2005 PLP (Trib (PTD)

Shafqat Mehmood Chohan for Applicant. Zulfiqar Ali, D.R. for Respondent. Date of hearing: 3rd August, 2004. Through this miscellaneous application for rectification it has been prayed that, this Tribunal's order, dated 15-1-2004 passed while disposing of I.T.A. No. 5293/LB of 2003 for assessment year, 1996-97 whereby the order under section 66A was remitted back to IAC may be rectified. By this application the attention of this Tribunal has been drawn to the fact that no findings have been recorded on a case-law quoted by the learned AR with a , citation as 2000 PTD (Trib.) 332 which was in support of the arguments that the order passed under section 66-A by the IAC is without any legal sanction behind it. Sections referred to in this order are of Repealed I.T. Ordinance, 1979. The learned A.R. in elaborating it further had submitted that originally the assessment under section 62 was made vide order, dated 15-6-1998 which became the subject of appeal at the first appeal stage. The learned CIT/WT(A) disposed it of vide order, dated 18-11-1998. Thereafter a pre show-cause notice under section 66-A, dated 27-4-2001 was issued, which dealt with the subject-matter of apportionment of expenses among the two sources of income i.e. capital gain and normal business income. The IAC by exercising its powers under section 66-A vide order, dated 21-5-2001 modified the original assessment, dated 15-6-1998 and apportioned the expenses. On this the learned A.R, clarified that I AC on its own has passed an order without referring it for so doing to the Assessing Officer. Now on the new issues subsequently the IAC by the impugned order has again invoked section 66-A and this time the assessment has been set aside by sending it- back to the Assessing Officer, so that the present issues of local Fund investment and foreign investment Fund could be dealt with as per directions given in his order. The learned AR by referring to report judgment 2000 PTD (Trib.) 332, has firstly submitted that this Tribunal failed to adjudicate the arguments advanced which drew the force from this judgment. On the applicability of this reported judgment in the instant case the learned AR submitted that by exercising the powers of modifying the assessment, order has resulted into passing of assessment order by the IAC himself, so after revision the order under section 66-A subsequently the IAC cannot invoke section 66-A against its own assessment. Thus the I.A.C. has become functus officio with no jurisdiction to cancel the assessment by setting aside the same. When the learned AR.'s attention was drawn as to how the Division Bench order which has been not dilated upon in the order passed by the Tribunal can become a ground for rectification, in reply he referred to a larger Bench decision with citation as 1997 PTD (Trib.) 879, from where the force could be drawn for dealing with the exactly identical situation which has now arisen and pointed out in the titled miscellaneous application. The learned DR on the other hand has submitted that this Tribunal is not vested with the powers to review already passed order and secondly simply for typographical error there are no powers to pass any order in such circumstances and finally that his application does not come within the ambit of section

156. We have heard the arguments and have perused the available record. The facts as pointed out by the learned AR are 100% correct. The case-law with citation as 2000 PTD (Trib.) 332 was no doubt quoted without any elaboration as to the applicability, so was omitted to be dilated in the light of the issue involved. Anyhow both the case-law as cited by the learned AR are on all fours with the matter which is to be adjudicated here. Even at the cost of brevity it is to be made the part of findings that here the IAC has firstly modified the already framed assessment and subsequently by the impugned order, the IAC has set aside the already framed assessments after its modification by the IAC which is definitely illegal and have no legs to stand in the eye of law. The IAC after firstly modifying the assessment has lost the authority as well as jurisdiction under section 66-A. The scheme of the law in the; light of the case-law does not approve the subsequent order which is being impugned in this Tribunal. The other case-law quoted with favour by the learned AR has very rightly upheld the following of an order passed by any larger Bench or of the division Bench by another Division Bench seized with the same situation. So, keeping in view discussion supra we deem it quite fair and proper to recall our earlier order in respect of assessment year, 1996-97 only, in I.T.A. No. 5293/LB of 2002 (assessment year, 1996-97) with date of order as 15-1-2004. The findings as recorded by this order will remain in field only for the assessment year, 1997-98 i.e. in respect of I.T.A. No.5294/LB of 2002 (assessment year, 1997-98) with even date. The matter as referred through the titled application is rectifiable under section 156 of the repealed Income Tax Ordinance, 1979, therefore, the C ITAT order supra is rectified by holding that impugned order for assessment year, 1996-97 is beyond the jurisdiction of the IAC thus is illegal void ab initio which merits cancellation thus modification of earlier findings when the matter was remitted back to IAC. The assessment as finalized prior to invoking of section 66-A vide this impugned order, is hereby restored. This miscellaneous application succeeds as indicated above C.M.A./300/Tax (Trib.) Order accordingly