I.T.A. No.1909/LB of 2005, decided on 30th July, 2005. Versus I.T.A. No.1909/LB of 2005, decided on 30th July, 2005.
ORDER
RASHEED AHMED SHEIKH (JUDICIAL MEMBER).--- The Revenue's sole objection in this case relates to annulment of assessment by the First Appellate Authority.
2. The assessee in this case derives income from manufacture and sale of hosiery products. Income tax return was filed by him declaring net income of Rs.90,000 under the scheme of self-assessment. However, the case was processed under normal law being the conditions precedent for qualifying under the said scheme were not adhered to. In order to finalize the assessment, statutory notices were issued which remained uncomplied with. Accordingly, the Assessing Officer proceeded to finalize the assessment ex parte in terms of section 63 of the Ordinance on the basis of available facts or record. Thus, sales were estimated by the Assessing Officer at Rs. 18,00,000 which were subjected to a gross profit rate of 25%. Resultantly, net income was computed at Rs.2,15,500 after making adjustments out of a certain heads of the profit and loss expenses.
3. Felt aggrieved by the order of the Assessing Officer the appeal was filed before the First Appellate Authority. The Appeal Commissioner, after weighing pros and cons of the facts of the case and also on going through the assessment record, came to the conclusion that the assessment made under section 63 was not sustainable in law. Accordingly, the order made in absentia of the assessee, under section 63 dated 30-6-2003, was annulled by virtue of the order rendered by C.I.T.(A) Appeal Zones, Lahore dated 28-2-2005. This decision of the First Appellate Authority compelled the Revenue to prefer appeal before the Tribunal which has now come up for hearing today.
4. The divergent views expressed by the rival parties in appeal have been considered. The question arises as to whether the assessment should be annulled or set aside where neither any statutory notices nor any order sheet entry to this effect is available on record. The ground realities are that the assessment order is completely silent that for which dates the statutory notices were issued and for which dates those were allegedly properly served and the assessee-respondent had failed to comply with the terms of notices. Even the date of issuance of last statutory notice, on the basis of which ex parte proceedings were initiated, has not been incorporated in the body of the assessment order. Coupled with it the statutory notices allegedly issued are not available on assessment record. In addition to, factum of issuance of statutory notices in the order sheet is also missing. In order to pass best judgment assessment under section 63 of the repealed Ordinance, it is imperative on the part of the Assessing Officer to incorporate defaulted date in the body of the assessment order on the strength of which ex parte proceedings were initiated. It is worthwhile to mention here that the First Appellate Authority while adjudicating the assessee's appeal specifically required the Taxation Officer, Circle-04, Zone-C, Lahore, vide Letter No. 143 dated 17-2-2005 to offer his comments by 21-2-2005 so that the appeal could be decided accordingly. But nothing was heard from the Assessing Officer's sides till the date the order was passed by the First Appellate Authority on 28-2-2005. This shows reckless attitude on the part of the Assessing Officer. This pathetic situation renders the ex parte action of the Assessing Officer to be not sustainable in law and as such was liable to be struck down. In the given scenario, I am fully " convinced that the ex parte assessment made under section 63 dated 30-6-2003 has rightly been annulled. Thus the departmental objection is overruled.
5. The departmental appeal, accordingly, fails and is dismissed being bereft of any merits.
H.B.T./502/Tax/(Trib.) ???????????????????????????????????????????????????????????? Appeal dismissed.