1. JAVED TAHIR BUTT, ACCOUNTANT MEMBER-- This appeal has been preferred by the assessee assailing the order passed by IAC u/S. 66A of the Income Tax Ordinance, 1979 being illegal biased and against the facts of the case.
2. Brief facts giving rise to action u/S. 66A are that the IAC examined the assessment record and observed that the assessm ent finalized for the assessment year 2000- 2001 u/S. 59(1) of the Income Tax Ordinance, 1979 was erroneous and prejudicial to the interest of the revenue and confronted the assessee throuah a show-cause notice dated 29.11.2001 pointing out various defects in the completed assessm ent as under:--
(i) You submitted return of total income for the year 2000-2001 declaring income at Rs. 253,630/- as a successor of a running business. Previously on the same business premises business was being done by M/s. Milli Shoes (Pvt.) Ltd. whose income for the assessment year 1999-2000 was assessed at Rs. 9,573,858/- on 30.6.2000. As you succeeded the business of the said company your tax paid for the year was to be compared with the tax paid by the predecessor for assessment year 1999-2000. As your tax paid is less than the tax paid by the said company. Your case did not qualify for acceptance under SAS in view of sub-clause (b) of explanation to clause (vi) of Para-2 of CBR Circular No. 21 of 2000, dated 11.9.2000. The Assessing Officer wrongly compared tax payable for the year 1999-2000 with the tax payable by Mst. Robina Iqbal.
(ii) Alongwith return you claimed deduction of tax u/S. 50(7F) on Paktel Nos. 757799 and 7713399.
2. These mobile numbers are not in your name but were used by M/s. Milli Shoes (Pvt.) Ltd., on the given address 45-Ahatta Nila Gumbad, Lahore. As the said telephones bills were not in your name and the address given was not address of your business premises, you could not claim credit of tax deducted on these bills. If the deduction of tax on the said telephones numbers is excluded, your tax paid u/S. 54 was short and return did not qualify for acceptance under SAS. The Assessing Officer ignored this fact and finalized the assessment which was' erroneous insofar as it was prejudicial to the interest of revenue.
(iii) You submitted your wealth statement as on 30.6.2000 alongwith return declaring net wealth of Rs. 1,73,82,303/-. During initial scrutiny the Assessing Officer found that you failed to declare value of 1/2 share of residential house in your wealth statement so he exclude the case from SAS and issued Notice u/S. 61 vide his letter No. 430, dated 24.3.2001 for submission of books of accounts/documents by 30.3.2001. In compliance you are A.R. Mr. Arshad Sheikh, FCA attended the proceedings on 30.3.2001 and requested for adjournment for 17.4.2001. On 17.4.2001 you are A.R. again attended the proceedings and submitted revised wealth statement through A.R's letter No. ASC/TAX/O, dated 19.4.2001. As per revised wealth statement net assets have been declared at Rs.
3. 1,71,51,308/- against the original wealth statement filed at Rs. 1,73,82,303/-. As per revised wealth statement value of 1/2 share in residential house was declared Rs. 10,96,780/- it is worth mentioning that due to this concealment your case did not qualify for acceptance under SAS in view of para. 4(i) of CBR Circular No. 21 of 2000, dated 11.9.2000. The Assessing Officer bad duly issued Notice u/S. 61 but afterward finalized the assessment u/S. 59(1) which was erroneous insofar as it was prejudicial to the interest of revenue. it is worth rrientioning that as your income declared at Rs. 2,53,630/- you were liable to submit wealth statement alongwith your return of income in view of proviso to Section 58 of the Income Tax Ordinance, 1979 inserted through Finance Ordinance, 2000. it is also pointed out that under the provision of SAS 2000-2001, only those returns qualified for acceptance under SAS which were filed u/S. 55. As before finalization of your assessment, you revised your wealth statement vide you are A.R. letter dated 19.4.2001 mentioned above, your return could not be regarded as return submitted u/S. 55 para-1 of CBR Circular No. 21 of 2000, dated 11.9.2000 is very clear on the subject.
4. SCOPE OF SCHEME "The scheme applies to the return of income filed u/S. 55 of the Income Tax Ordinance, 1979 for the assessm ent year 2000-2001 other than those mentioned in the paragraph No. 4 of this Scheme."
5. From the above facts it is clear that your return was to be regarded as revised return u/S. 57 and should have not been considered to be filed u/S. 55 to be accepted under SAS for the assessment year 2000-2001.
6. In view of above facts, it is established that the assessment completed was erroneous insofar as it was prejudicial to the interest of revenue. You are to show-cause notice why the assessment already completed may not be cancelled/modified/enhanced u/S. 66-A of the Income Tax Ordinance, 1979. Your reply is request by 8.12.2001."
7. The reply of the assessee was submitted which was examined and found unsatisfactory by the IAC and another show-cause notice dated 1.12.2001 u/S. 66A was issued seeking further explanation/informations and has been incorporated in the body of order u/S. 66A. In response to second notice u/S. 66A, the reply of the A.R. of the assessee explaining the points raised in show- cause notice was submitted and IAC after considering the reply observed that:-
(i) A.R. explained that M/s. Milli Collection was not successor of M/s. Milli Shoes Limited and was separate entity since assessm ent year 1997-98 assessed in the hands of Mst. Rubina Iqbal assessee's wife, it is stated that this business was taken over by Mr. Iqbal Ahmad Ansari husband of the wife and had no connection with M/s. Milli Shoes Ltd. I have examined the explanation and found correct.
(ii) it is stated that Paktel connection was in the name of M/s. Milli Shoes Limited but was used by Director Mr. Iqbal Ahmad Ansari after the dissolution of the Company and expenses were paid by him in personal capacity, it is argued that telephone was used for business purposes from where assessee had business income in personal capacity and as such, the assessee, was entitled to claim credit of tax deducted u/S. 50(7F) rightly. The explanation submitted by the assessee is not satisfactory and is the same which has already been rebutted through show-cause notice U/S..66- A, dated 31.12.2001. The assessee has not provided copy of award of distribution of assets of the company to established that Paktel connection fell into assessee's share.
8. The Assessing Officer in fell errors in allowance of credit of tax which was erroneous insofar as it is prejudicial to the interest of revenue. As tax paid u/S. 54 was short to return did not qualify for acceptance under SAS.
(iii) Regarding wealth statement that wealth statement was filed in time specifying all the requirements of scheme, it is explained that 1/2 share of house wasjiot added in assessee's wealth and was declared/assessed in the hands of the assessee previously and there was no motive to hide this information but the figure was omitted inadvertently, it is stated that alleged short document notice was not served upon the assessee as mentioned by this office but was a notice u/S. 62 which was illegal and was duly responded, it is also explained that revisionr of wealth statement rectifying innocent mistake was no way sufficient cause to exclude the case from SAS as no loss of revenue was caused nor any provision of SAS was violated. Accordingly it is stated that proceedings u/S. 66-A were to be filed.
9. The IAC after examining and discussing the reply submitted by the A.R. of the assessee concluded that:--
(a) Assessee's claim that as per original wealth statement only value of 1/2 share was omitted inadvertently is not the full truth. Not only the value of said house was concealed but the value of cash/prize bonds was not declared truly as per original wealth statement. As per revised wealth statement value of house was declared at Rs. 1,096,780/- and value of cash/prize bonds were reduced from Rs. 4,759,622/- to Rs. 3,461,847/-. it is clear that as per wealth exercise submitted alongwith return assessee concealed his assets and furnished inaccurate particulars of income/assets which were rectified through revision of wealth statement.
(b) When the assessee had revised wealth statement the case did not qualify for acceptance under SAS as return fell outside the preview of Section 55 of the Ordinance and that as per scheme of SAS 2000-2001 only returns filed u/S. 55 qualified for acceptance under SAS.
(c) The claim of the A.R. of the assessee that no short document notice was issued but a notice u/S- 62 was issued is also not acceptable. The Assessing Officer duly issued notice for short documents dated 7.2.2001 (it/105A) which was served on 15.2.2001 and was duly replied by the A.R. vide letter dated 6.2.2001. it is worth mentioning that as per said reply the information called for regarding personal expenditure to be incorporated in Part-V of the return was never provided. As such the notice for short documents was not complied within 15 days as instead of provision of information duplicate photo copy of wealth statement which had already been submitted alongwith return was submitted. As notice for short documents was not complied with the return did not qualify for acceptance for under SAS in view of Para- IV(c) of CBR Circular No. 21 of 2000, dated 11.9.2000.
(d) The Assessing Officer ignored all these facts and finalized the appellant even after issuance of Notice u/S. 62 vide his letter No. 430, dated 24.3.2001. The Assessing Officer fell in error to assess the case without lawful jurisdiction u/S. 59(1) of the Income Tax Ordinance, 1979 and as such assessm ent completed was erroneous insofar as it is prejudicial to the interest of revenue.
10. Therefore, the IAC found that the assessment completed u/S. 59(1) by the Assessing Officer for the year 2000-2001 was erroneous insofar as it was prejudicial to the interest of revenue and cancelled the already completed assessm ent u/S. 59(1) with the direction to the Assessing Officer to make the re-assessm ent after providing reasonable opportunity of being heard to the assessee.
3. We have heard both sides and also perused the relevant record. The lAC's earlier observation that assessee was a successor to the business Mrs. Milli Shoes (Pvt.) Limited was not proved from the assessm ent record and this objection was dropped by the IAC. Similarly, the objection with regard to the claim of expenses on Mobile telephone claimed in P & L account and the advance tax paid thereon claimed by the assessee was also not taken up by the IAC as basis for action u/S. 66A.
4. The IAC cancelled the already completed assessment u/S. 59(1) because of non-declaration of 1/2 share of the house which was declared in revised wealth statement at Rs. 1,096,780/- as well as non-declaration of cash/prize bonds worth Rs. 1,297,775/-. The A.R. of the assessee submitted that non-declaration of 1/2 share of the house was an inadvertent mistake and its declaration in the revised wealth statement cannot result in an adverse inference as the house already stood declared in the earlier years. Further the decrease in cash/prize bonds from Rs. 4,759,722/- to Rs.
11. 3,461,847/- will not lead to an adverse inference and that the lAC's observation in this regard are against the accounting methods and provision of law and the revision of wealth statement has not cause any loss of revenue and these objections a sin the case of other objections should have been filed by the IAC. The arguments of the A.R. are well founded. The non-declaration of an existing asset i.e. 1/2 share in house which has been declared in the earlier years does not lead to an adverse inference so as to initiate action u/S. 13 as the asset stands explained. The reduction in the cash/prize bonds on account of these being expended by the assessee or for other reasons and reduced amounts cannot result in any action u/S. 13 as no new asset has been added to wealth of assessee rather the existing assets have depleted.
5. The IAC while initiating action u/S. 66A observed that the assessee has revised wealth statement and the revision of the wealth statement means revision of the return of income and the revised return would fall u/S. 57 of the Income Tax Ordinance, 1979 whereas only the return filed u/S. 55 would qualify for acceptance under SAS 2000- 2001. The A.R. of the assessee argued that Section 58 of the Income Tax Ordinance, 1979 is an independent section and cannot be mingled with Section 55 and has cited the case reported as 2002 PTD (Trib.) 650 where the I.T.AT. held that the non-submission of the wealth statement and acceptance of the return u/S. 59A subsequently, the action u/S. 66A was without jurisdiction, In another case decided by the I.T.A.T. reported as 1999 60 Tax 1 (Trib.) the ITAT, observed :-- "We have no hesitation in holding that a return filed under Section 57 is at par with a return filed under Section 55 in all respects except for its liability to penal action for late filing."
12. The A.R. of the assessee also cited the case decided by Karachi High Court reported as 2001 PTD 623 wherein following question of law referred to High Court for opinion:-- "Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was justified in his directions to accept a return under Section 59(1) which was received under Section 57 or not?"
13. And the Honourable High Court observed:-- "It is an admitted fact that the return was initially submitted by the respondent/assessee under Section 55 of Income Tax Ordinance, 1979, but as there was some mistake/discrepancy in not reflecting mentioning figure of capital gains, in respect of which he claimed exemption, in the relevant column of return a revised return was filed under Section 57 of the Income Tax Ordinance.
14. Such return of income could not be construed or deemed to be a return under Section 57 of the Income Tax Ordinance in view of provisions of Sections 55 and 57 of the Income Tax Ordinance, it is also pertinent to note that Section 57 in itself provides that the furnishing of a revised return at any time before the assessm ent is made under Section 59 of the Income Tax Ordinance is without prejudice to any liability to. which he may subjected to under the provisions of Income Tax Ordinance. Thus, the provisions of Section 57 of the Income Tax Ordinance provide a punishment and make an assessee revise a return under Section 57 o the Income Tax Ordinance initially filed under Section 55 of the Income Tax Ordinance to punitive action. Such an assessee, in our view could not be subjected to any further penalty or liability by way of withdrawal of the immunity from self-assessm ent scheme and subjecting the return to detail assessment without an order containing valid and plausible reasons, In the circumstances, the Income Tax Appellate Tribunal had rightly come to the conclusion that the order of the Income Tax Officer immuning the return of the respondent from self-assessm ent scheme year 1979- 80 was arbitrary and not valid as no valid and plausible reasons in writing were given by him. Accordingly, our answer to this question is in the affirmative."
15. Thus there is no doubt in our mind that the revision of wealth statement by the assessee would not change the status of the return filed. The return filed u/S. 55 cannot be termed as return u/S. 57 due to revision of the wealth statement. We, therefore, do not agree with the finding of the IAC that when th.e assessee had revised wealth statement the case did not qualify for acceptance under SAS as return fell outside the preview of Section 55 of the Income Tax Ordinance, 1979.
6. The IAC has invoked the provision of Section 66A as the notice of short documents was issued and served but the information called for was never provided and as such the return did not qualify for SAS in view of the para. IV(c) of C.B.R. Circular No. 21 of 2000, dated 11.9.2000. The IAC observed that as per reply of the assessee date 6.2.2001 the information called for regarding personal expenditure to be incorporated in Part-V of the return of income was never provided and as such the notice for short documents was not complied with and instead of providing the information, duplicate photo copy of wealth statement which had already been filed alongwith return was submitted. The A.R. of the assessee contended that no notice of short documents was received by the assessee and spirit of the requirement of short documents is to afford an opportunity to assessee for removal of deficiency, if any. The assessment record revealed that the IT-105A was issued on 7.2.2001 calling for personal expenditure statement within 15 days. The assessee's A.R. reply dated 16.2.2001 is also on record which also refers to the notice dated 7.2.2001.
16. The scheme of SAS for the year 2000-2001 has been examined and para. 5 is reproduced as under:-- "(a) The Assessing Officer will make initial scrutiny with respect to provisions of the scheme to determine the acceptability of the return under the scheme;
(b) In case of non-filing or short filing of required documents, the Assessing Officer will serve a notice on the assessee indicating the deficiency to be made up within 15 days of the receipt of such notice;
(c) In case of non-compliance to above notice, the return will fall out of the purview of the Scheme and same will be processed under the normal law;"
17. As per scheme of SAS for the year 2000-2001 the requirement to be submitted alongwith the return has been mentioned in para. 3 of the scheme and relevant para. 3(ii) is reproduced as under:-- "All cases, where accounts are not maintained a proper computation chart showing estimates of purchases, sales, expenditure and copies of wealth statement(s) of proprietor, members of proprietor, members or partners, as the case may be, are filled with the return."
18. The A.R. of the assessee contended that the assessee has discharged its obligation as required under the scheme of SAS for the year under appeal and it would be unfair on the part of the IAC to stretch the provisions of scheme in a manner so as to exclude the case of assessee from SAS. The requirement of the return having been fulfilled the further calling of un-necessary documents cannot deprive the assessee of the benefits of the SAS. The I.T.A.T. in its reported judgment 2002 85 Tax 75 (Trib.) has observed that "even if there was any evasion on the part of the assessee or even there was any lapse on the part of the assessee this did not provide licence to the learned IAC to disregard the provision of law". The Assessing Officer after due consideratibn of the facts of the case and even after issuance of notice u/Ss. 61 and 62 was obliged to process the case u/S. 59(1).
19. This being so we have no hesitation to conclude that IAC has traversed beyond its jurisdiction and the order passed u/S. 66A is without lawful jurisdiction being not based on the facts of the case and in violation of the provision of law. The order passed u/S. 66A by the IAC is cancelled and the order passed u/S. 59(1) by the Assessing Officer is restored.
7. As a result the assessee's appeal succeeds.
20. Appeal succeeded AS PER MUHAMMAD TAUQIR AFZAL MALIK, JUDICIAL MEMBER-- I have the honour to go through the order dictated by my learned brother, Accountant Member. I respectfully disagree with the findings that the order passed by IAC u/S. 66A is a traversed beyond his jurisdiction and without lawful jurisdiction and being not based on facts of the case and being in violation of provision of law, henGe cancelled and order passed u/S. 59(1) by the Assessing Officer is restored.
21. The perusal of the record shows that the assessment in this case for the charge year under appeal was finalized u/S. 59(1) of the Income Tax Ordinance, 1979 by Assessing Officer. That the IAC took action under Section 66A and finally cancelled the order passed u/S. 59(1) ad directed its reassessm ent. The main contention of the IAC which is the basis of action u/S. 66A has been reproduced in my learned brother's order on page-4 as below:-- "The IAC after examining and discussing the reply submitted by the A.R. of the assessee concluded that:--
(a) Assessee's claim that as per original wealth statement only value of 1/2 share was omitted inadvertently is not the full truth. Not only the value of cash/prize bonds was not declared truly as per original wealth statement. As per revised wealth statement value of house was declared at Rs.
22. 1,096,780/- and value of cash/prize bonds were reduced from Rs. 4,759,622/- to Rs. 3,461,847/-. it is clear that as per wealth statement submitted alongwith return assessee concealed his assets and furnished inaccurate particulars of income/assets which were rectified through revision of wealth statement.
(b) When the assessee had revised wealth statement the case did not qualify for acceptance under SAS as return fell outsicfe the preview of Section 55 of the Ordinance and that as per scheme of SAS 2000-01 only returns filed u/S. 55 qualified for acceptance under SAS.
(c) The claim of the A.R. of the assessee that no short-document notice was issued but a notice u/S. 62 was issued is also not acceptable. The Assessing Officer duly issued notice for short documents dated 7.2.2001 (it/105A) which was served on 15.2.2001 and was duly replied by the A.R. vide letter dated 6.2.2001. it is worth mentioning that as per said reply the information called for regarding personal expenditure to be incorporated in Part-V of the return was never provided. As such the notice for short documents was not complied within 15 days as instead of provision of information duplicate photo copy of wealth statement which had already been submitted alongwith return was submitted. As notice for short documents was not complied with the return did not qualify for acceptance for under SAS in view of Parade) of CBR Circular No. 21 of 2000, dated 11.9.2000.
(d) The Assessing Officer ignored all these facts and finalized the assessment even after issuance of Notice u/S. 62 vide his letter No. 430, dated 24.3.2001. The Assessing Officer fell in error to assess the case without lawful jurisdiction u/S. 59(1) of the Income Tax Ordinance, 1979 and as such assessm ent completed was erroneous insofar as it is prejudicial to the interest of revenue.
23. Therefore the IAC found that the assessment completed u/S. 59(1) by the Assessing Officer for the year 2000-2001 was erroneous insofar as it was prejudicial to the interest of revenue and cancelled the already completed assessm ent u/S. 59(1) with the direction to the Assessing Officer to make the reassessm ent after providing reasonable opportunity of being heard to the assessee."
24. I will like to further add in it as follows:-- The one half share value of the house, which was omitted is Rs. 10,96,780/-. But the decrease in the wealth statement is of Rs. 13,27,975/-. This discrepancy in cash/prize bonds, had to be explained by the assessee. Otherwise there can be an addition in his income to the above-said extent if the filing of revised wealth statement is not satisfactorily explained. Therefore, there was no occasion for the Assessing Officer to have passed an order u/S. 59(1). The assessment should have been made u/S.
62. Hence the action taken by IAC u/S. 66A is justified and should be upheld. Anyhow, the assessee can explain his position regarding the discrepancies in cash before the Assessing Officer.
25. In view of the above, following Court is framed for reference to the third member.
26. "On the facts and circumstances of the case, the assessment u/S. 59(1) has been rightly cancelled and the provisions of Section 66A rightly invoked?"
27. The Honourable Chairman is requested to refer the case for third Member's opinion MUHAMMAD TAUQIR AFZAL MALIK, JUDICIAL MEMBER and JAVED TAHIR BUTT, ACCOUNTANT MEMBER--lt has been mutually agreed that the questions of both the Members be referred to the Honourable Chairman for referring it to the third Member's opinion. The questions are summed up as under:--
(1) Whether on the facts and circumstances of the case, the assessment u/S. 59(1) has been rightly cancelled and the provisions of Section 66-A rightly invoked?
(2) Whether non-declaration of assets, which were declared in the, earlier years and stand explained can cause loss to the Revenue?
(3) Whether the decrease in assets can result in loss of Revenue?
28. The Honourable Chairman is requested to refer the case for third Member's opinion.
29. SYED NADEEM SAQLAIN, JUDICIAL MEMBER-- The third appeal pertaining to the assessment year 2000-01 has been referred to me by the worthy Chairman for resolving the difference of opinion having arisen arose between the learned Accountant Member and the learned Judicial Member on the issue that assessment u/S. 59(1) of the repealed Income Tax Ordinance, 1979 (hereinafter called the repealed Ordinance) has been rightly cancelled and the provisions of Section 66A rightly invoked. The following questions have been referred for adjudication:--
(1) Whether on the facts and circumstances of the case the assessment u/S. 59(1) has been rightly cancelled and provisions of Section 66- A rightly invoked.
(2) Whether non-declaration of assets which were declared in the earlier year and stand explained can cause loss to the Revenue.
(3) Whether the decrease in assets can result in loss of Revenue.
30. The brief facts giving rise to the case are that learned IAC cancelled the assessment finalized u/S. 59(1) after finding the same to be erroneous and prejudicial to the interest of Revenue. The assessee being aggrieved preferred appeal before the ITAT. The learned IAC confronted the assessee through show-cause notice that his return was to be regarded as revised return u/S. 57 of the repealed Ordinance and should not have been considered to be filed u/S. 55 to be accepted under SAS for the year under consideration. The assessee submitted reply to show-cause notice which was found unsatisfactory. The learned IAC again issued another show-cause notice dated 31.12.2001 u/S. 66A seeking further information/explanation. The contents of show-cause notice have been reproduced on pages 3 and 4 above. The learned IAC concluded that assessee's claim that as per original wealth statement only value of 1/2 share was omitted inadvertently was not the whole truth and that the assessee had revised wealth statement. Therefore, the case of the assessee did not qualify for acceptance under SAS since the return fell outside the purview of Section 55 of the Ordinance and that as per scheme of SAS 2000-01 only returns filed u/S. 55 qualified for acceptance under SAS. The learned IAC also observed that no short document notice was issued. The learned IAC after finding the reply of the assessee to be not convincing cancelled the appellant completed u/S. 59(1). The assessee being not satisfied approached the Tribunal. My learned brother the Accountant Member while disposing of the above appeal observed that the IAC cancelled the already completed assessment u/S. 59(1) because of nondeclaration of 1/2 share of the house which appeared in revised wealth statement at Rs. 1,096,780/- as well as nondeclaration of cash/prize bonds worth Rs. 1,297,775/-. The A.R. of the assessee at the time of hearing of appeal on 12.6.2002 submitted that non-declaration of 1/2 share of the house was an inadvertent mistake and its declaration in the revised wealth statement cannot result in an adverse inference as the house already stood declared in the earlier years and the asset remains explained being brought forward from earlier years. Further the decrease in the cash/prize bonds from Rs. 4,759,722/- to Rs. 3,461,847/- will not lead to an adverse inference and that the lAC's observations in this regard are against the accounting methods and provisions of law and the revision of wealth statement has not caused any loss of revenue. The arguments of the A.R. wee found well-founded by my learned brother the Accountant Member. The nondeclaration of an existing asset i.e, 1/2 share in house which has been declared in the earlier years does not lead to an adverse inference so as to initiate action u/S. 13 as the asset stands explained. The reduction in the cash/prize bonds on account of these being expended by the assessee or for other reasons and reduced amounts cannot result in any action u/S. 13 as no new asset has been added to wealth of assessee rather the existing assets have depleted. The learned Accountant Member further observed that the IAC while initiating action u/S. 66A stated that the assessee has revised wealth statement and the revision of the wealth statement means revision of the return of income and the revised return would fall u/S. 57 of the repealed Ordinance whereas only the returns filed u/S. would qualify for acceptance under SAS 2000-2001. The A.R. of the assessee argued that Section 58 of the repealed Ordinance is an independent section and cannot be mingled with Section 55 and has cited the case reported as'2002 PTD (Trib.) 650 where the I.T.A.T. held that the non-submission of the wealth statement and acceptance of the return u/S. 59A subsequently, the action u/S. 66A was without jurisdiction, In another case decided by the I.T.A.T. reported as 1999 80 Tax 1 (Trib.) the I.T.A.T. observed:-- "We have no hesitation in holding that a return filed under Section 57 is at par with a return filed under Section 55 in all respects except for its liability to penal action for late filing."
31. The A.R. of the assessee also cited the case decided by Karachi High Court reported as 2001 PTD 623 wherein following question of law referred to High Court for opinion:-- "Whether on the acts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was justified in his directions to accept a return under Section 59(1) which was received under Section 57 or not?"
32. And the Honourable High Court observed:-- "It is an admitted fact that the return was initially submitted by the respondent/assessee under Section 55 of the Income Tax Ordinance, 1979, but as there was some mistake/discrepancy in not reflecting/mentioning figure of capital gains, in respect of which he clain id exemption, in the relevant column of return a revised return was filed under Section 57 of the Income Tax Ordinance.
33. Such return of income could not be construed or deemed to be a return under Section 57 of the Income Tax Ordinance in view of provisions of Sections 55 and 57 of the Income Tax Ordinance, it is also pertinent to note that Section 57 in itself provides that the furnishing of a revised return at any time before the assessm ent is made under Section 59 of the Income Tax Ordinance is without prejudice to any liability to which he may be subjected to under the provisions of Income Tax Ordinance. Thus, the provisions of Section 57 of the Income Tax Ordinance provide a punishment and make an assessee revise a return under Section 57 of the Income Tax Ordinance initially filed under Section 55 of the Income Tax Ordinance to punitive action. Such an assessee, in our view could not be subjected to any further penalty or liability by way of withdrawal of the immunity from self-assessm ent scheme and subjecting the return to detail assessment without an order containing valid and plausible reasons, In the circumstances, the Income Tax Appellate Tribunal had rightly come to the conclusion that the order of the Income Tax Officer immuning the return of the respondent from self-assessm ent scheme year 1979- 80 was arbitrary and not valid as no valid and plausible reasons in writing were given by him. Accordingly, our answer to this question is in the affirmative."
34. The learned Accountant Member was of the view that the revision of wealth statement by the assessee would not change the status of the return filed, hence the return filed u/S. 55 could not be termed as return u/S. 57 due to revision of the wealth statement. The learned Accountant Member, therefore, did not agree with the findings of the IAC that when the assessee had revised wealth statement, the case did not qualify for acceptance under SAS as return fell outside the preview of Section 55 of the repealed Ordinance.
35. The findings of the learned IAC while invoking Section 66A for the reason that the notice of short documents was issued and served but the information called for was never provided and as such the return did not qualify for SAS in view of the para. IV(c) of C.B.R. Circular No. 21 of 2000, dated 11.9.2000 also did not find favour with the learned Accountant Member.
36. As regards the observations made by my learned Brother, the Judicial Member, Mr. Tauqir Afzal Malik that the assessee had to explain the discrepancy in cash/prize bonds having arisen in the revised wealth statement, the Assessing Officer was not justified in passing an order under Section 59(1) of the repealed Ordinance, the learned Judicial Member was of the view that rather the order should have been made u/s. 62 of the repealed Ordinance, hence the action taken by the learned IAC under Section 66A was justified and should have been upheld, it was not moot point since this issue was neither urged by the assessee at any stage, nor dilated upon by the learned A.M.
37. At the time of hearing the learned A.R. of the assessee has repeated the contentions taken at the time of hearing of original appeal to re-emphasize his assertions. He has further relied on reported decision (2002) 85-Tax 148 (Trib.) and 2004 PTD (Trib.) 2449 to contend that the action taken by the learned IAC was unjustified. The learned A.R. stated that in the reported decision cited as 2994 PTD (Trib.) 2449 it has been held:-- - "Admittedly the information on the basis of which the assessment had been cancelled was already in possession of the department and was considered by the Assessing Officer while passing the order under Section 59A of the Income Tax Ordinance, 1979. Order was purely passed on surmises and conjectures and Revenue could not be given a free hand to apply the revisional power on surmises and conjectures and the erroneousness of the order and it being prejudicial to the interest of Revenue should have been spelled out in a unequivocal language."
38. The learned D.R., on the other hand has supported the order of the learned IAC and the Judicial Member for the reasons stated therein.
39. After hearing both the sides and going through the order passed by the learned IAC as well as the reasons recorded by my learned Brothers, the Accountant Member and the Judicial Member, I fully agree with the findings recorded by my learned brother, the Accountant Member. I am constrained to observe that the learned Judicial Member while disagreeing with the findings recorded by the learned Accountant Member did not advert to the real issue discussed by the learned Accountant Member. After going through both the orders passed by the Assessing Officer as well as the learned IAC and findings recorded by my learned brother, the Accountant Member, it is crystal clear that the actual grievance urged by the assessee was that the IAC could not invoke Section 66A of the repealed Ordinance just for the reason that the assessee has filed revised wealth statement and, therefore, the case stands excluded from the purview of Section 59(1) of the Ordinance. The case relied upon by the learned A.R. of the assessee cited as 2004 PTD (Trib.) 2449 cited (supra) is on all fours to the case of the assessee. I therefore, agree with my learned brother, the Accountant Member that there was no justification with the leamed IAC to pass order under Section 66A, hence the order passed by the Assessing Officer under Section 59(1) is restored,