1986 PLP (Trib (PTD)

(b) Income‑tax Ordinance (XXXI of 1979)‑‑ ‑‑‑Ss. 56 & 62‑‑Assessment‑‑Excisable goods‑‑Estimate of production‑ Assessing Officer estimating production for certain assessment years without giving basis of estimate and arbitrarily applying G.P. rate‑‑Sales reduced, orders of Officers below ‑on point of G.P. rate set aside and case remitted back to Income‑tax Officer with direction that reasonable G.P. rate should be applied in case of assessee as applied in other parallel cases. M. Ramzan Butt for Appellant. M. Arshad Pervaiz, A.C./D.R. for Respondent. Date of hearing: 3rd March, 1985. These are four appeals filed by an A.O.P. deriving income from re‑rolling Mills and relate to assessment years 1977‑78 to 1980‑81.

2. Brief facts of‑the case are that the notice under section 56 was issued to the assessee for all the years under consideration on the basis of which the assessments were framed by the I.‑T.O. on 30‑6‑1983. However, no notice under section 65 was issued and the assessment was framed under section

62. It may be noted that the notice under section 56 for the assessment years 1977‑78 and 1979‑80 was issued on 27‑4‑1981 and for the assessment year 1980‑81 on 25‑5‑1982. The learned counsel contended that without issuing the notices under section 65 the) Assessing Officer was not competent to make the assessment. In this connection he has retied upon the case decided by Tribunal reported as (1984) 48 Tax‑34, on page 39 of the report in similar circumstances the Tribunal observed:‑ "I have no hesitation in holding that without issuing any notice under section 65, the I.T.O. erred in framing assessment for the charge years 1976‑77, 1977‑78 and 1978‑79, similarly, by issuance of notices under section 56 of the Ordinance. All the three assessments being ab initio void are annulled." Respectfully, following the aforesaid authority the assessment for the years 1977‑78 and 1978‑79 are annulled. For the assessee years 1979‑80I and 1980‑81 the assessee's sales have been estimated at Rs.4,00,000 and Rs.8,80,000 respectively applying G.P. rate of 12$ for these two years. It has been contended that the goods produced by the assessee are excisable goods and excise record has been duly maintained by the assessee. The Assessing Officer estimate the production at 80 M. Tons for the assessment year.1979 80 and 160 M. Tons for the assessment year 1980‑81 and arbitrarily applied G.P. rate. 3 On perusal of the order of the I.T.O., I find that no basis for the estimate of productions has been given. At the same time, the contention of the appellant cannot be accepted that the I. T.O. is bound to accept the Excise record. Keeping in view, the above facts, the sales are reduced to Rs.3,50,000 for the assessment year 1979‑80 for a period of six months and RS.7,00,000 for the assessment year 1980‑

81. In regard the G.P. rate the learned counsel has relied upon parallel cases in which G.P. rate of 68 is stated to have, been applied. On this point the orders of the Officers below are set abide and the case is remitted back to the I.T.O. with directions that reasonable G.P. rate should be applied in the case of the assessee as applied in other parallel cases. M.Y.H. Case remanded.