MR. JAWAID MASOOD TAHIR BHATTI (JUDICIAL MEMBER).--(1). Through these four cross appeals, two separate orders passed by the learned CIT(A) dated 19.06.2002 for the assessment year 1998- 99 and order dated 01.12.2003 for the assessment year 2000-2001 have been objected.
2. The assessee for both the years under review has objected to the treatment meted out in respect of estimated sales. While the Department is also aggrieved regarding action of the learned CTT (A) reducing estimated sales of Rs. 20,00,000/- to Rs 16,00,000/- for the assessment year 1998-1999. For the assessm ent year 2000- 01, the Department has objected the setting aside the issue of chargeability of Workers Welfare Fund.
3. We have heard the learned representatives of both the sides and have also perused both the impugned orders of the learned CIT (A) and the assessment order.
4 Regarding assessm ent year 1998-1999, the learned counsel for the assessee Mr. Haroon Ahmad, ACA has contended that the order u/s. 62 of the Repealed Ordinance, 1979 passed by the assessing officer is illegal and void, as it has been served after the limitation period prescribed u/s. 64 of the Repealed Ordinance, 1979. He has, in this respect, drawn our attention to the provisions of Section 64 which according to the learned counsel has remained on the statute from 29.06.1996 up to 30.06.2002. According to which, it has been mentioned unambiguously that no assessment u/s 5 9-A, section 62 or section 63 shall be made after the expiration of two years from the end of the assessm ent year in which total income was first assessable. The learned counsel has contented that this Tribunal in a decision reported as (2005) 91 Tax 322 (Trib.) has held that "under the law, the making of an order under statutory provision means that the order must be communicated to the party affected by such an order. Unless the order is communicated to the effective party on or before the date prescribed u/s. 64, the order shall be invalid and ineffective". In this case, the assessm ent order made/served upon the assessee on or before 30.06.2001 but admittedly, the order has been served on the assessee on 03.08.2001 and is, therefore, invalid and ineffective in view of the decision of this Tribunal referred supra.
5. After considering the above said submissions made by the learned counsel for the assessee, we are of the view that the assessm ent order passed u/s. 62 of the Repealed Ordinance, 1979 was barred by time limitation which is, therefore, held to be null and void. As a result, the appeal filed by the assessee for the assessm ent year 1998-99 succeeds, while the appeal filed by the Department being not maintainable, is dismissed.
6. Regarding the appeal filed by the assessee for the assessment year 2000-2001, we have found that the declared sales of Rs. 13,75,146/- have been estimated by the assessing officer at Rs.
20,00,000/- which have been reduced to Rs. 17,00,000/- by the learned CIT(A) while the appeal GP rate at 36% has been upheld by the learned CIT(A).
7. The learned counsel for the assessee has contended that the assessing officer in the assessment order, has accepted that books of accounts were produced and examined by the assessing officer and the assessing officer in the assessment order has admitted that vouchers and other documents have been furnished and has observed that the reply filed by the assessee carries weight, but on the basis of stock phrases without confronting the assessee and pinpointing any specific defects in the books of accounts, the declared version has been rejected and the assessm ent has been framed on the basis of history without considering the fact that facts for the year under review are different from the previous assessment year. The learned counsel, in this regard, has also placed before us the comparative chart of the previous assessment year and other details which are already on record of the assessment proceedings. The learned counsel for the assessee placing reliance on the decision of the Tribunal reported as 1996 PTD 1104 has contended that history of the case is certainly something which, does provide guidelines, but it does not always make a basis for clear-cut rejection of accounts. In this decision, it has been held by this Tribunal that assessing authority for rejecting the accounts must establish a foolproof case quoting full facts and figures of an unproved, unverifiable and inaccurate version in the declared trading accounts.
8. After considering the above facts of the case, we are of the view that as the assessee is maintaining books of accounts and the assessing officer without pinpointing any specific defects in the accounts has made the estimation without any justification and therefore, the appeal filed by the assessee is allowed and the declared version is directed to be accepted. Consequently, the appeal filed by the Department for the assessment year 2000-2001 on the issue of chargeability of Workers5 Welfare Fund is also dismissed. Even other wise, the learned CIT(A) has directed to levy Workers' Welfare Fund if so warranted by the fact after brought forwarding all determined losses in accordance with the decision of Hon'ble Karachi High Court which requires no further interference.
9. The two appeals filed by the assessee for the assessment years 1998-1999 & 2000-2001 are allowed while the cross appeals for the same assessment years filed by the Department are dismissed for the reasons as discussed supra. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.