Re-assessment

Applicant / taxpayer was aggrieved of order passed by Appellate Tribunal Inland Revenue in holding that all shares of applicant / taxpayer were held by a non-resident company, therefore, it did not fulfill the requirements for the transaction to fall within the ambit of S.97 of Income Tax Ordinance, 2001

Validity

What is taxable in terms of S.4 read with Ss.9 and 11 of Income Tax Ordinance, 2001 and other related provisions, is the income of a taxpayer

Provision of Ss. 113 and 113C of Income Tax Ordinance, 2001 are exceptions to the rule that only income as determined in accordance with provisions of Income Tax Ordinance, 2001 can be subjected to tax

Provisions of Ss. 113 and 113C of Income Tax Ordinance, 2001 are in the nature of deeming provisions, where under S.113 of Income Tax Ordinance, 2001 turnover of a taxpayer is used as a measure to determine tax liability on a deeming basis, and under S.113C of Income Tax Ordinance, 2001 the accounting income of a taxpayer is used as a measure to determine tax liability on a deeming basis

As such Ss.113 and 113C of Income Tax Ordinance, 2001 are artificial rules that impose a liability on a taxpayer to pay tax even where no real income arise in the hands of the taxpayer

Taxpayer under S.113C of Income Tax Ordinance, 2001 is accordingly liable to pay taxes calculated in terms of income of the company subject to tax under Division II of Part 1 of First Schedule to Income Tax Ordinance, 2001 or the minimum tax due in terms of S.113 of Income Tax Ordinance, 2001 or the alternative corporate tax determined on the basis of accounting income in terms of S.113C of Income Tax Ordinance, 2001 whichever is greater

Exclusions for the purpose of calculating Alternative Corporate Tax are mentioned in S.113C (8) of Income Tax Ordinance, 2001 and do not state that any accounting income in relation to a S.97(1) of Income Tax Ordinance, 2001 as disposal of asset transaction is required to be excluded therefrom

If it was determined by the Commissioner that applicant / taxpayer had generated income from imports in relation to which advance tax was collected in terms of S.148(1) of Income Tax Ordinance, 2001 only then the question of applicant / taxpayer being an industrial undertaking would become relevant

Applicant / taxpayer did not qualify as an industrial undertaking for purposes of tax year 2018

Transaction of disposal of tower business by applicant / taxpayer to its wholly owned subsidiary company, did not qualify for tax deferral in terms of S.97 of Income Tax Ordinance, 2001

Applicant / taxpayer did not qualify as an industrial undertaking in terms of S.2 (29C) of Income Tax Ordinance, 2001 in tax year 2018

High Court directed the Commissioner to undertake an analysis regarding advance tax collected under S.148 of Income Tax Ordinance, 2001 before generating any demand in terms of S.148(7) of Income Tax Ordinance, 2001

High Court further declared that appeals effect order passed in terms of S.124 of Income Tax Ordinance, 2001 did not include no demand in relation to S.148(7) read with S.148(1) of Income Tax Ordinance, 2001 without such prior inquiry

Reference was disposed of accordingly.

Petitioners were aggrieved of setting aside of judgment by High Court in exercise of jurisdiction under Section 12(2), C.P.C.

Validity

High Court after thoroughly deliberating upon facts and circumstances of the case had rightly accepted applications under Section 12(2), C.P.C.

It was not within the purview of Federal Constitutional Court to reassess findings of fact recorded by High Court unless it could be demonstrated that such findings were manifestly against evidence, so patently improbable that acceptance would result in a grave miscarriage of justice or if there had been any misapplication of principles related to appreciation of evidence

Petitioner failed to show that findings of High Court were physically impossible to warrant interference

Substantial burden was on the petitioner to demonstrate that the findings recorded by High Court were unsustainable on record, even if an alternative view could also be conceivable

Federal Constitutional Court declined to interfere, as petitioner failed to identify any legal, procedural, or jurisdictional error, defect, or flaw in the judgment

Petition for leave to appeal was dismissed and leave to appeal was refused.

Re-assessment of net worth of respondent/taxpayer was set aside by Appellate Tribunal Inland Revenue and the order was maintained by High Court

Validity

Re-assessment proceedings were triggered on the basis of bank statement of respondent/taxpayer

All transactions in bank account did not necessarily demonstrate income of respondent/taxpayer, unless it was established that statements and/or entries therein had disclosed information of income which was 'definite'

Banking instrument could not be applied as one having 'definite information'

Neither Commissioner nor Appellate Tribunal Inland Revenue and High Court were of the view that all credit entries in statement of account disclosed income of respondent/taxpayer hence it did not constitute 'definite information'

Appellate Tribunal Inland Revenue was the last fact finding forum and such question could neither be raised in reference jurisdiction of High Court nor before Supreme Court

Supreme Court declined to interfere with judgment of High Court

Petition for leave to appeal was dismissed and leave to appeal was refused.

Re-assessment of net worth of respondent/taxpayer was set aside by Appellate Tribunal Inland Revenue and the order was maintained by High Court

Validity

Re-assessment proceedings were triggered on the basis of bank statement of respondent/taxpayer

All transactions in bank account did not necessarily demonstrate income of respondent/taxpayer, unless it was established that statements and/or entries therein had disclosed information of income which was 'definite'

Banking instrument could not be applied as one having 'definite information'

Neither Commissioner nor Appellate Tribunal Inland Revenue and High Court were of the view that all credit entries in statement of account disclosed income of respondent/taxpayer hence it did not constitute 'definite information'

Appellate Tribunal Inland Revenue was the last fact finding forum and such question could neither be raised in reference jurisdiction of High Court nor before Supreme Court

Supreme Court declined to interfere with judgment of High Court

Petition for leave to appeal was dismissed and leave to appeal was refused.

Acquirer (National Highway Authority) and land owners both preferred appeal against the order of the Referee Court; the former for dismissal of reference while the later for further enhancement of rate of compensation

Held, that though nature of land acquired from the appellants (land-owners) , as mentioned in the Award, was agricultural but said nature was only for the purpose of maintaining the record of rights as well as cultivation and the same did not mean the said land was not usable for any other purposes

Land was not to be valued merely by reference to the use to which it was being put at the time of acquisition but also by the reference to the uses to which it was reasonably capable of being put in the future in said regard the Referee Court has to keep in mind a few factors in re-assessing the compensation, however, according to the S. 23 of the Land Acquisition Act, 1894 [as amended by Khyber Pakhtunkhwa Ordinance No. XVII of 2001], firstly the rate of compensation is to be determined on the basis of market-value of the land at the date of taking possession of the land

Factors for determination of rate of compensation included (a)size and shape of the land (b) the locality and its situation (c) the nature of property, the uses, its potential value, and (d) the rise or depression in the value of the land in the locality and even in its near vicinity

No doubt that in ascertaining the value of land , the possibility of it being used for building purposes would have to be taken into account, but it was equally true that the land must not be valued as though it had already been built upon ; that is the effect of the principle embodied in 5th clause of S. 24 of the Land Acquisition Act, 1894 , which is expressed by saying that it is possibilities of the land and not its realized possibilities that must be taken into consideration

Record (report, documents, evidence etc.) revealed that the land of the appellants (land-owners) was neither situated near main road nor was built-up, thus the rate of compensation for their acquired land was fixed by the Referee Court in view of compensation of similar lands of the vicinity

No erroneous principle had been invoked by the Referee Court and no important piece of evidence had been overlooked or mis-placed or any other ground for interference in question(s) of valuation by the High Court

Appeals preferred by both the acquirer and landowners were dismissed, in circumstances.

Audit document, considering the Heading rendered by the importer, declared the subject paints based on acrylic or vinyl polymers, thus disentitling the importer from exemption under SRO 659(I)/2007 dated 03-06-2007

Held, that once goods were cleared and were out of custom charge, thereafter, no allegation against the imported goods were sustainable in the eyes of law

Appellant/Department had failed to produce evidence on basis of which audit document was created , therefore, it could be presumed that the impugned paints were based on polyamide

Contention of audit was found to be incorrect

Order-in-original, being well-reasoned and unexceptionable, was upheld

Appeal was dismissed, in circumstances.

No power to condone any delay in passing a re-assessing order beyond the period of limitation prescribed under S.122(2) of Income Tax Ordinance, 2001

Expiry of limitation period creates a vested right in taxpayer to treat tax affairs for any year predating limitation period under S.122(2) of Income Tax Ordinance, 2001, as past and closed transaction

Such vested right cannot be usurped by tax authorities directly or indirectly.

Re-assessment order in any shape / manner by all means falls within the definition of demand notice for recovery of short paid amount of duty and taxes due to commission of inadvertence by officials of Clearance Collectorate

Such type of recovery can only be created upon passing an order after issuance of show-cause notice under S.32(3) of Customs Act, 1969.

Assessing Officer instead of accepting Goods Declaration preferred to inspect the goods and found them as per Declaration

Principal Appraiser re-examined the goods and imposed additional duty and taxes on the plea of mis-declaration

Additional Collector Customs (Adjudication) passed an order to confiscate the goods subject to redemption on payment of 20% fine

Validity

Consignment which had undergone process of passing assessment order under the provision of S.80 of Customs Act, 1969, and R.438 of Customs Rules, 2001 for levy of duty and taxes, which were paid and thereafter valid clearance order as contemplated in S.83 of Customs Act, 1969, and R.442 of Customs Rules, 2001, was passed by competent authority in exercise of powers vested upon him through notification SRO No.371(I)/2002, dated 15-6-2002

Such order was appealable order and could not be disturbed by any other authority including Principal Appraiser, Assessing Officer and Additional Collector Customs (Adjudication), with the exception of preferring an appeal under the provision of S.193 of Customs Act, 1969

No mis-declaration in material particular in regard to description, quantity, weight and value of goods in question was on record

Neither provision of S.32(2) nor (3) of Customs Act, 1969, were applicable

Without any exception, there was error, omission or misconstruction, made/done by custom officers attracting under the provision of S.32(3) of Customs Act, 1969

Show cause notice could be issued by Principal Appraiser only as notified in serial No.3 (ii) of notification S.R.O. No.371(I)/2002, dated 15-6-2002 and none else

Assessing Officer wrongly created recovery / demand through re-assessment order on the direction of Principal Appraiser and Additional Collector Customs (Adjudication) passed order by usurping powers of his subordinate which was not permitted under law

Goods of same description and under the same PTC Heading and value were cleared even after framing contravention report as against the consignment in question

By giving differential treatment to importer the authorities acted in derogation of Arts. 4, 18 & 25 of the Constitution

Customs Appellate Tribunal endorsed the earlier assessment order and set aside the orders passed by Principal Appraiser and Additional Collector Customs (Adjudication), as no illegality was committed by appropriate authority

Description of any goods could not be stretched other actual description, only for the purpose of squeezing duty and taxes despite not leviable

Appeal was allowed in circumstances.

Re-assessment under S.80(3) of Customs Act, 1969, is permitted only after calling for documents as contemplated in S.80(2) of Customs Act, 1969, after clearance of goods in terms of S.83 of Customs Act, 1969, & R.442 of Customs Rules, 2001

After examination, if declaration transmitted and uploaded documents at the time of transmitting Goods Declaration under S.79(1) and R.433 of Customs Rules, 2001 or any information or statement so furnished by importer is found to be incorrect in respect of earlier assessment

In absence of availability of such ingredients, reassessment is not permitted

Assessing Officer instead of accepting Goods Declaration preferred to inspect the goods and found them as per Declaration

Principal Appraiser re-examined the goods and imposed additional duty and taxes on the plea of mis-declaration

Additional Collector Customs (Adjudication) passed an order to confiscate the goods subject to redemption on payment of 20% fine

Validity

Consignment which had undergone process of passing assessment order under the provision of S.80 of Customs Act, 1969, and R.438 of Customs Rules, 2001 for levy of duty and taxes by competent authority in exercise of powers vested upon him through notification SRO No.371(I)/2002, dated 15-6-2002

Such order was appealable order and could not be disturbed by any other authority including Principal Appraiser of the Group and Additional Collector Customs (Adjudication), with the exception of preferring an appeal under the provision of S.193 of Customs Act, 1969

No mis-declaration in material particular existed in regard to description, quantity, origin and weight of goods in question

Provisions of S.32(2) nor (3) of Customs Act, 1969, were not applicable

Case at the most could be termed as error, omission or misconstruction, committed / done by customs officers falling under the provision of S.32(3) of Customs Act, 1969

Show-cause notice could be issued by Principal Appraiser only as notified in Serial No.3 (ii) of notification S.R.O. No.371(I)/2002, dated 15-6-2002 and none else

Assessing Officer wrongly created recovery / demand through re-assessment order on the direction of Principal Appraiser and Additional Collector Customs (Adjudication) passed order by usurping powers of his subordinate which was not permitted under the law

Goods of same description and under the same PTC heading and value were cleared even after framing contravention report as against the consignment in question

By giving differential treatment to importer the authorities acted in derogation of Arts. 4, 18 & 25 of the Constitution

Customs Appellate Tribunal did not endorse the earlier assessment order and set aside the orders passed by Principal Appraiser and Additional Collector Customs (Adjudication)

Description of any goods could not be stretched other actual description, only for the purpose of squeezing duty and taxes despite not leviable

Appeal was allowed in circumstances.

Re-assessment under S.80(3) of Customs Act, 1969, is permitted only after calling for documents as contemplated in S.80 (2) of Customs Act, 1969, after clearance of goods in terms of S.83 of Customs Act, 1969, and R.442 of Customs Rules, 2001

After examination, if declaration transmitted and uploaded documents at the time of transmitting Goods Declaration under S.79(1) and R.433 of Customs Rules, 2001 or any information or statement so furnished by importer is found to be incorrect in respect of earlier assessment

In absence of availability of such ingredients, reassessment is not permitted.

Re-assessment under S.80(3) of Customs Act, 1969, can be made after release of goods if declaration or documents or any information or statement so furnished is found to be incorrect in respect of earlier assessment

In absence of availability of any mis-declaration, mis-statement, false documents /statement, re-assessment is not permitted.

Despite payment of all duties and taxes levied by authorities, goods in question were not released by Customs Authorities

Validity

Auditor was empowered to conduct audit of record under the provision of S.26(2) of Customs Act, 1969, but after serving notice or summons as contemplated in S.26A (a) of Customs Act, 1969

No mandated notice or summons was served upon importer rendering purported audit and observation so conducted in derogation of law

Re-assessment / adjudication order under S.80 of Customs Act, 1969 and R. 438 of Customs Rules, 2001, rested with Principal Appraiser under SRO No.371(I)/2002, dated 15-6-2002 and Auditor figured nowhere in the provision of S.179 of Customs Act, 1969

No appeal was filed either by authorities despite mandated under law, instead the Assessing authorities assumed powers under S.195 and reopened valid assessment / clearance order passed under the provisions of Ss. 80 & 83 of Customs Act, 1969, and Rr. 438 & 442 of Customs Rules, 2001

Assessing authorities were not empowered to reopen valid assessment order passed by authority defined in S.2(a) of Customs Act, 1969, in exercise of powers vested upon him through S.R.O. No.371(I)/2002, dated 15-6-2002

Assessing authorities acted without power/jurisdiction and their action was without any lawful authority and as such ab initio, null and void

No amendment under S.205 of Customs Act, 1969, was allowed in the column of declared value, quantity or description after removal of goods from Customs area or Customs Reference number was allotted to goods declared electronically

Customs Appellate Tribunal set aside re-assessment order passed by Auditor as well as Appellate Authority as the same suffered from grave legal infirmities and were null and void

Appeal was allowed in circumstances.

Re-assessment order in any shape / manner by all means falls within the definition of demand notice for recovery of short paid amount of duty and taxes due to commission of inadvertence by officials of Clearance Collectorate

Such type of recovery can only be created upon passing an order after issuance of show-cause notice under S.32(3) of Customs Act, 1969.

Re-assessment under S.80(3) of Customs Act, 1969, after release of goods is permitted only after calling for the documents as expressed in S.80(2) of Customs Act, 1969.

Upon receipt of documents or information so transmitted / submitted or statement given by importer to Customs Authority if were found to be incorrect in respect of earlier assessment.

Subordinate of Deputy Collector of Customs, after gate out of the consignment, took up the Goods Declaration, and re-assessed the same and recovery was created in isolation, without following the mandated requirement of law of issuance of show-cause notice and for pressurizing importer for payment of said amount, despite illegal, and not payable under law

Once the goods were gate out/out of the Customs, Officers of Customs would become functus officio

Plea of the importer that the Valuation Ruling, was not applied at the time of passing assessment order, was also without any substance, and legal effect, because, if the Valuation Ruling, was not applied at the time of passing assessment order, that could not be applied subsequently, when the goods were out of the charge, and not in custody of customs

Orders passed by Customs Authorities, were declared to be illegal, null and void and were set aside.

Appellants/importers, imported consignments of Fruit Mix and filed goods declaration, whereby goods were declared to be classifiable under HS Code 2008-9700, and the value was declared

Said declarations were accepted by Customs Authority, and goods were released without payment of sales tax

Subsequently it transpired that canned fruits were not eligible for exemption

Resultantly, Goods Released with inadmissible zero rating of Sales Tax, were re-assessed accordingly by authorities

Validity

Under provisions of S.3DD of the Customs Act, 1969, Directorate of Post Clearance Audit had been created and its Officials had been delegated powers through Notification No. S.R.O. 500(I)/2009, dated 13-6-2009 for conducting audit of the importer under S.26-A of Customs Act, 1969

Re-assessment by Deputy Collector Customs, Goods Declaration, after clearance, was without lawful authority, and being without any power/jurisdiction, was void ab initio and coram non judice

Re-assessment under S.80(3) of Customs Act, 1969, after release of the goods was permitted only after calling for the documents

Upon receipt of documents or information so submitted, if were found to be incorrect in respect of earlier assessment, the re-assessment could be made

No mis-declaration being visible in material particulars, no re-assessment was required under S.80(3) of Customs Act, 1969

Re-assessment was permitted prior to passing of order of clearance under S.83 of Customs Act, 1969 and R.442 of Customs Rules, 2001

No mandatory show-cause notice had been issued before ordering re-assessment

Mandatory conditions for exercise of jurisdiction, having not been fulfilled, entire proceedings, had become illegal and suffered from want of jurisdiction/power

Any order passed in continuation of those proceedings in adjudication of appeal, equally suffered from illegality and were without jurisdiction

Since re-assessment order, was without jurisdiction, the entire proceedings, right from re-assessment order, order-in-appeal, were also without lawful authority and jurisdiction

Adequate breach of principles of natural justice equated with breach of law by the hierarchy of the customs, suffered from grave legal infirmities, were declared illegal, void ab initio and of no legal effect

Appeals were allowed, in circumstances.

Period of limitation of one year after the end of the financial year in which the appellate order served on the Commissioner had been prescribed in the Income Tax Ordinance, 1979, also as per S.124 of the Income Tax Ordinance, 2001 same period of limitation had been prescribed in case of remand to reframe the assessment

Taxation Officer had passed the order on 16-5-2011,whereas the appellate order had been served on department on 10-2-2009

Under the provision of S.66(1) of the Income Tax Ordinance, 1979 period of limitation expired on 30-6-2010, while the order by the Taxation Officer had been passed on 21-5-2011, which was barred by limitation

Further, appellate order dated 10-1-2009 served on 10-2-2009, no appeal had been filed by the department before Appellate Tribunal ;and order attained finality in the circumstances where the order passed by the Taxation Officer dated 16-5-2011 was barred by limitation, while no appeal had been filed by the department in such like situation and what had been declared by the assessee was to be accepted which had been directed by the First Appellate Authority

Departmental appeal failed and stood rejected by the Appellate Tribunal.

Re-assessment could not be framed only in the situation where a proper notice was served on correct person by a correct officer for the correct assessment year, but the income was either not income or was held to be otherwise exempt or assessment was made when it was already barred by limitation

In all other cases reassessment could be made by issue of proper notice by the proper officer, served on proper person for the proper assessment year (as the case may be)

Limitation as provided in the Ordinance was to be taken into consideration

Annulment of order differ from the remand of case, remand of case acknowledge the period of limitation where in consequence of remand order period of limitation had separately been provided which was to be counted from the date of order of remand in the Ordinance and on annulment assessment could be framed within the period as stipulated in the Ordinance i.e. 5 years from end of the financial year in which income was first taxable.

Vehic'es imported were provisionally released on the basis of provisional assessment and after lapse of nine months, authorities issued valuation advice and intended to initiate proceedings against petitioner under S. 32 of Customs Act, 1969

Validity

Purpose behind requiring Collector to record exceptional circumstances which warranted extension of time was to ensure that Collector had applied his mind to relevant facts of each case and made his decision on a proper consideration of the same

Omnibus request, assented to in a mechanical manner was no compliance with the requirements of proviso to S. 81(2) of Customs Act, 1969

Stipulated period was not extended by the authorities, as required by law, with the result that the period lapsed on the expiry of nine months

Additional amount computed on the basis of "provisional assessment" in terms of first proviso to S. 81(1) of Customs Act, 1969, was not included in "provisional determination" on the basis of which goods were provisionally released

If final determination was not completed within stipulated period, then provisional determination would have become final and the same did not include "additional amount"

Stipulated period was not extended in terms of proviso to S.81(2) of Customs Act, 1969, and hence expired at the end of nine months

No final determination was available within nine months, therefore, provisional determination became final

Petitioner having discharged its liability in terms of provisional determination, no other amount was payable by it, and no "additional" amount could be recovered front petitioner

Constitutional Petition was allowed accordingly.

Re-assessment completed by the Assessing authority in pursuance of order of First Appellate Authority whereby the case was remanded was nullity in the eye of law for the reason that the assessee had already approached the Appellate Tribunal in further appeal and the same was pending for adjudication before the Appellate Tribunal

Propriety demanded that the Assessing Officer should have waited till any findings were given on the issue by the Appellate Tribunal

Re-assessment being void ab initio, all the proceedings conducted thereafter were also not sustainable in the eye of law.

When re-assessment proceedings were taken up by the Assessing Officer the assessee had not filed any appeal before Appellate Tribunal against First Appellate Authority's order dated 3-10-2000 and no such appeal had been filed before Appellate Tribunal till the date that re-assessment was finalized i.e. 1-12-2000

Appeal before Appellate Tribunal against order of First Appellate Authority dated 3-10-2000 was filed by the assessee on 7-12-2000 whereas re-assessment under S.63/132 of the Income Tax Ordinance, 1979 had been finalized on 2-12-2000

Re-assessment framed under S.63/132 of the Income Tax Ordinance, 1979 dated 2-12-2000 could not be knocked down on this score

Assessee failed to produce books of accounts and supporting documentation when its case was fixed for hearing both at the time of original assessment as well as when re-assessment was taken up

Such persistent default on assessee's part made an ex parte assessment in the best judgment of the Assessing Officer inevitable

Assessment made under S.63/132 of the Income Tax Ordinance, 1979 was fair and reasonable and consistent with operative facts.

Assessee contended that an application for reference was filed in Appellate Tribunal which was not entertained whereon the assessee was forced to file Reference in High Court under S.136 of the Income Tax Ordinance, 1979 which was still pending, that pending disposal of Reference, the Taxation Officer passed re-assessment order; and that Taxation Officer was intimated that a Reference had been filed in the High Court; and re-assessment could not be framed when a said Reference was pending

Department contended that taxpayer was required to produce evidence showing filing of Reference before High Court which was not done and the re-assessment order was passed

Validity

Assessee had not produced any order by High Court showing the stay of the proceedings

Bare reading of provisions of S.136(8) of the Income Tax Ordinance, 1979 showed that there was no bar in conducting re-assessment proceedings after a decision by the Appellate Tribunal unless an order by the High Court for stay of recovery had been issued

Indisputably, recoveries were effected only following the existence of assessment orders

Legal proceedings could not be withheld, merely because order of Appellate Tribunal was under reference, where no stay had been issued

If re-assessment proceedings could not be conducted in the event of an appeal or Reference, having been filed, the words showing of stay for recovery contained in subsection (8) of S.136 of the Income Tax Ordinance, 1979 would not have been incorporated/used

Passing of re-assessment order was not illegal which however had been set aside by the First Appellate Authority

Appeal was rejected by the Appellate Tribunal having no force.

Assessee contended that re-assessment should be finalized within one year from the end of financial year in which such order was received by the Taxation Officer

Assessment was cancelled by the First Appellate Authority for the sole reason that the same was hit by limitation

Admittedly, order of Appellate Tribunal was received on 13-5-2003 and according to which re-assessment proceedings should have been completed by 30-6-2004

Department failed to rebut the assertions made by the assessee

Order of First Appellate Authority was maintained by the Appellate Tribunal and appeal of the Revenue being without any force was rejected.

Order of assess­ment dated 30-6-1983, was declared illegal by High Court and income tax authorities were directed to decide the matter afresh

Notice under S.61 of Income Tax Ordinance, 1979, was issued on 13-6-1997, while notice under S.62 of the Ordinance was issued on 13-6-1997, i.e. within one year of the decision of High Court

Re-assessment under S.65 of Income Tax Ordinance, 1979, was once again challenged by assessee before appellate authority who vide order dated 27-4-1998, set aside the assessment and directed fresh assessment by providing opportunity to assessee to satisfy queries raised

Assessing Officer issued notice under S.61 of Income Tax Ordinance, 1979 before the end of financial year in which order in appeal under S.132 of Income Tax Ordinance, 1979, was received

Plea raised by assessee was that notice issued by authorities was time-barred

Validity

Notice was issued within the period of limitation as envisaged in S.66 of Income Tax Ordinance, 1979

Notice as well as additional assessment was made within the period of limitation as provided under S.66 of Income Tax Ordinance, 1979

Petition was dismissed in circumstances.

Assessee contended that First Appellate Authority was not justified to set aside the assessment after holding that assessment proceedings and the order subsequently passed had become illegal and void in view of third proviso to S.5(l)(cc) of the Income Tax-Ordinance, 1979

Because of jurisdictional defects, there was no other course except to cancel the assessment order instead of providing opportunity to panel to fill in lacunas and to remove fatal jurisdictional defects

Validity

Jurisdiction was vested with the .panel but panel had improperly exercised its jurisdiction and while making distinction between the existence of jurisdiction and the exercise of jurisdiction in an irregular manner, the laws shall not permit to declare the proceedings to be impugned at the behest of the person who invoked it in an irregular manner

Once an authority had jurisdiction, an irregularity in the exercise of it will not vitiate the decision

Such was a procedural lacuna which was curable by all means

Assessee's appeal was dismissed with the observation that there was gross negligence on the part of the Chairman and Members of the panel being senior officials of the Income Tax Department, their act required attention of the superiors.

Re-assessment - Reference - Question whether assessment made under S. 34(1)(a) was justified in law-High Court holding that there was no material to support the finding of the Tribunal that officer had reason to believe that there was omission to disclose material facts- Whether permissible-Indian Income-tax Act, 1922, Ss. 34(1)(a) & 66- [Kamal Singh Rampuria v. Commissioner of Income-tax (1970) 75 I T R 162 reversed].

Income-tax-Reassessment-Failure to disclose material facts-Assessee partner infirm in which his wife or minor child is a partner Income-tax return -Failure to include wife's or minor child's share in firm –Whether failure to disclose particulars-"Necessary for his assessment", meaning of-Assessment on minor represented by guardian of his share-Whether bars inclusion of minor's share in assessee's total income-Indian Income-tax Act, 1922 Ss. 2(15), 3, 4(1), 16(3) (a) (h), 22(5), 34(1)(a) & 59-Indian Income-tax Rules, 1922, r. 19-[V. D. RM M. RM. Muthiah Chettiar v. Commissioner of Income-tax (1965) 55 I T R 147 reversed].

Re-assessment-Proceedings under new Act of 1961 whether can be commenced in respect of a period prior to 1962-63-Income-tax Act, 1961, Ss. 147(a) & 297(2)(d)(ii)- so Indian Income-tax Act, 1922, S. 34.

Income-tax Act, 1922, Ss. 23-A & 34.

Income-tax-Re-assessment - Interest on borrowed money allowed as deduction for 1956-57-Discovery during 1958-59 assessment that borrowed money not utilised for business-Reopening of assessment for 1956-57 and disallowing of interest originally allowed Whether reopening valid-Indian Income-tax Act, 1922, S. 34(1)(b).

Assessee not including in his return incomes of his wives and minor children arising our of assets transferred by him includible in income of assessee under S. 16,3)-Proceedings under S. 147(a) of Act of 1961 - Legality-Indian Income-tax Act, 1912, Ss. 16(3) & 22

Income-tax Act, 1961, Ss. 147 & 148.

Estate duty-Re-assessment - Under-valaution Opinion of Central Board of Revenue in appeal regarding correct valuation of securities-Whether "information"- Estate Duty Act, 1953, S. 59 (as amended by 1958-Amendment Act)-[Assn. Controller of Estate Duty v. Nawab Sir Osman Ali Khan Bahadur (1969) 72 I T R 156 reversed].

Income-tax-Reassessment-Amount invested by partners in firm treated as income of firm-Deleted on appeal with direction proceed against individual partners to consider assessability assessment of amount in hands of partners-Whether valid Whether new Act makes any difference-Indian Income-tax Act, 1922, S. 34(3), second proviso-Income-tax Act, 1961, Ss. 147 3(3), Explanation.

Re-assessment - Limitation - Escaped income above 1 lakh - Assessment year 1946-47 - Notice wader 34(1)(1) - Legality - Whether S. 34(1-A) repugnant to 34(1)(1)

Construction of statutes - Doctrine of implied repeal-Income-tax Act, 1922, S. 34(1)(1), (1-A).

Re-assessment - Escaped income-Proceeding under S. 34, Income-tax Act, 1922 against different persons in respect of same escaped income-Validity-Transfer of proceedings under S. 5(7-A)-Opportunity to show cause-Opportunity for personal hearing whether necessary.

Reassessment Re-assessment-Jurisdiction-Notices relating to war period-Whether could be issued after March 31, 1956-Jurisdiction to issue notices-Failure to disclose material facts-Indian Income-tax Act, 1922, S. 39(1)(a).

Reassessment Jurisdiction - Belief that income escaped assessment in consequence of information - Assessee deriving interest from another firm on advances - Treated in original assessment as share of profits-Tribunal's decision in proceedings of other firm holding interest as allowable business expenditure-Whether "information" - Indian Income-tax Act, 1922, S. 34(1)(b).

Question of law -Scope of reference-Whether limited only to aspects of question argued before Tribunal -Indian Income-tax Act, 1922, Ss. 34(3), prov. (2) & 66(1)-Income-tax (Amendment) Act, 1959, S. 2.

Reassessment Reopening within 4 years-Notice - Jurisdiction-Reason to believe income has escaped assessment-High Court-Writ-Scope of jurisdiction to interfere-Income-tax General principles-Arrangement resulting in distribution of tax liability-Whether permissible-Income-tax Act, 1961, S. 147 (b).

Reassessment Income earned in Karachi prior to Partition- Whether liable to re-assessment-Re-assessment of partner whether can be made without prior assessment of firm-Sanction for re-assessment obtained describing assessee as association of persons-Re-assessment of assessee in the status of individual whether permissible - Notice - Notice served on one of several legal representatives-Re-assessment proceedings whether valid-Indian Income-tax Act, 1922, Ss. 24-B & 34(1)(a).

Reassessment Interest on advance tax-Amendment of law with retrospective effect-Interest allowed becoming excessive owing to amendment-Recovery of excess of interest by way of rearsessment-Whether permissible-"Relief", meaning of-Indian Income-tax Act, 1922, Ss. 18-A(5) & 34(1](b).

Income returned by assessee Assessment of such income as another person's income Assessment set aside on appeal Proceedings under S. 34 against assessee Maintain ability Limitation Judgment of Appellate Assistant Commissioner or Tribunal Whether "information" Meaning of "assessment" and "re assessment" Indian Income tax Act, 1922, Ss. 34 (1) (a), (b) & 34 (3), proviso.

Interest on advance tax-Amendment of law with retrospective effect-Interest allowed becoming excessive owing to amendment-Recovery of excess of interest by way of reassessment-Whether permissible-Indian Income-tax Act, 1922, Ss. 18-A (5) & 34 (1) (b).

Reassessment Reassessment-Jurisdiction-Belief that income has escaped assessment-Scope of jurisdiction of High Court in reference to test reasonableness-Information on which belief based proving ill-founded-Effect-Income-tax Act, 1922, Ss. 34(1)(b) & 66.

Income-tax Act, 1922, Ss. 18-A (5), (6) & 34(1)(6).

Order of re-assessment whether order of assessment under S. 23 to which S. 28 (1) (c) applies"-Reference-Finding of fact-When can be challenged-Income-tax Act, 1922, Ss. 34 (1) (b), (3) & 66:

Reassessment Re-assessment - Assessment of interest income and forest income-Tribunal holding notice invalid as regards forest income but setting aside entire re-assessment by mistake-No application for rectification or reference-Fresh re-assessment whether permissible to tax interest income-Indian Income-tax Act, 1922, Ss. 33 (6) & 34 (1) (a).