I.T.A. No.3081/LB of 2004, decided on 9th September, 2004. Versus I.T.A. No.3081/LB of 2004, decided on 9th September, 2004.

ORDER

1. This appeal has been filed by the assessee‑appellant for the assessment year, 1999‑2000 against an order recorded on 27‑5‑2004 by the learned CIT/WT(Appeals‑Zone), Gujranwala. As per grounds of appeal, the assessee‑appellant has agitated the following issues:‑‑

2. "That neither T.O. was justified in completing the assessment under section 63 of the repealed Income Tax Ordinance, 1979 without proper service of statutory notice nor learned CIT(A) was justified in maintaining the said action of the T.O.

3. That neither. T. O. was justified in issuing the action under section 61 of the repealed Income Tax Ordinance, 1979 when return of income was called for through issuance of notice under section 114(4) of Income Tax Ordinance, 2001 nor learned CIT(A) was justified in leaving the said ground without adjudication.

4. That neither T.O. was justified in determining the value of house, the investment of which is to probed without prior confronting the appellant in this regard and also getting approval of IAC under section 13(1) of repealed Income Tax Ordinance, 1979 nor learned CIT(A) was justified in maintaining his action in this regard.

5. That neither T.O. was justified in assessing the income of appellant under section 13(1)(aa) of repealed Income Tax Ordinance, 1979 nor learned CIT(A) was justified in maintaining its action.

6. That neither the T.O. was justified in completing the assessment. On the basis of investment made in purchase of house, during the year under consideration as investment was made during assessment year, 2000‑2001 nor learned CIT(A) was justified in observing that no documentary evidence was adduced even before him when appellant submitted documentary evidence in this regard before him.

7. That neither T. O. was justified in issuing notice under section 116(b) per default of section 114(4) and section 58 of repealed Income Tax Ordinance, 1979 because same was not served in saving section of 239 of Income Tax Ordinance, 2001 nor learned CIT(A) was justified in leaving the said ground without adjudication".

8. Brief and relevant facts 'of the case leading to this appeal are that the proceedings in this case were initiated on the basis of Survey Form of properties in which the assessee declared Property No. 81, Askari Homes, Phase‑I, Gujranwala Cantt. as owner. Statutory notices under section 114 of the Income Tax Ordinance, 2001 was issued on 10‑12‑2003 and duly served upon the assessee but no return of income was filed on due date i.e. 2‑2‑2004. Notice under sections 61/58 was issued on 24‑2‑2004 for compliance on 11‑3‑2004 but remained un-complied with. The Assessing Officer conducted spot enquiry through. Circle Inspector for ascertaining the quality and cost of construction of the said house. The Assessing Officer issued notice under sections 13(1)(aa)/61 along with copy of Inspector report on 8‑4‑2004 and served upon the assessee herself but she preferred to remain absent. To finalize the assessment, the Assessing Officer has observed that the assessee has failed to give any explanation for the amount invested in the purchase of House No.81, Askari Homes, Phase‑I, Gujranwala Cantt. and as such the amount invested at Rs.12,20,000 was assessed as deemed/unexplained income under section 13(1)(aa) of the Income Tax Ordinance, 1979 and framed the assessment ex parte by considering the facts and circumstances as elaborated above while assessed the income at Rs.12,20,000 for the year under consideration.

9. On being aggrieved with the above treatment, the assessee went in appeal before the learned CIT(Appeals) who vide his order cited supra, observed that the assessee's contention regarding property in which the investment was made by the assessee related to assessment year, 2000‑2001, this was not substantiated by any documentary evidence neither before the Assessing Officer nor at the appellate stage. So, the income assessed under section 13(1)(aa), the same was assessed in accordance with legal provisions as income was determined under, section 13(1)(aa) after duly confronting to the assessee on the issue. As regards, assessee's contention that addition was to be made under section 13(1)(aa) and that income was not to be assessed under section 13(1)(aa), the same has also no legal significance. So, in view of these facts, the learned CIT(Appeals) confirmed the assessed income under section 13(1)(aa).

10. We have considered the rival arguments before us and perused the orders of the authorities below and we are of the considered view that the assessment framed by the Assessing Officer in the case of the assessee has been done in a slipshod manner. Notice under section 114 of the Income Tax Ordinance, 2001 was issued in the case calling for return of income for the assessment year, 1999‑2000. Later on, the Assessing Officer issued notices under sections 58 and 61 of the repealed Income Tax Ordinance, 1979. This, in our view, is a serious "contradiction" which is not curable as the Assessing Officer had initiated proceedings under the Income Tax Ordinance, 2001 while the subsequent proceedings were completed under the repealed Income Tax Ordinance, 1979. This, in our, considered view is not possible that the Assessing Officer draws his powers from two different Legislations i.e. Income Tax Ordinance, 2001 and Income Tax Ordinance, 1979. In the circumstances, we are of the view that the assessment proceedings for assessment year, 1999‑2000 are faulty and are annulled.

11. The appeal stands disposed of as above.

12. H.B.T./348/Tax (Trib.) Appeal allowed accordingly.