P T D 1990 1014 (PLP)

(i) Whether lapse on the part of the I.T.O in no0t levying the workers welfare fund as an omission rectifiable under section 156 of the Ordinance? If so, whether issuance of a notice under section 156(2) of the Ordinance was a prerequisite before rectifying the mistake? (ii) Whether an order in writing was required under section 4(4) of the Workers' Welfare Fund Ordinance, 1971, for charging levy at 2% of the assessable income under the Income Tax Ordinance? If the answer was in the affirmative, whether intimation of demand in an I.T‑30 Form could be deemed to constitute an order in writing as contemplated in section 4(4) of the Workers' Welfare Fund Ordinance, 1971? (iii) Whether an order in writing passed after more than three years of the completion of assessment proceedings would constitute an order as envisages under section 4(4) of the Workers' Welfare Fund Ordinance, 1971?

5. Before we proceed further, it would be worthwhile to refer to section 156 of the Ordinance which is reproduced hereunder for facility of reference:‑‑ "Section

156. Rectification of mistake.‑‑‑(1) Any income tax authority or the Appellate Tribunal may amend any order passed it to rectify any mistake apparent from the record on its own motion or on such mistake being brought to its notice by any other tax authority or by the assessee. (2) No order under subsection (1), which has the effect of enhancing an assessment assessment or reducing a refund or otherwise increasing the liability of the assessee, shall be made unless the parties affected thereby have been given a reasonable opportunity of being heard. (3) . . . . . (4)

6. It would also be advantageous to quote section 4(4) of the Workers Welfare Fund Ordinance, 1971:‑ Section 4(4). (1) .. (2) ............................................................... (3) ............................................................... (4) At the time of making an assessment under the Ordinance or as soon thereafter as may be, the I.T.O. shall, by order in writing, determine the amount due from industrial establishment under subsection (1), if any, on the basis of the income so assessed after taking into account the amount paid by the industrial establishment under subsection (3) in respect of the year and the industrial establishment shall pay the amount so determined on or before the date specified in the order. (5) .. 7.As regards the first issue, we are of the firm view that this was a levy legally chargeable which the I.T.O. had inadvertently failed to charge. It was clearly a mistake on the part of the I.T.O. which was rectifiable under section 156 of the Ordinance. However, with regard to applicability of subsection (2) of section 156 of the Ordinance, we feel that this case fell outside the scope of section 156(2) of the Ordinance inasmuch as the charge of workers' welfare fund (Words missing), respectively, being an admissible expense under the P & L account would not have resulted in the enhancement of total tax demand. In other words, it would not have affected enhancement of assessment or reduction in refund or increase in liability of the assessee. There was, therefore, no need to issue a show‑cause notice under subsection (2) of section 156 of the Ordinance. In this regard, we endorse the finding of the learned AA.C. that issuance of a notice under section 156(2) of the Ordinance in the present context was not warranted and so we hold.

8. Now coming to the next issue i.e. whether there was need for an order in writing before charging the workers' welfare fund and whether intimation in I.T‑30 Form constituted an order in writing, we are of the view that the words `by order in writing' would really mean that there has to be a separate order determining the amount due from the industrial establishment on the basis of income assessed under the Income Tax Ordinance by the I.T.O. An I.T‑30 Form indicates only the manner of computation of the tax demand and is not a substitute for an order in writing. We, therefore, hold that the intimation by the I.T.O. by way of an I.T‑30 Form did not constitute an order in writing determining the Workers' Welfare Fund. The demand so made by the I.T.O. was illegal.

9. Having regard to the third issue, the use of the expression in section 4(4) of the Workers' Welfare Fund Ordinance, 1971, `at the time of making an assessment or as soon thereafter as may be' clearly indicate that the order has to be passed in a matter of days rather than years. The words `as soon thereafter as may be' as pointed out by the learned A.R., have been interpreted by the Tribunal in I.T.A. No.1233(KB) of 1983‑84, dated 30‑6‑1987, reported as (1987) 56 Tax 101 (Tribunal) to mean that the order be passed within few days and not years. Since there was no separate order in writing charging Workers' Welfare Fund and the tax demand in that connection was intimated after more than three years of passing the assessment order, we hold that the additions of Rs.2,584 and 2,828 for the charge years 1983‑84 and 1984‑85, on account of Workers' Welfare Fund were illegal and so we declare. 9‑A. In the result, both the appeals preferred by the assessee succeed. M.B.A./910/T Appeals succeeded.