Versus Shoaib Ahmed , Nemo
ORDER
Titled appeal pertaining to assessment year 2002-2003 at the behest of the assessee/appellant, has been directed against the impugned order dated 19-9-2005, passed by the learned CIT(A) . Zone-IV, Lahore. The grounds urged by the appellant are as under:--
(1) "That the Taxation Officer has erred in law to frame assessment under section 62 of the Repealed Income Tax Ordinance, 1979 without having lawful jurisdiction over the case.
(2) That addition made under section 13(I)(aa) of the Repealed Income Tax Ordinance, 1979 at Rs.15,90,000 by the Taxation Officer and confirmed by the CIT(A) is without any confrontation/specific notice over this score, hence, the addition is illegal.
(3) That the addition under section 13(l)(aa) at Rs.15,90,000 of the Repealed Income Tax Ordinance, 1979 and confirmed by the CIT(A) is without approval of competent authority, hence, is void ab initio and illegal.
(4) That the addition under section 13(1)(aa) is against the law because all the sources of the investment are verifiable from out of withdrawal foreign currency account.
(5) That the estimation of sales at Rs.18,00,000 against declared at Rs.1,129,550 and reduced to Rs.16,00,000 is still without any justification, and basis, therefore, estimation is uncalled for being excessive and high.
(6) That the issuance of notice under section 190 of 'the Income Tax Ordinance, 2001 is also illegal for want of jurisdiction".
However, at the time of argument, the learned A.R argued the case on the legal premises, with the plea that the Assessing Authority who was seized of the case was not competent authority. Besides, the IAC(Audit) was not appropriate supervisory authority who could accord approval as envisaged under the law.
2. Facts relevant for the adjudication of present appeal are that assessee is an individual deriving income from sale of furniture in the name and style of Messrs Arshi Furnishers and also income under the head home property. Return for the year under consideration was filed declaring income at Rs.215,125 under Self-Assessment Scheme. Case of the assessee was selected for total audit through random computer ballot, and requisite statutory notices were issued. In response thereto, the assessee submitted necessary documents including wealth statement as on 30-6-2002. The wealth statement submitted by the assessee revealed that she had declared Rs.2,52,000 in Tax Amnesty Scheme, 2000 and encashed foreign currency of Rs.15,90,000/- but failed to produce the documentary proof of payment of tax under the Amnesty Scheme and proof of foreign currency encashment. In case of failure to explain the sources, intention to make addition under section 13(1)(aa) was shown. As regards encashment of foreign currency of Rs.15,90,000, the assessee submitted certificates from money changer which was not accepted in the, light of section 13(2A) of the repeated Ordinance and thus addition under section 13(1)(aa) was made after obtaining approval from IAC Audit. Similarly, sale were estimated at Rs.18,000,000 against the declared sales of Rs.1,129,550. Notice under section 190 of Income Tax Ordinance, 2001 was issued for concealment of income under section 111 of the repealed Ordinance. On appeal, the learned CIT(A) confirmed the treatment given to the assessee on the issue of addition made under section 13(1)(aa) as well as issuance of notice under section 190 of the Ordinance, 200'1. However, partial relief was allowed on the issue of sales by fixing it at Rs.1,600,000.
3. Feeling aggrieved with the above findings, the assessee is in further appeal before the Tribunal.
4. Mr. Shoaib Ahmed, Advocate has been heard on behalf of the assessee/appellant while none is present on behalf of the respondent/ department. Right at the outset the learned A.R proceeded to argue the case on the basis of legal premises. He vehemently submitted that the Deputy Commissioner (Audit) Medium Taxpayer Unit has acted in flagrant violation of law to pass the order under section 62 of the repealed Ordinance as no such authority existed under the new Income Tax Ordinance, 2001. Thus the assessment order was not sustainable in the eye of law. Also argued that since jurisdiction to assess the case was not assigned by the Commissioner of Income Tax in term of section 210 of the Ordinance of 2001 thus the order passed under section 62 of the repealed Ordinance 1979 was without jurisdiction which is liable to be annulled/cancelled.
5. The learned A.R. further entreated that addition under section 13(1)(aa)(ibid) has been made after obtaining approval from the IAC(Audit), which is also not maintainable under the law since no such authority was available in the hierarchy of Income Tax Ordinance, 2001. While summing up his arguments the learned A.R pleaded that assessment framed by the assessing authority was without jurisdiction, hence void ab initio.
6. We have heard the learned counsel appearing on behalf of the assessee and have also gone through the orders passed by both the learned lower authorities. Undoubtedly, the assessment in the instant case was framed by the Deputy Commissioner (Audit-5) whereas no such authority does exist under the new Income Tax Ordinance, 2001 with the powers to frame assessment. Under section 207 of Income Tax Ordinance, 2001, it is the "Taxation Officer" who is empowered to pass the order. The term "Taxation Officer" means Additional Commissioner of Income Tax, Deputy Commissioner. of Income Tax, Assistant Commissioner of Income Tax, Income Tax Officer, Special Officer, but does not include Deputy Commissioner of Income Tax (Audit). Similarly requisite approval in the instant case could only be accorded by either the Regional Commissioner or the Commissioner and, that too, after having due authorization from the Federal Board of Revenue.
7. At this juncture, it would be appropriate to reproduce relevant provision of law, which is as under:
Section 212---Authority of Approval.---The [Board] may, by a general or special order, authorize the Regional Commissioner or the Commissioner to grant approval in any case where such approval is required from the [Board] under any provision of this Ordinance.]
8. Perusal of aforementioned provision of law clearly indicates that the authorities which have been invested with the power of granting approval are Regional Commissioner or the Commissioner, while in the present case, the approval was granted by IAC (Audit).
9. For the foregoing reason, we tend to agree with the assertion made by the learned A.R. The assessment made in the instant was coram non judice for the obvious reasons that, firstly, the assessment was framed by DCIT (Audit) who had no jurisdiction to formulate assessment, secondly, requisite approval as envisaged under the law was also not accorded by the competent authority.
10. We, therefore, vacate the impugned order passed by the learned CIT(Appeals) and cancel the assessment frame by the DCIT (Audit), being in flagrant violation of law.
11. Since the present appeal has been decided' purely on the legal premises, we do not feel the necessity to dilate upon the' merits of the case. The appeal of assessee entails acceptance.
C.M.A./120/Tax (Trib.) Appeal accepted.