2013 PLP (Trib (PTD)

The titled appeal has been filed at the instance of Mr. Imtiaz Ahmad Roohani of Messrs daily sang-e-meel, Faizi road, Multan to impugn order dated 19-5-2011 in Appeal No. 90 passed by Commissioner Inland Revenue (Appeals), Multan. Facts in brief are that the appellant, an individual, continued to derive income from printing and publishing of a Newspaper. Return for the year under consideration was filed on 30-9-2005 at net income at Rs.225,

000. Afterwards, taxpayer revised his return on 25-2-2009 declaring the same results as declared in the original return. Subsequently the taxpayer was selected for Audit under section 177 of the Income Tax Ordinance, 2001 by the Commissioner Income Tax (Audit), Regional Tax Office, Multan. The appellant was asked to supply the books of accounts which they did not submit. In view of the non-cooperative attitude, an audit report was prepared on the basis of the information and material available on record and a show cause notice along with prescribed notice under section 122 of the Ordinance was issued on 9-9-2010 for compliance on 16-9-2010. The explanation offered by the taxpayer was found unsatisfactory. The final show cause notice under section 122(9) of the Ordinance was issued vide No. 170 dated 21-9-2010 for compliance on 24-9-2010. The taxpayer did not participate the proceedings and the default on the part of the taxpayer regarding non-furnishing of books of accounts, wealth statement along with wealth reconciliation statement and allied documents reportedly established. Keeping in view material, facts available on record and information provided by the Ministry of Information and Broadcasting the deemed assessment order was amended under section 122(4) of the Income Tax Ordinance, 2001 holding that total amended income case to Rs.13,522,960 and tax on this income was calculated at Rs.4,605,536 and balance recoverable was found Rs.4,605,

536. Feeling aggrieved the appellant challenged this order before the learned CIR(A) who partially granted relief with the direction to the assessing officer to allow credit on the claimed deduction of Rs.423,273 subject to production of original challan of tax deductions under section 153 of the Ordnance. The rest of the order was upheld. Hence this appeal by the assessee.

2. The learned counsel of the appellant has urged that the whole issue revolves around a piece of information gathered by the Revenue from Ministry of Information and Broadcasting which they stated are not valid evidence under the laws of evidence. They contended that there is no detail available as to what purpose this information were supplied and on what basis this information were made out. They stated that information supplied by the Ministry cannot be taken as "definite information" within the meanings of subsection (5) of section 122 of the Ordinance. They further dilated that the Revenue has not brought on record any supporting evidence relating to quantum of publication and sales which could have been made the basis to prove the stance of the Department. They contended that the whole case has been made on the basis of surmises, presumptions and conjecture which cannot qualify the test of judicial scrutiny. Arguing on the legal point they submitted that subsection (10) of section 177 of the Ordinance was added by the Finance Act, 2010 which cannot be applied retrospectively for the tax year 2005 as it is applicable for the tax year 2010 onward and no assessment under section 121 of the Ordinance, can be made where a return is filed under section 114 in a case selected for audit for the tax year prior to 2010. In this regard they cited judgment 2011 PTD 1558 and 2012 PTD (Trib.)

184. The learned DR supported the impugned order.

3. We have heard the rival arguments and perused the findings. We find that the information gathered from Ministry of Information and Broadcasting cannot be made the basis for framing the case against the taxpayer. This was not the definite information within the meaning of subsection (5) of section 122 of the Ordinance. Had it been the definite information the Revenue should have not reduced the price of the newspaper as Rs.4 per copy instead of Rs.7 as provided by the Ministry. For framing the case against the taxpayer proper supportive evidences should have been collected from different sources which has not been done in this case. We, therefore, hold that the impugned order suffers from factual infirmities and is annulled.

4. Order accordingly. CMA/205/Tax(Trib.) Appeal accepted.