KHADIJA WASEEM BUTT, LAHORE Versus The COMMISSIONER INLAND REVENUE, ZONE RTO, LAHORE Ahmed Nauman , Umair Khan

ORDER

1. This appeal has been filed by the Taxpayer against the impugned order dated 18.03.2024 recorded by the learned CIR (Appeals), Lahore.

2. 2 The taxpayer, an individual filed income tax return to declare income from property at Rs.264,000/- prize on prize bonds at Rs.2,918,000/- and amnesty of Rs.200,000,000/-. The return was deemed to be an assessment order under section 120(1). The learned Additional Commissioner considered it to be erroneous in so far as prejudicial to the interest of revenue on the ground that sources of investment in properties and prize on prize bonds have been declared without documentary evidence, therefore, documents in support of these assets were required from the taxpayer and in case of failure of the taxpayer to submit the documents, intention was shown to make additions in the income. Owing to failure of taxpayer to produce the documentary evidence by the taxpayer required in respect of the above mentioned assets, additions were made under section 111. Aggrieved with this order the taxpayer filed appeal before the tribunal.

3. 3 Case was fixed for hearing by issuance of notices in response to which the learned AR represented the taxpayer and the learned DR represented the department. The learned AR at the very outset contended that the learned Additional Commissioner was not justified in invoking provisions of section 122(5A) without proving erroneous and prejudice to the interest of revenue. He further asserted that after omission of power to conduct inquiry by the Additional Commissioner vide Finance Act, 2021 the learned Additional Commissioner was not justified in conducting inquiries and requiring various documents. He insisted that the learned Additional Commissioner could have proceeded after selection of case under section 177 by the learned Commissioner. Without prejudice to the above the learned AR produced copies of challans of payment on, prizes on prize bonds as follows:

4. Prize on prize bond

5. Date

6. Prize money

7. Taxes

8. Balance

9. Cheque No.1064851

10. 28.12.2017

11. 93,000

12. 13,950

13. 79,050

14. Cheque No.0949208

15. 28.12.2017

16. 93,000

17. 13,950

18. 79,050

19. Cheque No.1064878

20. 28.12.2017

21. 93,000

22. 13,950

23. 79,050

24. Cheque No.1064848

25. 28.12.2017

26. 93,000

27. 13,950

28. 79,050

29. Cheque No. 1064771

30. 27.12.2017

31. 500,000

32. 75,000

33. 425,000

34. Cheque No. 1064887

35. 28.12.2017

36. 185,000

37. 27,750

38. 157,250

39. Cheque No. 1064833

40. 27.12.2017

41. 312,000

42. 46,800

43. 265,200

44. Cheque No. 1064827

45. 27.12.2017

46. 312,000

47. 46,800

48. 265,200

49. Cheque No. 1064824

50. 27.12.2017

51. 312,000

52. 46,800

53. 265,200

54. Total

55. 1,993,000

56. 298,950

57. Prize on prize bond

58. Date

59. Prize money

60. Taxes

61. Balance

62. Cheque No.1135557

63. 14.03.2018

64. 185,000

65. 27,750

66. 157,250

67. Cheque No.1135540

68. 14.03.2018

69. 185,000

70. 27,750

71. 157,250

72. Cheque No.1135539

73. 14.03.2018

74. 185,000

75. 27,750

76. 157,250

77. Cheque No.1135562

78. 14.03.2018

79. 185,000

80. 27,750

81. 157,250

82. Cheque No. 1135561

83. 14.03.2018

84. 185,000

85. 27,750

86. 157,250

87. Total

88. 925,000

89. 138,750

90. 1,993,000

91. 925,000

92. 2,918,000

93. He also produced copies of Amnesty Declaration for 2018 and 2019 at Rs.200,000,000/- and Rs.6,300,000/- respectively and he prayed for vacation of order of learned Additional Commissioner. The learned DR contended that taxpayer did not attend the proceedings, otherwise creation of demand under section 122(5A) could have been avoided. He further contended that the learned Additional Commissioner did not have authorization to check the Amnesty Declarations of 2018 and 2019 therefore, the taxpayer should have produced the same before the learned Additional Commissioner. He supported order of learned Additional Commissioner and prayed for dismissal of appeal of the taxpayer.

4. We have considered the arguments and perused the record. We are of the view that the learned Additional Commissioner was not justified in making fishing inquiries nor was he justified in requiring documents while conducting proceedings under section 122(5A). He could have requested through proper channel sharing with him Amnesty Declarations by the learned Chief Commissioner who could have obtained them from the Member Operations. It is interesting to note that amnesty declared in the wealth statement at Rs.63,000,000/- through Amnesty Declaration of 2019 was accepted whereas amnesty of Rs.200,000,000/- for 2018 was not accepted by the learned Additional Commissioner when, in fact, both of them were declared in the wealth statement for the tax year 2018 which proves that the learned Additional commissioner passed the impugned order without application of mind. Therefore, the Order under section 122(5A) passed by learned Additional Commissioner is vacated for being illegal and against facts of the case and appeal of the taxpayer is accepted.

94. MQ/46/TAX (TRIB) Appeal allowed.