1. The titled appeals have been filed at the instance of the appellant-company, calling in question the impugned orders dated 31.5.2005 and 8.6.2005 passed by the learned CIT/WT (Appeals-Zone), Gujranwala for the assessm ent years 2001-2002 and 2002-2003. As per grounds of appeal, the appellant-company mainly assailed the following common issue in both the years:-- "That the learned first appellate authority is legally not justified inasmuch as setting aside the whole assessm ent against the prayer for giving finding on the escaped grounds which need proper dilation."
2. Briefly stated the facts of this case are that the appellant, a private limited company, which continued to derives income from manufacturing and sale of 'ball point pens and fiber tips pens'.
3. Returns of total income for the assessment years under appeal were filed by declaring net income at Rs. 18,91,836/- and Rs. 1,09,16,742/- respectively. To finalize the assessments, the Assessing Officer issued statutory notices u/S. 61 of the I.T. Ordinance, 1979 to the assessee-appellant, in response thereto, the A.R. Of the assessee was appeared to whom the case was discussed in detail by the ACIT/WT, Circle-02, Gujranwala. For the assessment year 2001-2002, the assessee has shown the total purchases of Rs. 20,06,36,455/- which mainly consist of imports apart from materials purchased from local market. The Assessing Officer made addition u/S. 13(1 )(d) by valuation of opening stock by drawing the inference that the assessee has not truly disclosed his "opening stock of tampons". Sales of garbage wastage estimated at Rs. 36,76,200/- against declared sales of Rs. 16,87,332a During the assessm ent year 2002-03, the Assessing Officer estimated the sales of moulds at Rs. 45,00,000/- on the ground that the company has failed to provide the sale rate and actual quantity sold and also on the ground that since sales were made to other sister concern, the unverifiability cannot be denied. The Assessing Officer made certain additions under the heads "production overheads', at R1 13,71,353/-, 'suppressed production' at Rs. 2,76,760/- and also made certain additions under the P&L account expenses for the detailed reasons as mentioned therein and finally assessed the net income at Rs. 4,39,45,427/- and Rs. 7,08,81,741/- for the assessment years 2001-02 and 2002-03 respectively.
4. Being aggrieved, the appellant-company went in appeal before the learned CIT (Appeals-Zone), Gujranwala by taking the plea that the learned CIT (Appeals) vide orders dated 1.2.2003 and 7.10.2003, has not properly considered the overall facts of the case and he has simply give his finding regarding the issues as mentioned in the appellate orders for the two years under appeal.
5. Against this treatment, the appellant-company filed rectification applications for the assessment years 2001-02 and 2002-03, whereby the learned CIT(A) vide orders cited (supra), admitted the rectification applications on the ground that the Assessing Officer has not given adequate opportunity to explain his version before making the impugned assessments. The learned CIT (Appeals) accordingly set aside the case and remanded the same back to the Assessing Officer with the direction to reframe afresh after giving full opportunity and confronting the assessee- appellant regarding the proposed treatment. Hence the present appeals are contested before us.
6. We have heard the rival arguments of both the sides and perused the orders passed by the authorities below. The learned A.R. Of the assessee argued at length that it was beyond the jurisdiction of the learned CIT (Appeals) to have set aside the entire assessment made in the case for the assessm ent years 2001-01 and 2002-03 against the prayer for giving a finding on the escaped ground which only needed proper dilation, In this context, the learned A.R. Submitted that the orders passed by the authorities below dated 31.5.2005 and 8.6.2005 had in fact superceded the orders passed in the case for the assessment years 2001-02 and 2002-03 by his predecessor, (CIT-Appeals) dated 1.2.2003 and 7.10.2003 by setting aside the case and remanding it back to the Taxation Officer with the directions to frame a fresh order after giving the assessee full opportunity and confronting him regarding any objections the Taxation Officer has. According to the learned A.R., the above set of directions was beyond the competence of the successor, CIT (Appeals). To support his contention, the learned A.R. Relied on a number of reported cases which are cited as [(2O0O) 82 Tax 96 (Trib)], 2000 PTD (Trib.) 3752, 1993 PTD (Trib.) 964, 1987 PTD (Trib.) 66, and 1997 PCTLR 604. It would be relevant to reproduce here the operating part of the judgment reported as [(2O0O) 82 Tax 96 (Trib.)l which is on 'all fours' with the case of the assessee:-- "The action of the successor CIT (A) in invoking the provisions of Section 156 to rectify the order of his predecessor in office is found to be illegal for the reason that the predecessor in office has recorded firm findings after discussing exhaustively all pertinent aspects and these findings are not open to Review by successor CIT (A). That being so, the appellant was required to file formal appeal against the appellate order of (predecessor) CIT (A) rather than move a rectification application before successor CIT (A). As successor GIT (A) had no jurisdiction in law to take action u/s. 156 in the manner done by him in the present case, we, therefore, annul the order of successor CIT (A) and restore the order of predecessor CIT (A)."
7. In view of the preceding position, we are inclined to agree with the contentions of the learned A.R.
8. That the CIT (A) acted beyond his jurisdiction in setting aside the case for assessment years 2001- 02 and 2002-03 and in view of which the order of the learned CIT (Appeals) is vacated and that of his predecessor dated 1.2.2003 and 7.10.2003 are restored accordingly.
9. The appeals are succeed as above.