I.T.A. No.2649/LB of 2000, decided on 16th November, 2002. Versus I.T.A. No.2649/LB of 2000, decided on 16th November, 2002.
ORDER
1. KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER) .‑‑‑The assessee has filed this appeal. It is against cancellation of order under section 66A on the basis of the arguments that the assessee tax for the year is less than the tax paid in the immediate preceding year.
2. The learned AR has first of all referred to the order of the IAC and said that the tax payable for the impugned year at Rs.3293 was more than the tax paid in the immediate preceding year at Rs.2634. The case, therefore, qualified for acceptance under Self‑Assessment Scheme. The IAC's observation with regard to inclusion of the presumptive income for the purposes of calculation of tax in his opinion is not covered within the claim, of Self‑Assessment. The para which is relevant for discussion is as follows:
3. "(1) You submitted your return of total income for the assessment year 1997‑98 at Rs.69,930 on which tax payable was Rs.3293. In the assessment year 1996‑97 you had paid tax at Rs. 17,955 on supplies of rice to the Government covered under section 80‑C and also paid tax on other Income at Rs.2,634. As such total tax paid for 1996‑97 was Rs.20,559. From the above it is clear that your tax paid for the assessment year 1997‑98 was less than tax paid for 1997‑98. As essential condition for qualification of the return for 1997‑98 was that the tax paid for 1997‑98 was not less than the tax paid for the assessment year 1996‑97 as per para. 2(b) of Circular No.5 of 1997, dated 12‑7‑1997. In case decided by the learned Tribunal vide I.T.A. No. 5932 of 1999 (assessment year 1998‑99) the learned Tribunal observed as under:
4. `The learned IAC was right in point out that the successor failed to pay tax equal to last year and thus return did not qualify for acceptance under Self‑Assessment Scheme. In these circumstances, the learned IAC was justified to invoke the provisions of section 66‑A'."
5. It was argued that the SAS 1997‑98 is silent upon the subject with regard to inclusion of the presumptive income imputable on the basis of tax paid thereon as has been done earlier. The A.R. said that up to the assessment year 1993‑94 it has specifically been mentioned that where the income of a tax payer includes income which is subject to presumptive tax regime, it shall be taken into account for all purposes of the SAS including comparison of the income last declared/assessed. He said that it is settled principle of law that nothing is done beyond the language of law or can be added which has not been mentioned. SAS was introduced through Circular No.5 of 1997 and it does not include any such provision; hence the IAC is not correct in adding the same at his own. In support of his contention he has referred 1999 PTD (Trib.) 2168 which says that imputable income being covered under section 80C, an overriding section, cannot be treated as a regular income and should not be made part of the total income. He also referred few other judgments upon the subject in favour of his arguments.
6. On the other hand the learned DR pointed out that in this case the relevant comparison is not with income but with the tax. There was, therefore, obviously no need to mention that imputable income of assessment tinder section 80(c) shall be added being for comparison purposes. The SAS has used the word "tax paid" for the assessment year 1997‑98 and "tax payable" for the assessment year 1996‑97. Obviously tax payable in the earlier years be that under section 80C of otherwise is fully covered within the above connotation. The argument with regard to imputable income and its inclusion, therefore is of no relevance.
7. We have gone through the arguments as well as the order of the IAC. The learned DR is correct in arguing that SAS 1997‑98 has very clearly used the term "tax paid" and for comparison purpose income is of no relevance for qualifying under SAS. For ready reference we re‑produce here para 2(b) of Simplified Self‑Assessment Scheme for assessment year 1997‑98 prepared by the C.B.R. vide Circular No.5 of 1997. It speaks as follows:‑‑‑
8. "(b) The tax paid by an existing assessee on the basis of income declared for Assessment year 1997‑98 is not less than the tax payable for the Assessment year 1996‑97 on the basis of assessment of returned income Whenever is higher."
9. Above para is clear in its meaning. The connotation "tax paid" and "tax payable" cannot be interpreted to exclude the tax payable under presumptive tax regime for the earlier assessment years. It rather applied to all kinds of taxes paid by an assessee for the impugned order either tinder section 8013, C or D. Similarly, for comparison purposes the tax payable for 1996‑97 shall be grossed up by excluding tax payable under any of the above sections as well as surcharge payable by the said assessment during the relevant assessment year 1996‑97. The result of above discussion is obvious. The Assessing Officer had accepted a return, which was erroneous in law and obviously prejudicial to the interest of Revenue, as the same was not covered within the scheme of Self‑assessment. It has caused prejudice to the Revenue on both counts, i.e. for the reason of payment of lesser tax and also that the ITO had no jurisdiction to accept the return, which did not qualify for the Scheme of Self‑Assessment.
10. The cancellation by the IAC, therefore, is upheld and the appeal is dismissed.
11. C.M.A./628/Tax (Trib.) Appeal dismissed.