2002 PLP 99 (PTD)

(iii) That the action of the learned I.A.C. in treating the imports made on behalf of Tetra Pak as supplies in the hands of the assessee is unlawful, unjustified and contrary to the facts and law of the cage.

2. Authorized Representatives of both the parties have been heard. Available records have been perused.

3. It has been submitted by the A.R. of the assessee that original assessment under section 62 for the year 1987-88 was completed in 1990 which was set aside by the C.I.T. on 19-2-1991. The learned CIT's order was upheld by I.T.A.T. on 2-11-1991. Reassessment was made by the I.T.O. on 30-6-1998 which was barred by time as assessment has to be made under section 66 of the Income Tax Ordinance within one year from the end of the financial year in which order of set aside was received. Regarding assessments for the year 1988-89 and 1989-90, the A.R. has submitted that original assessments were completed under section 59B. These assessments were reopened and made afresh under sections 65/62 on 30-6-1992. The learned C.I.T. .set aside these assessments in appeal on 28-6-1993. I.T.A.T. confirmed the order of the C.I.T. on 10-9-1997 and I.T.O. made fresh assessments on 30-6-1998. According to the A.R. all the assessments completed by the I.T.O. for the year under appeal have been made in accordance with the directions issued by the :earned C.I.T. (Appeals) and I.T.A.T. The learned I.A.C. has not pointed out any error or prejudice caused by the Assessment Orders of the I.T.O. and hence the exercise of jurisdiction by him under section 66A is arbitrary and capricious. The A.R. has drawn our attention to section 66A(1A) and has pleaded that I.A.C. cannot take action under section 66A on the points or issues on which Commissioner of Income-tax (Appeals) or I.T.A.T. or. High Court or Supreme Court have already given decisions. The A.R. has vehemently resented the attitude of the department and states that whenever the assessee requests for payment of refund the department initiates actions under section 65 or 66A to forestall the assessee's genuine claim of refund.

4. The above-mentioned contentions of the assessee and the arguments of the A.R. of the assessee have been opposed vehemently by the learned D.R. The D.R. has supported the case of the I.A.C. but he has not been able to add any new argument. lie has simply repeated/reiterated the same reasons and arguments which have been given by the I.A.C. in his order under section 66A.

5. We have considered the contentions of both the parties and have heard the arguments of their authorized representatives. We have also gone through the original assessment orders of the I.T.O., appellate orders of the Commissioner, appellate orders of the I.T.A.T. and the assessment orders passed by the I.T.O. under sections 62/135 in consequence of directions of appellate authorities. Our decision is as follows: The facts of the case as briefly reiterated are that during the assessment proceedings initiated by the I.T.O. for all the years under consideration, the assessee had claimed that he had earned income from commission on the imports made by him for Messrs Tetra Pak Ltd. and had not made the said imports on his own account. It was submitted that an agreement with Messrs Tetra Pak. Ltd. had been made on 29-11-1986 for import of spare parts required by the Tetra Pak Ltd. for their machinery. Messrs Tetra Pak Ltd. were unable to make the said imports on their own account because of certain restrictions which had been imposed by the Government under its Import Policy for the relevant year. Thus the imports were made in the name of the assessee and all the funds for investment in imports and expenses, etc. were provided by Messrs Tetra Pak Ltd. The assessee was allowed commission at the rate of 2% as well as benefit deducted under sections 50(4) and 50(5) of the Income Tax Ordinance. This claim of the assessee was, however, rejected by the Assessing Officer who treated the assessee as importer and supplier of the machinery parts in question. Appeals against this treatment of the Assessing Officer were filed before the Commissioner and it was contended before him that the assessee was merely an indentor and a commission agent but he had wrongly been assessed as importer and supplier. It was also submitted before the Commissioner that in identical circumstances and with similar facts the case of Messrs Panjned Marketing Company bearing NTN 5-5-1136153 had been accepted as a commission agent of Messrs Tetra Pak Ltd. The learned Commissioner set aside the assessments for de novo action with certain directions. Appeals filed by department against the action of the learned Commissioner were dismissed by the I.T.A.T. who confirmed his appellate orders. Consequently the Income-tax Officer completed the assessments under sections 62/135 for all the years under consideration in accordance with the directions of the Appellate Authorities and accepted assessee's contention that he was an indentor/commission agent and not an importer/supplier.

6. In view of the facts narrated above it is crystal clear that the issue whether the assessee is an importer and supplier or he is an indentor and has earned commission on imports has been the main subject of controversy between the assessee and the Revenue not only during assessment proceedings but also during appeal proceedings. Since this issue has been the subject-matter of appeals and Appellate Authorities like Commissioner of Income-tax (Appeals) and Income-tax Appellate Tribunal have already adjudicated upon this issue, so action under section 66A does not lie on the basis of this issue as the same has been ruled out by subsection (1 A) of the said section. In this situation assessments made by the I.T.O. under sections 62/135 for all the years under consideration in accordance with the directions of the Appellate Authorities cannot be treated as erroneous and prejudicial to the interest of revenue. Hence the order passed by the I.A.C. under section 66A cancelling these assessments is illegal and without jurisdiction. Therefore, it would meet the ends of justice if the impugned order of the I.A.C. is cancelled. C.M.A./M.A.K./142/Tax(Trib.) Order accordingly.