2005 PLP (Trib (PTD)

JAWAID MASOOD TAHIR BHATTI (JUDICIAL MEMBER)

The appellant through this appeal has objected to the impugned order of the learned CIT(A), dated 30-4-2004 setting ,aide the assessment with specific direction. Dr. Ilyas Zafar, Advocate has appeared on behalf of the appellant and has submitted that the return of income in this case was filed under Self-Assessment Scheme on 15-10-2002 on the basis of the Scheme announced on 15-6-2002. Later on, on 17-12-2002, CBR issued policy guidelines for ousting the case from Self-Assessment Scheme by the RCIT and the Assessing Officer selected the case of the assessee for Audit under para. 9(a)(ii) of Circular No.7 of 2002 on the basis of allegedly understatement of GP ultimately decline in income which according to the Assessing Officer was one of the parameters laid down for the said selection. He has contended that the assessee against this treatment meted out by the Assessing Officer filed Writ Petition No.8939 of 2004 before the Hon'ble Lahore High Court which was disposed of vide order, dated 8-6-2004 dismissing the petition in limine. However, in paragraph No.5 of that order, the Hon'ble Lahore High Court has observed as under:-- "Under these circumstances, I am not inclined to exercise extraordinary Constitutional powers under Article 199 of the Constitution of Islamic Republic of Pakistan when an adequate and efficacious remedy of appeal is available to the petitioner and the same has been taken avail of before the learned Tribunal. The petitioner can raise this ground before the learned Tribunal who shall consider and decide the same as per the law." The learned counsel has contended that in the case of Sahib Textile (Pvt.) Ltd. and others v. Federation of Pakistan reported as 2004 PTD 1 & (2003) 88 Tax 337 (H.C. Lah), the Hon'ble Court has declared the guidelines issued by the C.B.R. through Circular No.7 of 2002 as ultra vires law and the same has been disapproved and the show-cause notices as well as orders of setting apart the cases for Total Audit of the assesses has been declared to be without lawful authority. On the other hand, the learned DR is unable to rebut the above said position. In view of the above circumstances, we have no option except to follow the decision already made by the Hon'ble Lahore High Court declaring the Circular No.7 of 2002 as ultra vires on the basis of which, the Assessing Officer has selected the case of the assessee for Total Audit and has assessed the income of the assessee under normal law. In view of the decision of the Hon'ble Lahore High Court, we find no justification for selecting the case for Total Audit under Circular No.7 of 2002. The returns filed by the assessee under Self-Assessment Scheme are, therefore, restored and all the subsequent proceedings by the department are vacated. The appeal filed by the assessee is allowed. C.M.A./296/Tax (Trib.) Appeal accepted.