2003 PLP 1723 (PTD)

14. It transpired on preliminary investigation that the return of income available on the Circle Record bearing 3 leaves was different from the copy of return manifestly certified by the circle and available with the AR bearing 5 leaves. Both contended that the copy available with them was genuine and the other one was forged.

15. A copy each of the two disputed returns of income for assessment year 2001-2002 was given to 'each party and signatures in acknowledgements of receipts of copy was obtained. Ms. Nabila Iqbal, Taxation Officer, Lahore and Mr. Mansoor Ahmed from the office of Mr. Farrukh Naeem, ITP were nominated to investigate the issue and the matter was remanded to them. A factual report on the remanded issue was required to be submitted.

16. Mr. Muhammad Mansoor Ahmed, the A.R. of the complainant submitted his report stating that he inspected the assessment records in the Circle. and found that firstly the Receipt Register No. 327 noted on the copy of return provided to him from Circle Record during the hearing in Federal Tax Ombudsman Office was interpolated to change the R.R. Number to

370. He submitted copies of the Receipt Register wherein the return of complainant received through CIT Office is entered at Serial No.370. Further the return on assessment record does not bear the DPC machine number either whereas the copy of return available with complainant bears the DPC No.1102278. It also bears the serial and batch number given by Circle Staff.

17. The Taxation Officer, Ms. Nabila Iqbal too has submitted the report through the RCIT which is reproduced hereunder:-- "(1) All the returns of income filed for the assessment year 2001-2002 were sent to the DPC for computer entry of all data showed in these returns. The return of the assessee under discussion ,as originally filed was also sent to and entered at DPC. Printout obtained in this regard (Annex-A) indicated that both the returns available with the department and the assessee are not genuine for the following reasons:-- (a) On the receipt of returns by the DPC machine number was affixed which is missing in the case of return available with the Department. It meant that this return was not sent to the DPC for computer entry of data. (b) Copy of return available with the assessee though contains the said machine number but it seems to be managed. This return cannot be termed to be the original one for the reason that:-- (i) Computer printout reflects receipts during the year at Rs.229,675 instead of Rs.539,625 as shown in the said return (due to tampering) by tampering/over writing. (ii) Processing of return at DPC was made on the basis of NIC Number and fictitious number was allotted by the DPC for its control, which was Z278651 for the year under-reference. Data entered on the said fictitious number did only account for receipt of Rs.229,675 as per original return which was available with the DPC at the time of entry. (2) Regarding the attestation of return submitted by the assessee, the Assessing Officer and Circle (T) I.T.I. (has) have submitted that those are not genuine and no such person exists in the circle with those initials. Thus it is not a lawful or legal attestation. The Circle Officer has also reported .that the assessment record was .tampered after the initiation of set-apart proceedings." ,

18. The RCIT has submitted with reference to the foregoing report that alongwith other factors the. case of assessee was selected for total audit on the basis of suppression of gross receipts. Declaration. of advertisement receipts through the process of tampering of return by the assessee at later stage proves departmental contention. The assessee in collaboration with officials of the department managed to get his return replaced in the record of the office and-tamper with the original return to post his modeling receipts therein. From the record of the DPC it is established that the declared receipts as per original return did not include receipts from commercials. Thus various factors that formed the basis for set-apart were very much valid and in line with prescribed parameters. The RCIT has ordered an enquiry against the concerned officials 'and intends to take action in accordance with the relevant provisions of law and rules.

19. The Authorised Representative of the complainant as well as the Representatives of the respondent have been heard again. They have reiterated their contentions considered supra. Misplacement of genuine return from the assessment record is an admitted fact and the respondent has instituted an enquiry to fix the responsibility to be followed by action against the guilty official /officials under the rules. Further, the respondent has questioned the genuineness and validity of the copy of the return available with the complainant as the true copy of actual return. The copy of return produced by A.R. of the complainant bears two remarks on first page ostensibly made by Inspector of Income Tax with initials and designation "ITI". First is a hand-written remark, "call for Part-V' of the return" acid the other is a rubber stamped, remark "Certified to be true copy". Both do not bear any date.. All the five pages comprising of first page of return of income, second page containing Parts-I and II of the return, third page containing "Verification" and "Annex-Income from House Property under section 19", fourth page containing "Estimated Trading, Manufacturing, Profit and Loss Account. As on 30-6-2001 " and fifth page a copy of "Tax Payment Receipt" bear the rubber stamped remark ."Certified to be true copy", with 'same initials and designation as on first page, without recording any date. The contention of respondent that both the ITI as will as the A.R. of the complainant are fully, aware of the fact that Inspector of Income Tax has no authority to ata8t any document as the true copy of any original document. Besides, the ITI has not only denied having attested the said return but his initials bear no similarity to the initials on the aforesaid pages. Statement of Profit and Loss at page 4 of the copy of aforesaid return bears following entries:-- "Salary to staff 126,000 Receipts 229,625 Allowance 56,700 First Half including A.D. Traveling and Conveyance 95,300 Year 310,000 Newspapers and Magazines 14,870 Entertainment. . 18,000 Miscellaneous expenses: 16,410 Tailoring expenses 70,200 Dress Dressing 35,450 Hair Dressing 28,515 Net Profit 78,180 Total 539,625 Total 539,625"

20. Item 8 of Summary of Return at page 1 bears an entry of Rs.229,675 in appropriate column. However, words and figures "Six monthly Rs.310,000" are written by hand over printed description of Item 8. ."Sales/Receipts during the year" and on outer side of column where the amount of Rs.229,675 is written there is another handwritten remark. "Including (50,000) Advertisement".

21. Besides, the respondent in support of his contention that the version of return available with the complainant is not the true copy of genuine return, has relied upon the Extract of "Edit List" of PRAL where following Computer entries of summary of return are recorded from genuine return of income:-- Summary of Return Code Amount 1. 78,180 2. 2,400 5. 2,450 8. 229,675 11. 78,180 13. 70,000

22. Without prejudice to the departmental enquiry into the circumstances leading to loss of genuine return from the record, there is sufficient evidence on. record to believe that the version of return produced, before the authorised dealing officer, on behalf of the complainant is not the true copy of the Original Return because it is evident even from the aforesaid copy of return that receipts declared originally were only Rs. 229,

675. As such the complainant too has not approached this office with clean hands; hence no interference with decision of RCIT for selection of his return for audit is warranted.

23. It is recommended that the Commissioner

(i) to ensure completion of enquiry into the loss of original return, from the file within 90 days and take action under relevant rules against all those found guilty of substituting the original return C with another one: (ii) to ensure that the Taxation Officer having jurisdiction over the complainant's case proceeds to conduct the audit in accordance with law. C.M.A./653/FTO Order accordingly.