1985 PLP (Trib (PTD)

FARHAT ALI KHAN (MEMBER).‑.These nine departmental appeals are directed against the order of learned A. A. C. recorded by him on 28‑5‑1981 in income‑tax Appeals Nos. 2804 to 2812/ H.

2. The brief facts giving rise to these appeals are that the respondent, an individual, purchased a plot of land bearing No. 8 of Unit No.

8. L . . . . . H . . . . . on 19th April, 1969 for a consideration of Rs. 1,47,

859. Subsequently, on 6‑1‑1970 she entered into an agreement with Messrs . . . . M. D . . . . . and Company in 1910, whereby the latter were authorised to raise superstructure on aforesaid plot of land and let out its shop built thereon. It was further agreed that aforesaid Messrs M ...D & Co. would pay rent to the respondent. For the assessment years 1971‑72 to 1979‑80 the respondent filed her return showing her income from afore said plot of land. However, on 5th November, 1980, a notice was issued to her under section 65 of the Income‑tax Ordinance (hereinafter referred to as ("the Ordinance") for re‑opening of the assessments for afore said nine years, on the ground that she was the owner of the superstructure as well and had been concealing her income. She offered her explanation but it was found unsatisfactory by the I.‑T. O. who held that she was the owner of the plot as well as the superstructure and that the alleged agree ment, dated 6th January, 1970 was made with the sole purpose of avoiding proper incidence of taxation. Accordingly the income from super structure of the building known as J . . . . C . . . . . M . . . in L ..was assessed in her hands. Moreover, penalty proceedings under section 111 of the Ordinance were also initiated for concealment of the income. She felt very mush aggrieved and went up in appeal. Elaborate arguments were advanced by the learned counsel for the respondent before the learned A. A. C. which were fortified by number of authorities cited at the Bar and it was urged that firstly, the entire proceedings were time‑barred : secondly, it was the case of change of opinion ; and thirdly that, in any case the I.‑T. O. fell in error in drawing wrong inferences from the facts which were already existing on record. The I.-T. O. also made his representa tion before the [earned A. A. C. and cited a number of authorities in support of his assessment order. The learned A. A. C. by a detailed and well -reasoned order upheld all the three submissions of the respondent and allowed the appeals, and cancelled the assessment orders. This time the department felt aggrieved and has come up in appeal before the Tribunal.

3. Mr. Muhammad Farid the learned D. R. appearing before us firstly adopted the reasoning advanced by the I.‑T. O. in his assessment order. Subsequently, learned D. R. submitted that neither proceedings before the I‑T. O. were time‑barred nor it was a case of change of opinion nor that of drawing wrong inferences. In support of his first contention Mr. Muhammad Farid referred to section 65 of the Ordinance. In order to fortify his submissions regarding change of opinion, he invited our attention to (1965) 11 Taxation 296 (Pak. S C) regarding his plea about wrong inferences. Mr. Muhammad Farid supported the I.‑T O. on the ground that be drew the correct inference from the material available on record. Mr. I. N. Pasha the learned counsel for the res submissions advanced before the I‑T. O. In support of his contention regarding point of limitation he heavily relied upon J. P. Joni v. Yadu Prasad Dey Shanker Bhatt (1969) 72 Taxation 595 (Indian S C) and Agarwal Brothers v. I.‑T. O. (1971) 70 I T R 101). In support of his contentions regarding change of opinion the learned counsel referred to two decisions of this Tribunal recorded in S. T. A. No. 6/KB/1915‑76 dated 18‑1‑1978 and in I. T. As. Nos. 1D81 to 1591/KB/1980‑81, dated 12th, June, 1984. The learned counsel also relied upon (1966) 14 Taxation

161. Regarding his argument about wrong inference the learned counsel relied upon C. B. Rs. Circular No. 14 of 1959, dated 10th August, 1959.

5. We have heard both the learned D. R. as well the learned counsel for the respondent at length and have also carefully gone, through impugned as well as assessment orders. To start with the plea of limitation, the sub mission of Mr. I. N. Pasha the learned counsel for the respondent is that the proceedings before the I.‑T. O. were time‑barred because the limitation period as provided by section 34 of the repealed Income‑tax Act (hereinafter referred to as "the Act"), had already expired when the Ordinance was promulgated. Before entering into the merits of his submissions it would be appropriate if we reproduce the relevant provisions of section 34 of the Act, and section 65 and section 166 of the Ordinance. Section 34 reads "

34. Income escaping assessment.‑(1) If for any reason income, profits or gains chargeable to income‑tax have escaped assessment in any year, or have been under‑assessed, or have been assessed at too low rate or have been the subject of excessive relief or refund or the total world income and the tax payable has been determined under subsection (1) of section 23 the I.‑T. O. may serve on the person liable to pay tax on such income profits or gain!, or in the case of a company on the principal officer thereof, a notice containing all or any of the requirements which. may be included in a notice under subsection (2) of section 22, and may proceed to assessee or to re‑assessee such income, profits or gains, and the provisions of this Act, shall so far as may be, apply accordingly as if the notice were a notice issued under that subsection : Provided that the tax shall be charged at the rate at which it would have been charged had the income, profits or gains not escaped assessment or full assessment, as the case may be Provided further that except in case in which an order has been made under subsection (1) of section 23 unless definite information has come into his possession the I. T. O. shall not initiate proceedings under this subsection without obtaining the previous approval of the Inspecting Assistant Commissioner of Income‑tax in writing. (1‑A) Notice under subsection (1) may be served by the Income‑tax Officer :‑ (a) in any case in which he has reason to believe that assessee or any other person on his behalf has not filed any return under subsection (1) or subsection (2) of section 22 at any time (a) in any case in which he has reason to believe that ‑ the assessee has for any year concealed the particulars of his income or deliberately furnished in accurate particulars thereof or omitted or failed to disclose all material fats necessary for assessment for sue k years, within six years from the end of the year in which the assessment for such year was first made and where no assessment has been made within six years from the end of the last year in which assessment for such year could be made, had clause (c) been applicable to such case : Provided that in case where a fresh assessment is made for, any year in pursuance of an order under section 31, section 33, section 33‑A or section 34‑A the period of six years referred to in this clause shall commence from the end of the year in which the fresh assessment is made ; (c) in any other case, within four years from the end of the year for which assessment is to be made. (2) No order of assessment under section 23 or assessment or re‑assessment under subsection (1) of this section shall be made after the expiry, except in any case in which the assessee has not filed any return under subsection (1) ‑ or subsection (2) of section 22 or concealed the particulars of his income or deliberately furnished incorrect particulars of such income or omitted or failed to disclose all material facts necessary for the assessment for that year, or two yeas from the end of the year in which the income, profits or gains were first assessable : Provided that :‑‑ (i) this subsection shall have effect as if for the words "two years" (a) in relation to the income, profits or gains which were first assessable in the year 1964‑65, the words "six years" were substituted ; and (b) in relation to the income, profits or gains which were first assessable in the year 1965‑66, the words "five years" were substituted : . (ii) where a notice under subsection (1) was issued, within the time‑limit specified in subsection (l‑A) the assessment or re‑assessment, as the case may be, may be made in pursuance of such notice with one year from the end of the year in which such notice was served. (iii) Nothing contained in this section limiting the time within which any action may be taken or any order, assessment or, re‑assessment may be made, shall apply to an assessment or reassessment as the case may be, made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 31, section 33, section 33‑A, section 34‑A, section 66 or section 66‑A or in the case of a firm to an assessment made on a partner of the firm in consequence of an assessment made on the firm under this section : (c) in relation to the income, profits or gains which were first assessable in the year 1966‑67, the words "five years" were substituted where the assessment or re‑assessment, as the case may be relates to an assessee under the jurisdiction of an Income‑tax Officer having his office in the Province of East Pakistan. Explanation I.‑Where by an order under section 31, 33; 33‑A, 34‑A, 66 or 66‑A, any income is excluded from the total income of the assessee for an assessment year, an assessment of such income for another assess ment year shall, for purposes of this section be deemed to be one made in consequence or to give effect to any finding or direction contained in the said order. Explanation II.‑Where by an order under sections 31, 33, 33‑A, 34‑A, 66 or 66‑A any income is excluded from the total income of .one person and held to be the income of another person, an assessment of such income on such other person shall for purposes of this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order :‑ (iv) nothing contained in this section limiting the time within which any action may be taken or any order, assessment or re‑assessment may be made, shall apply to an assessment or re‑assessment, as the case maybe made on any person in conformity with a 'decision of the Supreme Court in any case under section 66‑A or Article 185 of the Constitution :‑ (2‑A) A notice under subsection (1) may, where the I.‑T. O. has reason to believe that the assessee, or any other person on his behalf has not filed any return under subsection (1) or subsection (1) of section 22 or concealed the particulars of his income or deliberately furnished in accurate particulars thereof, or omitted or failed to disclose all material facts necessary for the assessment for that year be issued at any time notwithstanding that at the time of the issue of such notice the period specified in subsections (1), (1‑A) and (2) before its amend ment had expired and no assessment or re‑assessment made or any other proceeding taken in consequence of such notice or any assess ment or re‑assessment made under subsection (2‑B) or any other proceeding taken in consequence of any notice issued for that purpose shall be called in question to any Court, tribunal or other authority merely on the ground that at the time the notice was issued or at the time the assessment or re‑assessment was made, the time within which such notice should have been issued or the assessment or the re‑assessment should have been made under this section as in force before its amendment, bad expired : Provided that no notice under subsection (1) shall be issued in respect of income profit and gains which were received or are deemed to have been received or which accrued or arose or are deemed to have accrued or arisen to an assessee before the fourteenth day of August, 1947. (B) Notwithstanding any, thing in subsections (1) and (2) limiting the time within which any notice may be issued or any assessment or reassessment made or any action taken such notice may be issued assessment or re‑assessment made or action taken as respects the assessment (including re‑assessment) for any year ending at any time between the thirty‑first day of March, 1955 and the thirtieth day of June, 1965 (both days inclusive) on or before the thirtieth day of June, 1971 ; The relevant provisions of section 65 as they stood on the date of impugned order are as reproduced hereunder :‑ "

65. Additional assessment.‑(1) If, in any year for any reason,‑ (a) any income chargeable to tax under this Ordinance has escaped assessment ; or (b) the total income of an assessee has been under‑assessed or assessed at too low a rate, or has been the subject of excessive relief or refund under this Ordinance : OR (c) to total income of an assessee or the tax payable by him has been determined under subsection (1) of section 59 and no order of assessment has subsequently been made under this section or any other provision of this Ordinance. The I.‑T. O. may at any time, subject to the provisions of subsections (2), (3) and (4) issue a notice to the assessee containing all or any of the requirements of a notice under section 56 or section 58 and may proceed to assessee or determine, by an order in writing, the total income of the assessee or the tax payable by him, as the case may be, and all the provisions of this Ordinance shall, so far as may be apply accordingly. Provided that the tax shall be charged at the rate or rates applicable to the assessment year for which the assessment is made. (2) No proceedings under subsection (1) shall be initiated unless definite information has come into the, possession of the I.‑T. O. or he has obtained the previous approval of the Inspecting .Assistant Commis sioner of Income‑tax in writing' to do so. (3) No order under subsection' (1) shall be made in respect of any income year after the expiration of ten years from the end of the assessment year in which the total income was first assessable. The relevant provisions of section 166 of the Ordinance, are as under :‑ "

166. Repeal and savings.‑(1) The Income‑tax Act, 1922 (XI of 1922) is hereby repealed. (2) Notwithstanding the repeal of the Income‑tax Act, 1922 (XI of 1922) and without prejudice to the provisions of section 6 or section 24 of the General Clauses Act, 1897 (X of 1897). (a) . . . . . . . . . . (b) . . . . . . . . . . (c) where in respect of any assessment year :‑ (i) a notice under section 34 of the repealed Act bad been issued before the commencement of this Ordinance, the proceeding in pursuance of such notice may be continued and disposed of as if this Ordinance had not come into force ; (ii) any income chargeable to tax had escaped assessment or had been under‑assessed or assessed at too low a rate, or had been the subject of excessive relief or refund or the total income or the total world income and the tax payable had been determined under subsection (1) of section 23 of the repealed Act and no proceedings under section 34 of the said Act in respect of any such income are pending at the commencement of this Ordinance a notice under section 65 may be issued with respect to that assessment year and all the provisions of this Ordinance shall apply accordingly ;

6. Since Mr. Pasha has very heavily relied upon Jani's case (supra), we think that the provisions of sections 34(I), 297(2)(d)(i), (ii) and 149 of Indian Income‑tax Act, 1961 may also be reproduced here for case of reference. Section 34 reads as under :‑ "34. (1) If :‑ (a) the I: T. O. has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all ‑ material facts necessary for his assessment for that year, income profits or gains chargeable to income‑tax have escaped assessment for that year, or have been under‑assessed or assessed at too low a rate, or have been made the subject of excessive relief under the Act or excessive loss or depreciation allowance has been computed. OR (b) notwithstanding that there. has been no omission or failure as mentioned in clause (a) on the part of the assessee, the I: T. O. has in consequence of information in his possession reason to believe that income profits or gains chargeable to income‑tax have escaped assess ment for any year, or have been under‑assessed or assessed at too low a rate or have been made the subject or excessive relief under this Act, or that excessive loss or depreciation allowance has been computed he may in cases falling under clause (a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of that year serve on the assessee, or, if the assessee is a company on the principal office thereof, a notice containing all or any of the requirement which may be included in a notice under subsection (2) of section 22 and may proceed to assessee or re‑assessee such income profits or gains or recompute the loss or depreciation allowance and the provisions of this Act shall so far as may be apply accordingly as if the notice were a notice issued under that subsection : Provided that :- (i) the I.‑T. O. shall not issue a notice under this subsection, unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons recorded that it is a fit case for the issue of such notice : . Provided that further that nothing contained in this section limiting the time within which any action may be taken or any order, assessment or re‑assessment may be made shall apply to a re‑assessment made under section 27 or to an assessment or re‑assessment made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 31, section 33 section 33‑A, section 33‑B, section 66 or section 66‑A." The contents of sections 297(2)(d)(i) and (ii) are as follows :‑ "

297. Repeals and Savings.‑(1) . . . (2) Notwithstanding the repeal of the Indian Income‑tax Act, 1922 (II of 1922) (hereinafter referred to as the repealed Act) . . . . . (d) where in respect of any assessment year after the year ending on the 31st day of March, 1940. (i) a notice under section 34 of the repealed Act had been issued before the commencement of this Act, the proceedings in pursuance of such notice may be continued and disposed of as if this Act had not been passed ; (ii) any income chargeable to tax had escaped assessment within the meaning of that expression in section 147 and no proceedings under section 34 of the repealed Act in respect of any such income are pending at the commencement of this Act, a notice under section 148 may, subject to the provisions contained in section 149 or section 150, be issued with respect to that assessment year and all the provisions of this Act shall apply accordingly. Section 149 is reproduced hereinbelow :‑ "

149. Time limit for notice.‑‑(1) No notice under section 148 shall be issued.‑ (a) in case falling under clause (a) of section 147‑ (i) for the relevant assessment year, if eight years have elapsed from the end of that year, unless the case falls under sub‑clause (ii) (ii) for the relevant assessment year, where eight years but not more than sixteen year, have elapsed from the end of that year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year ; . . . . ."

7. Now turning to Jani's case, it appears that the respondent of that case was assessed on 31st January, 1952, for the assessment year 1947‑

48. However, subsequently it transpired to the Income‑tax Officer that one N was Benamidar of 'the respondent and his income belonged to the respondent. Since the respondent had not disclosed this income in his hand, the I.‑T. O. issued notice on 2ith March, 1956 to him under section 34(l)(a) of the Indian Income‑tax Act, 1922 with prior approval of the Commissioner of Income -tax. On 16‑1‑1957 return was filed under protest on the ground that proper service was not affected. The total income was however assessed at Rs. 89,001 on 29‑3‑1957. But an appeal was filed which, was allowed on 5‑1‑1963 on the ground that no valid notice was served. Meanwhile on 1‑4‑1962 the new Act had come into force and acting under its section 147(a) a notice was issued on 4‑1‑1963. Subsequently another notice under section 148 was issued on 13‑11‑1963 and it was followed by yet another notice issued under section 142(1) of the new Act. Thus, the question which finally came on the anvil of the Indian Supreme Court was, whether an assessment having become time‑barred under the Act could be re‑opened under the new Act ? Let us point out that it was conceded before their Lordships that the assessment for the year 1947‑48 had become time‑barred when the new Act came into force. Nevertheless. relying upon section 297(2)(d) of the new Act it was argued that assessment for any year after 31‑3‑1940 could be re‑opened. Their Lordships of the Indian Supreme Court, after analysing the provisions of sections 34, 296(2)(d)(i) and (ii) and 149, made the following remarks :‑ "In our opinion, it is not permissible to construe section 297(2)(d)(ii) of the new Act as reviving the right of the I.‑T. O. to re‑open the assessment which was already barred under the old Act. The reason is that such a construction of section 297 (2)(d)(ii) would be tantamount to giving of retrospective operation of that section which is not warranted either by the express language of the section or by necessary implication. The principle is based on the well‑known rule of interpretation that unless the terms of the statute expressly so provide or unless there is a necessary implication, retrospective opera tion should not be given to the statute so as to affect, alter or destroy any right already acquired or to revive any remedy already lost by efflux of time . . . . . In our view the new statute does not disclose in express terms or by necessary implication that there was a revival of the right of the I.‑T. O. to re‑open an assessment which was already barred under the old Act."

8. With due respect to their Lordships, we respectfully agree with their observations. However, when we return to section 65 as it then stood, read with section 166(2)(c)(ii) of the Ordinance the position does not appear to be the same as emerges out from the construction of the relevant provisions of new Indian Income‑tax Act, as discussed by their Lordships. In subsection (1) of section 65 of the Ordinance it was laid down specifically that an Income‑tax Officer could issue a notice subject to the provisions of subsection (3) of the same section. When we turn to subsection (3) of section 65 it appears that it is a total departure from its Indian counterpart. It is true that section 149 of Indian new Act and subsection (3) of section 65 of Pakistan Income‑tax Ordinance are couched in negative language, It is also true that both sections are placing an embargo on the powers of Income‑tax Officer. But Indian Provision prohibits issuance of notice under certain conditions. Whereas in Pakistan an embargo has been imposed on the powers of I.‑T. O. regarding making an order under subsection (1) of section 65 of the Ordinance, as it then stood under certain circumstances. Here let us point out that in India the fresh assessment regarding escaped income is done under section 34 of the new Act but in Pakistan it was section 65(1) of the Ordinance which dealt with the issue when read with subsection (3) of section 65 as it then stood. Again, it is important to note that neither section 297(2) nor section 149 of the Indian new Act has referred to the power of I.‑T. O. regarding framing of assessment of escaped income within certain period of time. On the contrary section 16(c)(ii) read with subsection (3) of section 65, as it then stood, laid down specifically that no order regarding escaped income would we made after the expiration of ten years from the end of the assessment year in which the total income was first assessable. Thus, Jani's cast' (supra) with due respect to Mr. Pasha, would not be an authority regarding period of limitation about assessment of escaped income before the expiration of ten years from the end of the assessment year in which the total income was first assessable. When it is said that no order after expiry of ten years would be made it a means and implies out of logical necessity that an order could be made within ten years. If no order can be recorded within ten years how could it be not recorded after ten years. If (here is no power there can't be prohibition against it. We are, therefore, of the view that when the Legislature has specifically, stretched the provisions of section 65 as far back as ten years from the date of the commencement of the Ordinance for the purposes of section 65, we are left with no alternative but to hold that the Legislature has expressly or ' in any case, by necessary implication made the provisions of section 651, retrospective. We think that all the income years which are within the span! of ten years from the date of the commencement of the Ordinance fell within the ambit of section 65 of the Ordinance irrespective of the fact that a person had or had not filed his return earlier or that he was either assessed under section 23(1) or 23(3) of the repealed Act. Thus, whatever be the circumstances the I.‑T. O. was left with no jurisdiction to frame an assessment' under section 65(i) of the Ordinance after ten years from the end of the' assessment year in which the total income was first assessable. Let us point' out here that the use of expression "first assessable is of much significance. But on the contrary the principle, which has been enunciated by Indian' Supreme Court in Jani's case (supra) is very much distinguishable for the reason that the provisions of Indian Income‑tax Act as construed by their's Lordships are different and do not convey an intention by express language of by necessary implication that provisions of section 297(2)(d)(ii) of the' new Act were retrospective in nature. In view of this interpretation we think, with due respect to the learned A. A. C. that his finding regarding Limitation is not sustainable in law. Let us once again mention here, even at the cost of repetition, that the notice under section 65 was issued on 5‑11‑1980 to the respondent for assessment years 1971‑72 till 1979‑80 the assessment for which had already been framed. As far as Agarwal Brother's case (supra) is concerned. Their Lordships of Allahabad High Court have relied upon Jani's case (supra) of the Indian Supreme Court. As such, we refrain to dilate upon this authority any more. ,

9. Now before reverting to other issue let us point out that the Finance Ordinance of 1982 introduced some amendments in section 65, subsections (1) and (2) remained as they were on the date of the impugned order but subsection (3) was substituted as under :‑ "(3) Notice under subsection (1) in respect of any income year may be issued within ten years from the end of tae assessment year in which the total income of the said income year was first assessable." Similarly subsection (3‑A) was inserted in 1982 and subsection (4) was substituted in 1980. Again an amendment was made in subsection (3‑A) by the Finance Ordinance of 1984. Now subsections (3‑A) and (4) read as under:‑ "(3‑A) Where a notice under subsection (1) is issued, on or after the first day ooi' July, 1982 no order under the said subsection shall be made after the expiration of one year from the end f the financial year in which such notice was served :‑ (4)Nothing contained in subsection (2) shall app y to any such case or class cat cases to which clause (c) of subsection (1) applies as may be specified by the Central Board of Revenue ;‑‑‑‑ Let us point out that even if we apply the law as it stands to day, in our judgment it makes no difference. From their bare perusal it appears that section 149 of the new Indian Act is couched in negative terms but, on the contrary, subsection (3) of section 65 of Pakistan Income‑tax Ordinance, as it stands now, has been enacted in enabling language. It further appears that former is placing an embargo on the powers of I. T.O. If Indian provision prohibits issuance of notice under certain conditions its Pakistani counterpart indeed widens the scope of the powers of Income‑tax Office regarding issuance of notice under subsection (d) of section 65 of the Ordinance under certain circumstances. Again, it is important to note that neither section 297(2) nor section 149 of the Indian new Act has enlarged the power of I.‑T. O. vis‑a‑vis issuance of notice about escaped income than previously prescribed period of time. On the other hand, subsection (3) when read with subsection (1) of section 65 of the Pakistan Income‑tax Ordinance lays down specifically that an I. T. O. may issue notice about, escaped income within 10 years from the end of the assessment year in which the total income was first assessable. On top of all this, if subsection (3) of section 65 as it stands today, is read in context of and with reference to subsections (1‑A) and (2‑A) of section 34 of the repealed Pakistan Act, the legislative intent emerges out to the surface in quite unambiguous and unmistakable terms. Now the fact as to whether a case of an assessee falls under sub section (1) or 1(A) or 2(A) makes no difference. It is now obvious that Legislature has taken something from assessee it has also given him something in return, namely total immunity from re‑opening of the assessment after 10 years. Thus whatever view is taken Jani's case (supra), in our. Judgment is not applicable in Pakistan. Let us also mention here that our own Supreme Court in C, I.T. v. Eastren Fedreal Union Insurance Co (PLD1981S), has also followed the same principle of law as enunciated by Indian Supreme Court in Jani's case (supra). But with due respect it also revolves round its own facts and it has been repeatedly emphasised in the judgment itself: In this case fresh assessment under section 14 of the Business Profit Tax Act (1957) has become time‑barred on 31‑12‑1956 after expiry of four year. However, subsequently section 34 of the repealed Income‑tax was made applicable and thu3 the period of limitation was extended to six year and expired on 31‑11‑1958. It is pertinent to note here that the Central Board of Revenue; which has made section 34 of the repealed Income‑tax Act applicable has specifically made it retrospectively operative from 1‑4‑1957 and on appeal it was held by this tribunal that it was not retrospective because the Central Board of Revenue had no jurisdiction to make it so. Both the High Court and Supreme Court upheld this finding of the Tribunal. In the instant case, however, the point involved is whether the Legislature ‑is competent to take away vested right, it' any by making a law retrospective in operations either by express provisions of law or by necessary implication. It may be noted that in Crescent Board Ltd. v. I.‑T. O. (1985 P T D 276), although the point involved was not the same but observations of their Lordships regarding interpreta tion of section 65 may be reproduced here with advantage. Their Lordships observed :‑ "

2. Section 65 of the Income‑tax Ordinance, 1979, dealing with 'additional assessment' was in effect a machinery provision authorizing an I. T. O. to take steps to determine the total income of an assessee or the tax payable by him, as may have escaped assessment earlier. It could have been done by issuance of a notice under subsection (1) of section 65, and before the amendment the maximum period fixed for passing orders in any such exercise was 10 years from the end of the assessment year in which, the income was first assessable. In other words hitherto the issuance of the notice as such did not specifically attract to itself any limitation. , The ceiling of 10 years was in fact fixed only for finalizing such proceedings. Conversely, neither the notice could be issued nor orders could be passed beyond this period of 10 years." At this stage let us mention that if any case comes nearest to the problem under discussion, it is Kassim Haji 'Abbas Patel v. I.-T. O. (1982 P T D 361). In this case notice under section 65 of the Income‑tax Ordinance, was issued on 10‑12‑1979 whereby the assessments of assessment years 1968‑69 to 1978‑79 were sought to be re‑opened. Before a learned Division Bench of Karachi High Court it was firstly argued that the assessments could not be re‑opened a: the limitation provided under section 34(2) of the Income‑tax Act, 19.2 had already expired several years ago, but alternatively it was also canvassed before the learned Judges that under section 65 of 1979 Ordinance the assessment could not be re‑opened after the expiry of 10 years from the assessment year in which the total income was assessable. Referring to the alternative arguments their Lordships made the pertinent observation as follows :‑ "It is, therefore, clear that if there was, any under declaration of the value and consequent concealment of income it related to the assess ment year 1968‑6y and since notice was issued on 10‑12‑1979. It was beyond ten years from the year of assessment and, therefore, it could not be re‑opened, being barred by time." We should keep in mind that this constitutional petition was decided on 5‑4‑1982 while subsection (3) of section 65 was substituted latter by the Finance Ordinance of 1962.

10. Now turning to the question of change of opinion, it transpires to us that the I: T. O. issued notice on 5th November 1980 to the respondent because: (1) the husband of the respondent had stated that construction of the building started in 1969. (2) the Balance Sheet of M . D . . . & Co. did not show any expenditure on building till 31st March 1970. (3) the respondent had moved an application to United Bank Ltd. for loan of Rs. 4,00,000. (4) the respondent had moved an application for transfer of property certificate on 3rd December, 1979. (5) the respondent had moved an application on 12th September, 1970 to the Secretary, L . . . . . S . . . . . (6) certain copies of the unsigned lease agreement were available to L‑T. O.

11. The learned A. A. C. has observed in his order that all the material facts were discussed in the assessment orders of the relevant years. He has further referred to the assessment order for charge year 1973‑74 in which question regarding ownership of the construction was further raised and decided. However, he has nowhere mentioned that five points, mentioned above, were considered by predecessor of I.-T. O. in any of the previous assessment years. Thus, it appears to be quite clear that the I.‑T. O. had available to him some more facts which came to his notice subsequently. In any case, statement of Mr. M . . . . . D the husband of the respondent was relied upon by the I.‑T. O. This statement was recorded on 19th June, 1980. Naturally it might not have been available to the previous I.‑T. O. As such with due respect to the learned counsel for the respondent we are of the view that the I: T. O. was right in issuing the notice under section 65 on the basis of additional material which come to his knowledge and which was apparently not considered by his predecessors. If on I.‑T. O. arrives at conclusion 'E' after due enquiry on the basis of the fact A, B, C, D, made available to him his successor cannot come to conclusion 'F' if the facts A, B, C, D, remain unchanged. If, he does so, this would be case of change of opinion and his order would not be upheld. However, if he comes to conclusion 'F' because additional facts 'X' and ' Y' were brought to his notice, on top of fact A, B, C, D, which were made, available to his predecessor, he would be justified in issuing notice " under section

65. This is the principle of law emerging from the two decisions of this Tribunal (supra) cited by Mr. Pasha and of course from the judgment of a Division Bench of K . . . . . High Court in Abdullah's case (supra). Since the learned A. A. C. has not mentioned and: where in his order that the five points, reproduced above were considered by the I.‑T. O's. predecessor he had before him additional material and, as such was in our opinion justified in issuing notice under section

65. WL therefore, again disagree with the learned A. A. C. As far as the authority cited by Mr. M. Fried is concerned with due respect to him, we do not think that it is an authority on principle of law regarding change of opinion.

12. Now coming to the submission of learned counsel for the respondent regarding wrong inferences drawn by the I.‑T. O. we find considerable force in them. As far as the statement of the husband of the respondent is concerned, we do not think that it helps in any way the I.‑T. O. to come to the conclusion that the superstructure standing on the plot actually belonged to the respondent. He has himself mentioned that in the Balance Sheet it is shown that on 31‑3‑1970 the respondent was owing Rs. 2,50,000 to Messrs M . . . D . . . & Co She had purchased aforesaid plot of land on 19th April, 1969 and had paid Rs. 1,13,

738. Subsequently, on 1st July, 1969 she paid Rs. 34,111 towards the consideration of the plot. Thus, she paid Rs. 1,47,859 in all. Admittedly, this money was given to her by Messrs M .. D . . . . . & Co. Now, if the construction started in 1969, as stated by her husband, it does not mean that she had no money for that purpose. The inference drawn by the I. T. O., therefore, is not sustainable. For the same reason his second inference drawn from the Balance Sheet of Messrs M . . . . . D & Co., dated 31st March, 1970 has no legs to stand upon. Since Messrs M . . . . . D . . . . . & Co. had spent no money on the construction of the building, therefore, no amount was shown to have been spent. The interference drawn by the I. T. O. from the loan application, from transfer of property certificate and application to Society are also not sustainable in law for the simple reason that at nowhere the respondent had shown herself to be the owner of the superstructure as well. She has taken all the steps in her capacity as the owner of the plot. Now as far as the alleged copies of the unsigned lease agreement are concerned, the learned A. A. C. in our view has rightly observed that they were mere drafts and were neither executed nor otherwise acted upon. Thus, we respectfully agree with the learned A, A. C. that the I: T. O. drew erroneous inference from the material on record. We, therefore, upheld the finding of learned A. A. C. that the respondent was owner of the plot of the land only and was correctly assessed in the relevant assessment years.

13. To conclude, we find no force in these departmental appeals. The order of learned A. A. C. is hereby confirmed for the reasons discussed above. M. B. A. Appeals dismissed.