1988 PLP (Trib (PTD)

2nd 1980-81 7th April 1982 Rs.1,45,612 Highest income Rs.1,45,610 Add:20% for immunity from detailed scrutiny. Rs. 29,122 Rs. 1,74,732 Income for assessment year 1982-83 declared. Rs.2,38,850 Return of total income for the assessment year 1982-83 alongwith the following: - (i) Computation of income and tax liability for the income year ended 30th June, 1982, (ii) Statement of assets and liabilities as at 30th June, 1982, On the basis of these documents tax liability comes to Rs.8,695 which may be kindly set off against the excess deposit of tax in the case of the firm as requested. Return of total income for the assessment year 1982-83 alongwith the following: - (i) Computation of income and tax liability for the income year ended 30th June, 1982. (ii) Statement of assets and liabilities as at 30th June, 1982. On the basis of these documents tax liability comes to Rs.8,695 which may kindly be set off against the excess payment of tax in the case of the firm. Return of income and tax for the assessment year 1982-83 alongwith the following:- (i) Computation of income and tax liability for the income year ended 30th June, 1982. (ii) Statement of assets and liabilities as at 30th June, 1982. On the basis of these documents the amount of liability in Pakistan comes to Rs.13,499 which may kindly be set off against the excess payment made in respect of the firm to the extent of Rs.11,

921. We enclose photo copy of receipted challan dated 10th October, 1982 for Rs.1,578 being the amount of tax payable after the adjustment as requested. Return of total income for the assessment year 1982-83 alongwith the following: - (i) Computation of total income and tax liability for the income year ended 30th June, 1982. (ii) Statement of assets and liability as at 30th June, 1982. On the basis of documents the amount of tax liability in Pakistan comes to Rs.20,119 which may kindly be set off against the excess payment made in respect of the firm to the extent of Rs.11,

921. We enclose photo copy of receipted challan dated 10th October, 1982 for Rs.8,125 being the amount of tax payable after adjustment as requested. We shall be pleased to provide you any information you may require to finalize the assessment."

6. From the content of the above letter, it is abundantly clear that alongwith return in the case of AA Kay Enterprises, Rawalpindi, the assessee had also filed his return for the charge year 1982-83, accompanied by computation of income and tax payable thereon. There is also no doubt that before finalization of assessment in the case of AA Kay Enterprises, Rawalpindi, the assessee requested for an adjustment of Rs.11,921 against demand to the extent of Rs.13,499 payable by him for the charge year 1982-83. In fact, after adjusting a sum of Rs.11,921, which represented assessee's share of refund against disclosed income in the case of A A Kay Enterprises, Rawalpindi, he further paid a sum of Rs.1,578 so as to completely discharge his dues. This part of the evidence, which was before the Income Tax Officer, was not even examined by him much less recording a finding on it. Even learned AAC overlooked this important piece of evidence and consequently, fell into an error in again remitting this matter for consideration by the Income Tax Officer. As learned DR on behalf of the department, has not controverted the fact that the assessee was entitled to a refund of Rs.11,921 on the basis of assessment in the case of A A Kay Enterprises, Rawalpindi, the assessee was entitled to an adjustment of a sum of Rs.11,921 for the charge year 1982-83. And after paying a sum of Rs.1,578 nothing was due from him on the basis of returned income for the charge year 1982-83.

7. Since on the basis of evidence made available before me, the assessee had discharged his admitted liability of income tax, there was no justification with the Income Tax Officer to have imposed additional tax on the assessee. This point was agitated before learned AAC who through an oversight did not pass an order on it. Therefore, on this point, assessment is set aside and the case is remitted to learned A AC with a direction that he should pass an order on the foregoing objection of the assessee in accordance with law.

8. Finally, I also agree with the legal objection raised by learned counsel of the assessee that the Income Tax Officer, committed an error in imposing surcharge at the rate of 10$ on the amount of the alleged tax, notwithstanding the fact that by virtue of the Finance Ordinance, 1982, it was not leviable on taxable income below Rs.1,00,

000. In this connection, I have with advantage relied on an amendment brought in the First Schedule to the Ordinance vide paragraph B, which is incorporated below:- The original para B was as follows:

"B. In the case of every Ten per cent of person other than the income tax company: and super tax. Provided that nothing in this paragraph shall apply in the case of an individual whose taxable income is less than Rs.1,00,000." The figure 50,000 was substituted by the Finance Ordinance, 1982, w.e.f. assessment year 1982-83. (Complete Income Tax Law 1986-87 Edition by S.A. Salam).

9. Since assessed income of the assessee was Rs.69,026, he was not liable to surcharge at the rate of 10% w.e.f. assessment year 1982-83 on account of an amendment brought in paragraph B of the First Schedule to the Ordinance. As a positive finding could have been recorded on this point by learned A AC , he also fell into an error in again remitting the case to the Income Tax Officer for having a second look on it. I only wish that he could have discharged his duty by giving a positive finding on it. Since he did not do so, it is ordered accordingly.

10. Appeal filed by the assessee succeeds to the extent and in the manner indicated above. M. B. A. /442/T Order accordingly.