DECISION /FINDINGS ' The grievances of the complainant are as under:- (0 That no tax demand can be made on the basis of the demand notice which is not on prescribed form.
(ii) That the respondent assessed the complainant's income for the assessment year, 2002-2003 whereas the business was started on 12-9-2002 after issuance of licence bearing No,EDOH/JCD/806, dated 12-9-2002.
' The facts of the case are briefly as under:--
2. The complainant is proprietor of Messrs Sony Medical House at Jacobabad.. This is a proprietor concern. No accounts are stated to have been maintained. Return of income was not filed and the case was booked on the basis of the report of Circle Inspector. Notices under section 56 and 61' were issued but were not responded to by the assessee. For the alleged failure to comply with the notices mentioned above the assessment was finalized under section 63 of the Income Tax Ordinance, 1979. It has been pleaded that this ex parte order was totally based on the report of the Circle Inspector. The assessee was even not furnished a copy of this report and hence could not rebut the findings of the Inspector. It has further been stated that the assessment is based on bald estimate which is not supported by any details, working or evidence. The AR has vehemently argued that during this period the assessee's business had not come into existence and the assessm ent year 2002-2003 is not relevant in this regard. The business was started on 12-9-2002 after the issuance of Licence bearing No, EDOH/JCD/806, dated 12-9-2002. It is obviously after the accounting period ended on 30-6-2002 for this year.
3. In the parawise comments bearing No,Jud-08/2003-4/1092, dated 7-10-2003 the respondent has admitted that proceedings in this case were initiated on the report of the Circle's Inspector. There is nothing on record to show as to how the report of the Inspector originated. It has further been admitted that the assessm ent is based on bald estimate without any basis or approval. He has, therefore, directed to the CIT concerned to initiate appropriate action against the Assessing Officer after obtaining his explanation. He has further directed that similar action should also be taken against the Inspector of the Circle for furnishing a fake report devoid of details, facts and without mentioning authorization for conducting enquiry.
4. He has further directed the concerned CIT to examine the case in the context of the applicability of section 122A of the Income Tax Ordinance, 2001 and ensure that the re-assessment is framed strictly in accordance with the law and facts.
5. Having heard the parties concerned and examining the record the assessment framed under section 63 for the assessm ent year 2002-2003 is ab initio void. The initiative taken by the RCIT is commendable and will help the process of confidence building which this institution has undertaken for good governance and bridging the gap between the taxpayer and tax officials.
6. It is, therefore, recommended that:--
(i) The directions given by the Regional Commissioner of Income Tax, Southern Region, Karachi to the concerned CIT to examine the applicability of section 122A of the Income Tax Ordinance, 2001 and re-assessm ent be framed in accordance with law and facts and after providing due opportunity to the complainant of being heard and the action proposed by the RCIT, Southern Region, Karachi against the Assessing Officer and the Inspector of the Circle be taken to its logical conclusion.
(ii) A copy of order in respect of S. Nos. (i) and (ii) be furnished to this office within 45 days of the receipt of this order.
Complaint disposed of.