I.T.AsNos. 6274/LB and 6275/LB of 1998, decided on 27th September, 2002. Versus I.T.AsNos. 6274/LB and 6275/LB of 1998, decided on 27th September, 2002.
ORDER
MUHAMMAD MUNIR QURESHI (ACCOUNTANT MEMBER). ‑‑‑These appeals by Revenue are directed against order of the CIT(A), Zone‑I, Lahore, dated 19‑9‑1995.
2. It is the departmental contention that the First Appellate Authority had unjustifiably directed that assessment for 1991‑92 and 1992‑93 be framed under section 62.
3. The facts in this case are that the assessee, a private limited company, filed returns of income under section 55(1) of the Ordinance for 1991‑92 and 1992‑93 on 27‑6‑1992 and 18‑8‑1992 respectively. The Assessing Officer, however, did not finalize the assessments for the two years under section 62 but the assessments were finalized under sections 80‑C and 59(A).
4. According to the Assessing Officer, the assessee's case did not qualify to be assessed under section 62 and moreover he held that final and irrevocable option to opt out of the presumptive tax regime, in terms of clause (9) of Part IV of the Second Schedule to the Ordinance, did not accompany the returns filed belatedly under section 55(1). The Assessing Officer had duly interrogated the assessee during the course of assessment proceedings and had questioned as to why option to opt out of the presumptive tax regime had not been filed in time alongwith, the returns of income and the assessee had advised that the official Notification No. S.R.O. 829(I)/91 on the matter pertaining to option had been issued on 28‑8‑1991 which was after' the last date of filing of return of income for the assessment year 1991‑92. As for assessment year 1992‑93, the assessee was of the opinion that option filed in assessment year 1991‑92 would be good for alb ‑subsequent years also. This contention was rejected by the Assessing Officer who held that as per law the option was required to be filed each year alongwith the return of income.
5. Before the First Appellate Authority, the assessee reiterated its contention that as the official notification regarding filing of final and irrevocable option had been issued to the public after the last date for filing of return of income of 1992‑93 (i.e. 31‑7‑1991), the assessee could not be expected to be aware of the statutory stipulation regarding filing of option and as such the belated return filed and the belated option should have been accepted by the Assessing Officer. The assessee cited case‑law as (1983) 155 ITR 568 in which it had been held that notification provided in the official gazette but not made available to the general public would not amount to a notification at all as the public could not be expected to be aware of something that had not been placed before the public in time.
6. The assessee's contention found favour with the CIT(A) who ruled that the assessee's case qualified for assessment under section 62. The CIT (A) specifically pointed out that the C.B.R. had finally clarified the matter through its Circular C. No.1 (155)/DPT‑11/94, dated 28‑5‑1996 in which it had been announced that returns of income filed by manufacturers for assessment year 1991‑92 by the due date i.e. 31‑7‑1991 would also be treated as filing of final and irrevocable option to opt out of presumptive tax regime in terms of clause (9) Part IV of the Second Schedule to the Ordinance as the notification regarding filing of option had been issued on 24‑8‑1991 after the closing date for filing of .return for 1991‑92 in the case of those assessee's having calendar year as their income year. According to the CIT(A), the said clarification issued by C.B.R. condoning delayed filing of option by the assessee for 1991‑92 is fully applicable in assessee's case.
7. The DR has strongly opposed assessee's contention on the matter. According to the DR, the condonation envisaged in the C.B.R. Circular C. No.1(155)/DPT‑11/94, dated 28‑5‑1995 applied to those assessees/manufacturers who had filed returns of income for 1991‑92 (in time) by 31‑7‑1991. It was pointed out that the assessee has filed return of income for 1991‑92 well after closing date on 27‑6‑1992 i.e. 10 months and 26 days late and furthermore the option to opt out of the presumptive tax regime was filed after the return had been received by the Department. The option did not accompany the belatedly filed return of income for 1991‑92. As for assessment year 1992‑93, the DR pointed out that in this year too, the return of income was not filed in time but on 18‑8‑1992. Thus option to opt out of the presumptive tax regime in assessment year 1992‑93 was not received by the Department by the "due date" i.e. 31‑7‑1992.
8. According to the DR, the condonation announced by C.B.R. vide its Circular C. No.1(155)/DPT‑11/94, dated 28‑5‑1995 was relevant only for assessment year 1991‑92 and did not apply in assessee's case as the condonation was applicable in only those cases in which the return of income under section 55(1) had been filed in time.
9. AR of assessee reiterates earlier contention made before the Assessing Officer as well as the CIT(A) that the assessee could not be expected to be aware of the official notification, dated 24‑8‑1991 regarding option when the closing date for filing of return was 31‑7‑1991 that had statedly been extended to 30‑8‑1991. The AR argues that the assessee had acted in good faith and should not therefore, be punished by making an unrealistic interpretation of the law. As for belated filing of option in assessment year 1992‑93, the AR reiterated that the assessee genuinely believed that the option filed in assessment year 1991‑92 would also be good for assessment year 1992‑93.
10. We have heard both sides and have examined the available record and in our considered judgment, option to opt out of the presumptive tax regime in terms of clause (9), Part IV of the Second Schedule to the Ordinance is available only to those assessees who have filed returns of income under section 55(1) in time i.e. by 31‑7‑1991 in cases where the calendar year in the income year. The C.B.R.s condonation announced through circular referred to Supra makes it abundantly clear that only those assessees/manufacturers who had filed return of income under section 55(1) by 3‑7‑1991 were to be treated as having filed option to opt out of the presumptive tax regime alongwith the return for 1991‑92 as the official notification regarding option has been issued on 24‑8‑1991. That being so, the condonation announced by C.B.R. cannot apply in assessee's case as the assessee admittedly did not file return of income under section 55(1) for 1991‑92 by 31‑7‑1991. Infect, the assessee did not file return of income for 1991‑92 even by 30‑8‑1991. Rather, the return for 1991‑92 was filed on 27‑6‑1992 and the option was filed even later.
11. The statutory stipulation laid down in clause (9), Part IV of the Second Schedule to the Ordinance makes it expressly clear in the proviso to clause (9) that the declaration of final and irrevocable option to opt out of the presumptive tax regime was to be furnished in writing alongwith the return of total income filed under section 55(1). The assessee has not complied with this express statutory stipulation.
12. The case‑law cited by assessee is of Indian jurisdiction and is found to be of no avail to the assessee as the situation envisaged therein is not parimateria with the situation. obtaining in assessee's case. The C.B.R. having taken cognizance of the belated issuance of notification regarding option has formally waived the requirement of filing option alongwith the return of income for assessment year 1991‑92 provided the return for 1991‑92 has been filed "in time" i.e. by 31‑7‑1991. The assessee having filed return of income for 1991‑92 on 27‑h‑1992 is thus clearly not eligible for the waiver announced by the C.B.R.
13. Assessee's contention that the condonation was under a bona fide misunderstanding regarding filing of option for each year separately and honestly believed that option filed for 1991‑92 would be good for 1992‑93 as well does not hold force. It is trite law that each year is an independent assessment year and statutory stipulation regarding filing of return of income and option to opt out of the presumptive tax regime applies for each year separately.
14. Looking at all pertinent aspects, we find that the CIT (A) had interpreted the law regarding filing of option incorrectly and has therefore, wrongly held that the assessee's case qualifies for assessment under section 62. We, therefore, vacate the orders of the CIT(A) for assessment years 1991‑92 and 1992‑93 and reinstate the orders of the DCIT.
15. Resultantly, the departmental appeals succeed.
C.M.A./596/Tax (Trib.) Appeal accepted.