2003 PLP (Trib (PTD)

6. We have given due consideration to the submissions made by both the learned representatives. We have also examined the income tax records produced on our requirement by the learned D.R. pertaining to the AOP Messrs Wali Muhammad and Co. existing at NTN 10‑16‑0280310. The Income Tax Assessment Record‑ produced by the learned D.R. is incomplete. The Returns Cover, however, contains the following documents:‑‑ (1) A statement under section 143B of the Income Tax Ordinance, 1979 declaring exports of Rs.4,169,200 and tax deduction of Rs.20,846. (2) Income Tax Return serial No.083852 declaring total income of Rs.711,439 from house property under section 19 of the Ordinance in respect of property of Plot. No.F‑

121. Hub River Road. Side, Karachi. The return was filed under Self Assessment Scheme with status as AOP and nature of business as rental income and exports. Assessment Year 1997‑98; (1) A statement under section 143B of the Income Tax Ordinance, 1979 declaring exports of Rs.4,536,985 with tax deduction of Rs.17,687;‑ (2) Income Tax Return under Self‑Assessment Scheme immune from audit with status as AOP and nature of business as rental income and exports. Rental income of Rs.696,014 was declared and tax payable with the return was paid. Assessment Year 1998‑99. (1) A statement under section 143B of the Income Tax Ordinance, 1979 showing export of Rs.25,500. (2) Income Tax return with status as AOP under simplified Self Assessment Scheme showing nature of business as rental income and export with income from house property declared at Rs.868,

615. Assessment Year 1999‑2000: (1) A statement under section 143B showing export of Rs.3,484,400 with tax deduction of R.17,422. (2) Return under Universal Self‑Assessment Scheme showing nature of business as‑ rental income and the income declared is Rs.1,013,

379. In this case there is a letter from the A.R. to the Assessing Officer that return having been filed under Self‑Assessment ‑Scheme automatically stands so accepted under the law.

7. Other documents in the Income Taw Return Cover are relevant to the assessment years 2000‑2001 and 2002‑2003 which are not in appeal before us. However, we have noticed that even in these years the AOP has declared its income from house property and the income is from the property which is subject‑matter of wealth tax in appeals before us. On the basis of what has transpired on examination of departmental records pertaining to income‑tax, it stands established that this AOP is holding the property for the business of letting it out. Such an asset in the hands of AOP is obviously taxable in view of the provisions of section 2(1)(5)(ii) and the Explanation attached thereto oil the Wealth Tax Act, 1963.

8. Now coming to the objection of the learned A.R. that assessments for the years 1994‑95 and 1995‑96 were barred by time. We are afraid we cannot subscribe to this view of the learned A.R. as we have held above the assessee‑respondent was required under the law to submit a return of net wealth under section 14 of the Act. By reason of its omission or failure on the part of the assessee respondent to make a return of its net wealth under section 4 of the Act, a notice under section 17(1)(a) and not under section 1 (1)(b) was to be served by the Assessing Officer and such a notice can to served within 5 years of the end of the relevant assessment year and the assessment could be completed within two years from the end of the assessment year in which notice under section 17(1)(a) was served, as has been laid down in section 17A(2)(b) of the Act. In view of these provisions of law we do not find that the assessment proceeding initiated and completed by the Assessing Officer for the assessment years 1994‑95 and 1995‑96 were in any way barred by time.

9. The learned A.R. then referred to the proviso to section 17(1) which for the sake of reference: reference is reproduced below:‑‑ "Provided that no proceeding; in this subsection shall be initiated unless definite information has come into the possession of the Deputy Commissioner of he has obtained the previous approval of the Inspecting Additional Commissioner of Wealth Tax in writing to do so." It was asserted by the learned A.R, that in the instant case approval for issuing notice under section 17 had not been obtained by the Assessing Officer from his IAC which was essential notwithstanding the use of word "or" in the proviso which needs to be read as "and". We have given due consideration to the submissions made by the learned A.R. but unfortunately we cannot subscribe to his view. We have noticed that the word "information" has beep used only in clause (b) of subsection (1) and this "information" possession of the Assessing Officer may or may not be definite. Where the Assessing Officer is sure that the information is definite he needs not seek previous approval of his IAC and where the information is not definite he has to seek the approval of his. Still if this is presumed that notwithstanding conspicuous omission of the word "information" in clause (a) of subsection (1) this proviso is practically applicable to sub‑clause (a) also, even then there could be no information more definite to what is declaration of the assessee itself in the income‑tax proceedings. As stated above in the income‑tax proceedings the assessee has itself been showing the business of letting out of property and therefore, it cannot take diametrically opposite position during the wealth tax proceedings that it had not omitted or failed top submit return of net wealth as provided in section 14 of the Act. We are therefore, not convinced with this arguments of the learned A.R.

10. Consequently we hold that the learned CWT(A) was not justifier in canceling the orders of the Assessing Officer and in this view of the matter the combined order of the learned CWT(A) so far as it is relevant to the assessments under appeal before us is cancelled and orders of the Assessing Officer for these years accordingly stand restored.

11. Consequently the appeals succeed in the manner indicated above. C.M.A./853/Tax (Trib.) Appeals accepted.