1990 PLP (Trib (PTD)

Naseer Ahmad, D.R. for Respondent. Date of hearing: 12th April, 1989. This appeal filed at the instance of an assessee, calls in question the order passed by the learned IAC Range‑1, Zone‑B, Lahore, dated 21‑8‑1988.

2. The facts are that on 30‑1‑1985 for the charge year 1984‑85, the assessee's returned income of Rs. 25,000 was accepted under section 59(1) of the Income‑tax Ordinance, 1979 (hereinafter called `the Ordinance)'. At the suggestion of the learned AC (HQ), the learned IAC Range‑I, Zone‑B, Lahore directed the assessee to file wealth statement. Thereafter, he issued notice under section 66‑A of the Ordinance on 30‑5‑1988 calling for the assessee's reply on the pretext of under‑statement of valuation of two shops purchased by the assessee in Liberty Plaza, Liberty Market, Lahore as well as existence and sale of jewellery measuring 200 tolas. In this year, the assessee had declared purchase of two shops at Liberty Plaza for a consideration of Rs. 1,38,000 and sale of 200 tolas of jewellery for Rs. 3,36,847 to Messrs Uzma Jewellers, an assessee existing at NTN: 09‑05‑2101631. In response to the notice issued under Section 66‑A of the Ordinance, the assessee filed written reply on 9‑1‑1988. Thereafter, further information was provided by the assessee on 18‑7‑88, and 30‑7‑88 alongwith photo‑copies of final accounts of Messrs Uzma Jewellers and the assessment order. The assessee stated that the declared valuation of the shops was as per sale price mentioned in the registered sale deeds. The transaction of a shop purchased on 30th June, 1986 by another assessee existing at NTN: 06‑05‑1479233 was repelled stating that the same was purchased two years after the purchase of shops by the assessee. The learned IAC was requested by the assessee to send for the record of the seller of shops i.e. Messrs Raja Enterprises (Pvt.) Ltd., alongwith assessment record of Messrs Uzma Jewellers. No action was taken by the learned IAC on the assessee's request. On 21‑8‑1988 the learned IAC adopted the valuation of two shops purchased by the assessee at Rs. 2,65,500 (alongwith incidental charges at Rs. 8,000). Additions of Rs. 1,20,000 and Rs. 1,00,000 were made on account of gifts made by the assessee to her husband in the assessment years 1983‑84 and 1984‑

85. Addition of Rs. 15,000 was also made on account of gifts made by the assessee to her children during the charge years 1980‑81 to 1982‑

83. After deducting the assessed income for the assessment years 1980‑81 to 1984‑85 and giving credit of sale of jewellery of 20 tolas only, unexplained income was determined at Rs. 4,08,

707. Adding thereto the declared businesses income of Rs. 25,000, the assessee's total income was worked out at Rs. 4,33,707.

3. This appeal was fixed for out of turn hearing by the special order of the learned Chairman, ITAT dated 21‑12‑

88. During the pendency of the appeal, the assessee's authorised representative moved an application on 21‑1‑1989 requesting for summoning the record of the learned IAC containing the assessee's wealth statement. The assessee also requested to send for Mr. Ahmed Ali, Manager Uzma Jewellers under section 148 of the Ordinance alongwith the entire account, books from the assessment years 1980‑81 to 1986‑

87. The D.R. was supplied copy of the letter who wrote letter to the learned TAC, Range‑I, Zone‑B, Lahore to furnish his record along with proof and evidence to justify the initiation of proceedings under section 66‑A of the Ordinance. Due to. non -availability of requisitioned record, hearing of this appeal was adjourned twice at the request of the DR on 25‑1‑1989 and 28‑2‑1989. Neither the assessment record of the ITO nor the record of proceedings initiated by the learned IAC was furnished to the DR on the ground that the same were missing. This appeal was finally heard on 12‑4‑1989 and the DR was directed to procure the requisite record at the earliest. Despite various reminders during the period of five months, the record of the learned ITAC as well as of ITO was not funhished. In these circumstances, we are deciding this appeal on the basis of the copies of the documents furnished by the assessee's AR.

4. The assessee's AR inter alia contended: (i) that issuance of notice under section 66‑A of the Ordinance by the learned IAC was illegal and without lawful authority as the same was issued without calling for and examining the record of the assessment proceedings undertaken by the I.T.O.. This grievance was elaborated by contending that the solitary material available with the learned IAC for issuance of notice was the suggestion of the learned AC (HQ) which was no good legal basis for assumption of jurisdiction under section 66‑A of the Ordinance. (ii) that no material or record regarding under statement of valuation of two shops purchased by the assessee being available with the learned IAC, the re‑assessment made by him amounted to just a change of opinion of one officer over the other and that too just on guess basis. (iii) that the queries made by the learned TAC having been fully replied by furnishing documentary evidence in the form of registered deed of purchase of shops and sale of jewellery had been explained and established by furnishing sale receipts and copy of purchase account of Messrs Uzma Jewellers. Without discarding that evidence, there did not exist any material with the learned IAC for interference under section 66‑A of the Ordinance. (iv) that the learned IAC was not empowered to make additions under section 13 of the Ordinance on the presumption of under‑statement of valuation of two shops purchased vide registered sale‑deed as that power exclusively vested with the ITO. (v) that the learned IAC erred in attributing tearing of wealth statement to the assessee because after submission that formed part of the assessment record supposed to be in the custody of the assessing officer. Any interpolation or tearing of some portion of the same could not be attributed to the assessee as responsibility for safe custody vested with the Assessing Officer and his staff.

5. We have given our anxious consideration to the submissions of the assessee's AR. the Departmental Representative tried to defend the impugned order without assistance of any record. We are of the considered view that in the facts and circumstances of this case, assumption of jurisdiction under section 66 A of the Ordinance by the learned IAC was without lawful authority as he had issued notice without examining the record of assessment proceedings conducted by the I.T.O. The learned IAC erred in holding that the assessment made by the I.T.O. was erroneous and prejudicial to the interest of revenue. When the; assessment record was not before the learned IAC, his finding regarding the assessment to be prejudicial to the interest of revenue was without any basis. Under these circumstances, we cannot resist from observing that the impugned order seems to be review of the assessment merely due to change of opinion and that too without any basis. Non‑furnishing of the record of the proceedings initiated by the learned IAC as well as of the assessment proceedings despite various reminders and requests of the DR as well as the assessee's AR lends full support to the conclusion that the power of issuance of notice under section 66‑A of the Ordinance was not exercised by the learned IAC on perusal of any material. The finding of the learned IAC regarding under‑statement of valuation of two shops purchased by the assessee is without any basis. There did not exist any basis with the learned IAC to hold that the declared valuation was understated. The solitary instance of purchase of another shop by another person two years after, the purchase of the shops by the assessee did not form proper material to attribute under‑statement to the assessee. The assessee had purchased two hope by registered sale‑deed dated 2‑8‑1983 whereas in the case relied on by the learned IAC, shop was purchased by an assessee existing at NTN: 06‑05‑1479233' in the assessment year 1986‑

87. There could not be, thus, any relevance for comparing the purchase price of the shops of the assessee with that of the parallel', case. Material in the form of sale price of shop of parallel case was no good ground for invoking powers under section 66‑A of the Ordinance for attributing under‑statement of valuation of shops to the assessee. On the issue of sale of jewellery, suffice it to say, that the assessee stood absolved of her responsibility after furnishing the NTN and purchase account of Messrs Uzma Jewellers. Despite repeated requests of the assessee, the learned IAC having not summoned Messrs Uzma Jewellers under section 148 of the Ordinance established that the issue of sale of jewellery has been decided in an, arbitrary manner. Assumption of jurisdiction and addition made on that account by the learned IAC was totally uncalled for. The learned IAC erroneously attributed tampering in the wealth statement filed by the assessee showing availability and sale of jewellery. The assessment record being in the custody of the departmental officers, the assessee could not be blamed for any interpolation or tampering therein. Instead of finding out the real person responsible for tampering or misplacing the wealth statement, the learned IAC erroneously shifted the responsibility on the assessee and unnecessarily condemned her on that score. ' A perusal of the impugned order sufficiently establishes that it is just a change of opinion of the learned IAC over that of the assessing officer regarding gifts made in the preceding years, existence or non‑existence of jewellery, sale of jewellery by the assessee to an existing assessee and valuation of purchase price of two shops. Section 66‑A of the Ordinance does not empower the learned IAC to assume the role of a reviewing authority on the assumption that the assessment was prejudicial to the interest of revenue. Any other aspect of the matter is that section 66‑A of the Ordinance does not empower the learned IAC to revise the assessment for making additions as deemed income because power for that purpose exclusively vests in the I.T.O. under section 13 of the Ordinance. Section 66‑A of the Ordinance does not empower the learned IAC to make any addition as deemed income under section 13 of the Ordinance on the pretext of under statement of valuation of any property or sale of any jewellery.

6. Under these circumstances, the order passed by the learned IAC under section 66‑A of the Ordinance on 21‑8‑1988 being untenable in law is annulled. The assessee's appeal succeeds accordingly. M.BA./865/T Appeal allowed.