1997 PLP (Trib (PTD)

2. Appeal was preferred against the assessment order and it was agitated that the case qualified for acceptance under section 59 and as such there was no justification in framing assessment under section

62. The additions made under section 13(1)(d) and to the declared income were also agitated in appeal. The appeal was disposed of by the CIT (A) Zone-III, Lahore vide his order dated 12-12-1991 who set it aside with the directions that the case should be disposed of "in accordance with law as warranted by the facts of the case as the assessee's submissions vide letter dated 20-6-1991 had not been considered. The issues of additions under section 3(1)(d) and to the business income were remitted back to the Assessing Authority. Now in appeal against the order of the first Appellate Authority it has been maintained that there was no justification in the setting aside of the order as it was contrary to law and facts.

3. The learned A.R., arguing on behalf of the assessee, maintains that a specific issue regarding the return fulfilling the condition of simplified Assessment Procedure had been raised before the First Appellate Authority and he was not justified in ignoring his ground. He referred to the declaration of the CIT (A) and maintained that this issue has not been specifically dealt with and there was no finding on it. His alternate plea was that the additions made under section 13(1)(d) and in the business income is without any justification. The A.R. maintained that the return filed under the S.A.P. fulfilled all the conditions. Further, the reliance on para. 6 of Circular No.6 of 1988 was not correctly placed as this Circular had been superseded by Circular No. 10 of 1988 dated 22-8-1988. The provision of para. 6 of Circular No. 10 of 1988 were neither applicable nor relevant in case of the assessee. As such it was pleaded that the I.T.O. had wrongly assumed jurisdiction over the case and any subsequent action which included the framing of assessment order under section 62 was void and without any jurisdiction. Explaining his point of view it was maintained that the return filed did not stiffer from any lacunas as prescribed under para. 2 of the SAP for 1988-89 and the return stood presence/accepted under the conditions laid down in para, 5 of the said Circular (No. 10).

4. The learned D.R., opposed the stand taken on behalf of toe assessee and maintained that the return filed was not acceptable under the provisions of S.A.P. for 1988-89. It was maintained that the income tax return had been filed after the due date and the payment of tax under section 54 alongwith the return of income had not been fulfilled. As such when the return itself did not fulfil the conditions of the S.A.P., therefore, the assessee was not entitled to any benefit of the provisions and as such it did not quality for assessment under section 59(b). Based on these submissions the D.R., was of the view that the return had been rightly taken out of the purview of the S.A.P. and order framed under section 62 was warranted according to the merits and facts of the case.

5. We have considered the points of view of the two representatives. We would first dispose of the issue whether the, return qualifies for acceptance under the S.A.P. or not. The assessment order shows that the explanation filed by the assessee and the photocopies of income tax return alongwith the Postal receipt produced before the I.T.O. have been accepted by him. He does not doubt the same. The reasons as per para. 2, however, the assessee was informed that the return of income for the charge year 1988-89 was not qualified to be accepted under Simplified Procedure of Assessment vide para. (6) of Circular No.6 of 1988 wherein it is provided that "assessment will be final unless the Income Tax Department receives or discovers documentary evidence of concealment" of the assessment order the return has been brought within the purview of the Self-Assessment Procedure. In fact the Circular No.6 of 1988 was subsequently superseded by Circular No. 10 of 22-8-1988 para. 6 of the relevant Circular No. 10 states. "6(a). Cases involving a change in status from A.O.P., U.R.F. and H.U.F. to a R.F. or from a R.F. to A.O.P., U.R.F. and H.U.F. would be considered existing assessee unless the name, nature and place of business does not remain the same. (b) The assessment completed under Simplified Procedure for Assessment shall not have any bearing on the earlier assessments pending in appeal."

6. In the light of the above provisions the reliance on para. 6 by the ITO is not correctly placed. Further, if the return filed under S.A.P. suffered from certain mistakes or deficiencies the I.T.O. was obliged under para. 5 of Circular No.10 of 1988 to communicate the assessee the same and provide him a period of 15 days to make up the deficiency. This was nowhere done. In fact the I.T.O. makes the return filed under S.A.P. as the basis of assessment as the income declared Rs.88,281 is considered while computing the total income.

7. The learned D.R., could not controvert the above facts on record i.e., that the return had been incorrectly and illegally taken out of the purview of the S.A.P. for 1988-89, the return filed by the assessee had been accepted and made the basis for the framing of assessment. The CIT (A) in his order mentioned above has nowhere dealt with this specific issue raised I by the assessees nor given his findings. Under the circumstances we find that there was no justification on his part in setting aside the order. The order passed under section 62 is without any jurisdiction and we, therefore, annul it. The Assessing 'Officer is directed to accept the return under S. A. P.

8. The appeal stands disposed of to the manner and extent indicated above. C.M.S./338/Trib. Order accordingly.