Messrs GEAR HOBBING LIMITED vs COMMISSIONER OF INCOME-TAX and another

ORDER

1. ' In this appeal under section 136(1) of the Income Tax Ordinance, 1979, the appellant has proposed the following questions for our consideration:---

(i) Whether on the facts and the circumstances of the case, the Hon'ble Income-tax Appellate Tribunal was justified in maintaining the reopening of assessment under section 65 when the order of the Deputy Commissioner of Income-tax had merged with the order of the Income-tax Appellate Tribunal?

(ii) Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was justified in maintaining the reopening of assessment under section 65 on the basis of same set of facts merely due to change of opinion?

(iii) Whether on the facts and the circumstances of the case, the Hon'ble Tribunal was justified in holding that the order of the Deputy Commissioner had not merged with the order of the Honourable Tribunal and the assessment could be re-opened under section 65?

(iv) Whether on the facts and the circumstances of the case, the Hon'ble Tribunal was justified in finalizing the assessm ent under sections 65/59A/80C without issuance of any notice under sections 61/62 of the Income Tax Ordinance, 1979?

(v) Whether on the facts and the circumstances of the case, the Hon'ble Tribunal was justified in holding that the appellant was not entitled to tax holiday under section 125B of the Second Schedule of the Income. Tax Ordinance, 1979?

(vi) Whether on the facts and the circumstances of the case, the Hon'ble Tribunal was justified in holding that the appellant was liable to be assessed under section 80(c) and the assess could be finalized without issuance of any notice?

(vii) Whether on the facts and circumstances of the case, Honourable Income-tax Appellate Tribunal was justified in upholding the action of the Deputy Commissioner of Income-tax in finalizing the assessm ent without confronting the appellant with his proposed action?

2. ' Heard Mr. Muhammad Ather Saeed, learned counsel for the appellant and perused the impugned order of the Tribunal dated 4-4-2000 in I.T.A. No,581/KB of 1998-99 (Assessment Year 1992-93), I.T.A.

3. No,1010/KB of 1998-99 (Assessm ent Year 1992-93), I.T.A. No,1532/KB of 1998-99 (Assessment Year 1996-97) and I.T.A. No,1533/KB of 1998-99 (Assessment Year 1997-98). This appeal pertains to the assessm ent year 1992-93 only.

4. ' Mr. Muhammad Ather Saeed, learned counsel for the appellant has submitted that the moot point for consideration in this case is whether the learned Income-tax Appellate Tribunal was justified in holding that there was no necessity of issuing notices under sections 61/62 of the Income Tax Ordinance, 1979 and the Assessing Officer could complete the assessment without issuance of such notice.

5. ' The relevant facts are that, the Assessing Officer issued notice under section 65 of the Income Tax Ordinance for re-opening the assessment and calling upon the appellant to file return. In spite of proper service of notice on the appellant, no compliance was made and the return was not filed.

6. The result was that, the Assessing Officer proceeded to finalise the assessment and held that, the sales attracted provisions of section 80-C of the Income Tax Ordinance, 1979. The deductions were required to be made under section 50(4) of the Income Tax Ordinance, 1979 which were not made and therefore the assessm ent was completed under section 80-C of the Income Tax Ordinance, 1979 and the tax liability was worked out in accordance with the provisions relating to presumptive tax regime.

7. The presumptive tax regime is entirely different to the normal assessment of tax and in the presumptive tax regime neither any total income is computed nor any expenses are allowed. No total income is determined and the entire sales are deemed to be income on which fix rate of tax is recovered. In the presumptive tax regime there is no concept of probe, inquiry or proceedings enunciated under sections 61 and 62 of the Income Tax Ordinance, 1979, and therefore the question of issuing any notice under sections 61/62 of the Income Tax Ordinance, 1979 does not arise. In the facts and circumstances of the case when presumptive tax regime is adhered to there is no question of issuance of notice under sections 61/62 of the Income Tax Ordinance, 1979. Mr. Ather Saeed has further submitted that, he was not confronted on the point that, the income was covered under the presumptive tax regime. In view of the admitted position that, the appellant/assessee was served with the notice for reopening of assessment and the appellant choose not to file the return and not to appear initially before the Assessing Officer and subsequently addressed a letter only to the Deputy Commissioner of Income-tax, the Assessing Officer had no option but to finalise the assessment in the absence of the appellant. The appellant disentitled himself from the benefits which he could have availed by making compliance of the notice issued to him by Assessing Officer. No body can be allowed to take advantage of his own wrong.

8. In the above circumstances, when the assessment has been finalized under section 80-C of the Income Tax Ordinance under presumptive tax regime, the question of issuance of notices under sections 61/62 does not arise. No substantial question of law arises, requiring any consideration or interpretation by this Court and consequently the appeal is dismissed in limine.