1987 PLP 611 (PTD)

This petition under Article 199 of the Constitution of Islamic Republic of Pakistan is directed against orders dated 16-10-1985 and dated 24-6-1986 respectively passed by respondents Nos.1 and

2. The facts necessary for the purposes of this petition briefly stated are that or, 13-6-1985 respondent No.l issued a notice to the petitioner under section 65 of the Income-tax Ordinance that in the -turn for the assessment year 1981-82 the petitioner had failed to 1ccou-nt for certain assets which had been acquired by him during that year. The assets allegedly not declared consist of property or plot No.11-D/1 Gulberg III, Lahore. After issuing the aforementioned notice the Income-tax Officer by his order dated 16-10-1985 found that the aforementioned property which he valued at Rs.5,64,960 having not been declared in the return, addition of the aforesaid amount has to be made in the income already assessed as provided by section 13(1)(b) of the Income-Tax Ordinance 1979. Feeling aggrieved of this order of the Income-Tax Officer the petitioner preferred a revision before the Commissioner, Income-Tax Central Zone, Lahore, which was rejected 'by the learned Commissioner by his order dated 24-6-1986. Hence the present petition. The learned counsel for the petitioner has raised the following two contentions.

1. That the impugned order of assessment having been passed by the Income-Tax Officer without notice to the petitioner is violative of law.

2. That the forums below did not take into consideration the material available on record which was sufficient to establish that the property value of which had been added in the income already assessed was Benami in the name of the petitioner and the real owner thereof was the P & B Treading Company Limited of which the petitioner is a Director. He in this regard referred to Annexure "C" to the rejoinder filed by the petitioner which a letter addressed by Sarwar Awan & company, Chartered Accountants, on behalf of the petitioner to the Income-tax officer wherein the plea of petitioner being a Benamidar had been raised and in support of the above plea an award of the arbitrator stated to have been made rule of the Court holding that the property was Benami held by the petitioner and the real owner thereof was the aforementioned company was also annexed. The learned counsel has urged that these documents have not been taken into consideration by any of the two respondents.

3. The learned counsel for the Department, on the other hand, contended that the Income-Tax Officer passed the impugned order after due notice to the petitioner as is apparent from the tenure of the order itself but the petitioner is ignored to appear before the Income-Tax Officer despite opportunities having been afforded to him. The learned counsel also submitted that on 6-8-1986 he had shown to the Court some record of the Department to establish that notice under section 65 of the Income-tax Ordinance was served on the petitioner. An affidavit of a Process Server of the Department was also placed on record to show that the petitioner had due notice of the proceedings initiated after notice aforementioned. It was also urged by him that till date the petitioner has not filed any rebuttal to the affidavit of the Process Server.

4. As regards the second contention of the learned counsel for the petitioner, the learned counsel for the respondents submitted that the orders had been passed by the respondents with due application of mind and b; adverting to the record. He in support of his above contention referred to the last para of the order of the learned Commissioner.

5. I have given anxious consideration to the controversy. I am of the view that the contention raised on behalf of the petitioner that tile Income-Tax Officer passed the impugned order without notice to the petitioner has no force. It has been abundantly shown that the petitioner had been duly served with the notices and was given repeated opportunities to show cause against the same, but he chose to absent himself. The first contention of the learned counsel for the petitioner, therefore, fails.

6. I am, however, of the view that the second contention raised on behalf of the petitioner has some force. In the order of the income-tax Officer, there is no reference to the documents, which per Annexure "C" to the rejoinder had been submitted by the petitioner before the order was passed by the former. Similarly, the order of the learned Commissioner of Income-tax also does not show that the matter had been adverted to with a conscious mind about these documents being on record. The orders of the Tribunals of exclusive jurisdiction can be held valid and lawful only if these have been passed with due application of mind and on proper appreciation of the material available on record. Now as to whether the property, value of which has been added in the income assessed for the year in dispute, was in the ownership of the petitioner or not could be effectively and judiciously decided by taking into consideration, inter alia, the documents, referred to above on behalf of the petitioner. The documents admittedly were on record at the time the order was passed by the Commissioner and this point laving been made grievance of that the Income--tax officer had coot adverted to these documents while passing the assessment order under section 65 of tile Ordinance, it was obligatory on the learned Commissioner to have adverted to them before deciding the controversy.

7. The learned counsel for the Department when confronted with the above position that these documents have nowhere been referred to by the Commissioner had to submit that the proper course in that case would be that the Commissioner should re-examine the matter.

8. In view of the foregoing I would allow this petition and declare that the order of the learned Commissioner dated 24-6-1986 has been passed without lawful authority. The result would be that the revision of the petitioner against order of the Income-tax Officer dated 16-10-1985 remain pending and shall be decided by him afresh in accordance with law. Parties shall bear their own costs. M.B.A./P-17/L, Petition accepted.