets declared in wealth statement were duly reconciled and their sources were also explainable, therefore, the learned Additional Commissioner was not justified in making the additions under section 111.

4. He further contended that the learned Additional Commissioner was also not justified in making additions without issuance of specific notice under section 111 without first concluding proceedings under section 111 before issuance of show-cause notice under section 122(9). He prayed for vacating the order of the learned Additional Commissioner being illegal and against the facts of the case.

5. The learned DR contended that the Taxpayer had failed to produce documentary evidence before the learned Additional Commissioner, therefore, additions under section 111 were made lawfully, therefore, order of the learned Additional Commissioner may be upheld.

6. We have considered the arguments and perused the record. We agree with the learned AR that the learned Additional Commissioner was not justified in initiating proceedings mere on the ground that the deemed order was erroneous in so far as prejudicial to the interest of revenue as certain discrepancies were found in the wealth statement when he had failed to point out any discrepancy. He was also not justified in issuance of notices through IRIS without receiving acknowledgment through e-Mail and acknowledgement due by post. He passed the order under section 122(5A) without considering voluntarily Declaration of Domestic Assets. He also failed to examine the income record of the Taxpayer from the FBR Portal which contained information about payment of income tax under section 236K on purchase of the property purchase of which stood duly reconciled with the sources.

7. In view of the above stated facts and law we are of the considered opinion that the order passed by the learned Additional Commissioner is illegal and against the facts of the case, therefore, is liable to be vacated, hence, the order of the learned Additional Commissioner is cancelled.

8. The appeal filed by the Taxpayer succeeds. MQ/1/Tax(Trib) Appeal allowed.