2004 PLP 2228 (PTD)

5. Dr. Khalid Malik (D‑CIT) appearing for the Revenue submitted that the absence of the Complainant from‑today's hearing confirms the genuine desire to withdraw the complaint which is the reason why they have filed a letter of withdrawal and are not pursuing the complaint.

6. A scrutiny of record, however, reveals that proceedings are beset with illegality and betray flagrant disregard of law, rules and procedure not only by the Assessing Officer alone but also by those who gave approval for "agreed" assessment and now submitted the comments. Although separate notices under section 56 for the assessment years 1997‑98 to 2002‑2003 were issued on 3‑4‑2003, no returns were filed, nor were insisted upon. In this situation, when Returns were not filed, the assessments should have been framed ex parte and penalty proceedings initiated for default of statutory notices [this has been, done]. Combined Notice, dated 5‑5‑2003 under section 61 of the repealed Ordinance for the years 1997‑98 to 2002‑2003 was issued for 12‑5‑2003. This was followed by combined notice under section 62 on 17‑5‑2003 together with notice under section 13 for the assessment years for only 1997‑98 and 1998‑99 for hearing on 22‑5‑2003, when the matter partly discussed. (No conclusion is. recorded). As per order‑sheet, dated 30‑5‑2003 (by the Taxation Officer) the Members of AOP offered for an "agreed assessment" for Assessment Year, 1997‑98 at a net Income Rs.916,363, This was accepted subject to payment of tax (ii) approved by higher authorities and (iii) proceeding for Assessment year, 1998‑99 to 2002‑2003 were filed. This agreement is signed by the CIT, the IAC, the Complainant and his A.R. The concluding para. of the footnote to the assessment order, dated 30‑5‑2003 reads as under:‑‑ "During the course of assessment proceedings the assessee and his A.R. did not contest for the rejection of their account and declared version and offered to be assessed at net income of Rs.916,

363. The offer is reasonable and accepted". (here underlined for emphasis) What is surprising is that there was neither any `declared version' nor any "accounts" were presented because admittedly no Returns were filed. Obviously proceedings were finalized without any legal sanction. That precisely is the reason why on the very next day of the "agreement", the complainant approached this Secretariat alleging that all proceedings by the Taxation Officer were contrary to law, arbitrary, based on irrelevant grounds, involving exercise of powers for improper motives which tantamounts to administrative excesses.

8. It also needs specific mention that the record has been haphazardly maintained with no separate cover for assessment order/ IT‑30 (ete). The order‑sheet also not been recorded from day‑to‑day.

9. In the aforementioned background, letter, dated 21‑7‑2002 (filed before the date of hearing) requesting that the complaint may be treated as withdrawn, does not appear to have been filed voluntarily and without undue pressure from the concerned tax functionaries' who obviously have a clear motive to cover up the illegalities committed in the assessment process. It is, therefore, Recommended that:‑‑ (i) The C.B.R. may call for and examine the record to take requisite action, including possibility of an independent Audit in the present case‑ (ii) The `tax functionaries' responsible for the above noted discrepancies be asked to explain their conduct‑for suitable departmental action.

9. Compliance be reported within 30 days of the receipt of this Order. C.M.A./124/FTO Order accordingly.