2004 PLP (Trib (PTD)

15‑6‑1994 14‑6‑1996 30‑6‑1997 1994‑95 28‑12‑1994 27‑12‑1996 30‑6‑1997 1996‑97 13‑1‑1997 12‑1‑1999 30‑6‑2400 1997‑98 31‑12‑1997 30‑12‑1997 16‑6‑2001 1998‑99 31‑12‑1998 30‑12‑2000 16‑6‑2001 The learned AR contended that section 17A(i)(b) provided that "no order of assessment shall be made under section 16 at any time after the expiration of period of four years from the end of assessment year in which the net wealth was first assessable or two years from the date of furnishing of a return or a revised return under section 15, whichever is later, where the assessment year is an assessment year commencing on or after first day of July, 1981". The learned AR vehemently contended that in the light of a specific provision in section 17A(i)(b) no order of assessment could be made where two years had elapsed after the filing of wealth tax returns. The assessment finalized after a lapse of two years being barred by time is deemed to have been finalized accepting declared version. The learned AR also informed that on the same issue, Writ Petition No.6315 of 1994 had been admitted by the Honourable Lahore High Court but had not been fixed for hearing. The learned AR also stated that the learned CIT(A) did not accept the claim of exemption stating that no order of any judicial authority on the issue was quoted. The learned AR in this regard stated that the ITAT, Karachi in the case of Karachi Stock Exchange in I.T.A. Nos. 251/LB of 1996‑97 etc., dated 26‑7‑2000 had held the exchange to be a charitable organization qualifying for exemption under clause 93 of the Second Schedule to the Income Tax Ordinance and as a consequence qualified for exemption under clause 22 of the Second Schedule to the Wealth Tax Act. The learned AR also relied on a case from Indian jurisdiction reported as (1965) 55 ITO 772 (SC Ind.) CIT Madras v. Andhra Chambers of Commerce wherein the Court held that if the building was properly held under a trust or other legal obligation, wholly for charitable purpose, the income from the building was exempt from tax under section 4(3)(1) of the Indian Income Tax Act, 1922. The learned AR further relied on a case reported as (1967) ITO 195 (H.C.A.P.) CIT v. Hyderabad Stock Exchange Ltd., A.P. wherein it was held that the object beneficial to a section of the public is an object of general public utility if the section of the community sought to be benefited, is sufficiently defined and identifiable by some common quality of a public or impersonal nature; this test was satisfied by the stock exchange and hence its income was exempt from tax under section 4(3)(i) of the Income Tax Act, 1922. The learned AR also submitted that the original assessments had been set aside for which the prior approval of the IAC was obtained but the subsequent order passed under section 16/23 by the Assessing Officer without complying with the mandatory provision, as required under rule 8(3) of the Wealth Tax Rules, 1963 i.e. obtaining prior approval of the IAC, being illegal, merit deletion for assessment years 1992‑93, 1994‑95, 1995‑96 and 1996‑

97. Reliance in this regard was placed on the reported cases 85 Tax 27 (H.C. Lah.) 84 Tax 181 (2001) and 113 ITR 22.

6. After hearing the parties and going through the orders passed by the Authorities below we find that the contentions as raised by the assessee bear weight. Section 17A(i)(b) specifically provides that the time limit for completion of assessment is two years where a return has been filed. The general limitation of four years is not applicable in a case where a return has been filed and is only applicable if the return has not been filed.

7. Reporting the claim of exemption the assessee has relied on an unreported decision, dated 26‑7‑2000 passed in I.T.As. Nos. 251, 252/LB of 1996‑97, etc. of Karachi Stock Exchange and the reported decision of Andhra Pradesh High Court (Hyderabad Stock Exchange) where in it was held that an object beneficial to the section of public is an object of general public utility if the section of community sought to be benefited is sufficiently defined and identified by some common quality of public and impersonal nature; this test was satisfied by the Stock Exchange and hence its income was exempt from tax under section 4(3) of the Income Tax Act, 1922. We are of the considered view, that facts and circumstances of the case in hand, i.e. Lahore Stock Exchange (G) Limited are exactly the same as were in the cases decided by the Tribunal and Andhra Pradesh High Court. Therefore, following the ratio of the cases cited supra we feel no hesitation in allowing the exemption under section 5(1)(i)/clause 22 of the Second Schedule to the Wealth Tax Act, 1963 in all the years under consideration. Since we have decided the appeal filed by the assessee on legal ground, there is no need to adjudicate the issues raised by the Department.

8. As a result of the above discussion the appeals filed by the assessee are allowed whereas those filed by the Department are dismissed being devoid of merits. C.M.A./971/Tax (Trib.) Appeal allowed.