Out of these six appeals, one for the assessment year 1996-97 has been filed by the department against the consolidated impugned order of the learned CIT (A) dated 26.6.2004 for the assessm ent years 1996-97 and 2000-01 to 2002-03 cancelling the order passed under section 156 of the repealed Ordinance, 1979 on the basis of time limitation. Out of the remaining five appeals, one is for the assessm ent year 2002-03 against the impugned order of the learned CIT (A) dated 4.4.2005 while the other four are against the consolidated impugned order dated 1.9.2004 for the assessm ent years 1998-99 to 2001-02. The assesses for all the four years under review has objected the set aside of the assessments for all the five years. For all the five years the assessee has also objected to the rejection of accounts on the point that as the declared results in the previous year have been accepted, therefore, there was no justification for rejection for the years under review. For the assessm ent years 2001-02 and 20,02-03 the rejection of accounts has been objected on the-ground that-no specific notice under section 62 confronting the assessee regarding deficiency in the books of. Accounts have, been confronted which is the mandatory requirement. For all the five-years the disallowances made under the P&L account has been objected. For the assessm ent year 1998-99 the casting of error of Rs.50,000/- has objected while for the assessm ent year 2002-03 in addition to the above referred grounds, the depreciation disallowed without notice under section 62, ocean freight and shipping expenses added in export sales, tax levied under sections 80-CC and 80-D, interest income charged to tax under section 30 and charge of Workers Welfare Fund have also been objected.
2. We have heard the learned Representatives from both the sides and have also perused the impugned orders, the case-law referred by the learned counsel and other record of the case.
3. Regarding th appeal filed by the department for the assessment year 1996-97 we have found that he has cancelled the order with the following observations:-- "The original assessm ent for the year was completed on 10.2.1998 and was subsequently rectified on 24.6.2000, Appeal effect under section 135 was allowed on 30.6.2001. The assessing officer rectified the order passed for the year 1996-97 on 31.12.2002, The appellant aggrieved by this order has agitated the order passed under section 156 on 3.12.2000 as barred . By limitation as provided under section 156. Even Otherwise it was alleged that mistake sought to be rectified was outside the scope of section 156, The AR during the course of appeal proceedings has vehemently contested the order on technical grounds it being barred by time, It was pleaded that the time for action under section 156 is four years from the date of original assessment order, It was further pleaded that the limitation has to be calculated from the date of original order. He relied on case reported as (1998)
54. The AR further argued that the rectified order merges with the original. Order i.e. The assessm ent order and, therefore, the limitation runs from the original order instead of rectified order. He drew support from a reported case 2002 PTD 2407.
After perusing the case law relied upon by the appellant and the facts of the case I am of the considered opinion that limitation for rectification starts from the date of original order thus order u/s. 156 passed on 31.12.2002 after the lapse of four years is without lawful jurisdiction."
4. After perusal of the above observations of the learned CIT(A) we are of the view that the learned CIT(A) has rightly cancelled the order under section 156 as the limitation in this respect has already expired.
5. The appeal filed by the department is, therefore, dismissed.
6. Regarding the rejection of accounts, we have found that the assessee in this case is a public limited company quoted on Stock Exchange deriving income from manufacturing and sale of chip board/hard board and .Formaldehyde and formalin etc. And from running a cotton spinning unit.
Admittedly, the books of accounts are being maintained and were furnished before the assessing officer who has examined the same and using stock phrases has rejected the declared version, It is to note that the assessm ent for the assessment year 1998-99 was set aside during the course of first round before the learned CIT (A) With the specific direction to decide the whole assessment afresh in the light of the order of the CIT (A) for the assessment year 1997-98 as well as the decision of this Tribunal for the assessm ent years 1990-91 to 1995-96. It was specifically directed by the learned CIT (A) that in case of departure from the history and directions contained in the above referred decisions valid reasons must be recorded in the body of the assessment order but the Taxation Officer has once again ignored the directions and the previous order of the learned CIT
(A) as well as of this Tribunal in the case of the assessee. We deprecate the tendency of ignoring or bypassing the decisions of the superior Courts on the part of the revenue authorities. We have already held in many cases that this tendency needs to be curbed for better administration of justice, observance of discipline and maintaining the rule of consistency. Once on behalf of the assessee the explanation regarding the decline in the sales or the GP rate has been explained there was no justification for rejection of the declared version. We have further noted that in the assessm ent years 2001-02 and 2002-03 ho notice under section 62 confronting the assessee regarding the discrepancies in*the books of accounts has been sent to the assessee which is the mandatory requirement in the cases where the books of accounts are being maintained. On behalf of the assessee a long list of the case law has been placed before us wherein it has been held that the history of the assessee should not be ignored without bringing on record the distinguishing factor from the previous assessm ent year if the fashion of maintaining the accounts has remained the same.
7. Like-wise the cases wherein it has been held that the matter should not be set aside where the history is of acceptance of accounts and the assessment has been made on the personal whims of the Taxation Officer, In this regard following cases have been referred:- "[(1994) 69 TAX 258 (Trib.)] [(20O2) 86 TAX 117 (H.C. Kar.}] * [(2006) 93 TAX 75 (H.C.Kar.)].
[(20O2) 85 TAX 21 (Trib.)] [(2003) 88 TAX 48 (Trib.) = 2003 PTD (Trib.) 2668 [(200I) PTD (Trib.) 2938] [(2005) 91 Tax 1 (Trib.)] = 2005 PTD (Trib.) 1208 [(2005) 91 Tax 1 (Trib.)] = 2005 PTD (Trib.) 1208 (Vol.8 No. 5 TAX FORM 62 (Trib.)] [(1999) 79 TAX 263 (Trib.)] [(200I) 83 TAX 299 (H. Lah.)] .
1(2001) 83 TAX 299 (H.C. Lah)].
[(200I) PTD (Trib.) 2941] [(2005)91 Taxi (Trib.)] ., '
1994 PTD 516 (H.C. Kar.)"
8. The learned counsel has also placed before us the decision of the Hon'ble High Court as well as of this Tribunal wherein .It has been held that the low GP rate is not a valid ground for the rejection of accounts, In this regard following cases have been referred:- "[(2005) 91 Tax 1 (Trib.) = 2005 PTD (Trib.) 1208 [(1962) 5 TAX 24 (Trib.) . .
[(1974) 29 TAX 120 (H.C. Kar)] [(1984) 50 TAX 183 (H.C. Kar)] [(1985) 52 TAX 115 (HC Kar)] [(200I) 83 TAX 275 (Trib.)]"
9. After considering the above referred case law and facts arid circumstances of the case, specifically the previous history of the case, we find no justification for the rejection of the accounts in this case. The impugned order of the learned CIT (A) in this regard is, therefore, vacated and the declared trading results are directed to be accepted.
10. Regarding the disallowances we are, however, of the view that, as the Taxation Officer has mentioned in the assessm ent order that the disallowances have been made as per history of the case but the learned CIT (A) has set aside all the five assessments being not in accordance with the previous history, therefore; the appeals filed in this regard are dismissed, It is, however, directed that the assessing officer to make the disallowances if required shall make after keeping in view the previous history or to give specific reasons, for the disallowances after confronting the assessee in this regard.
11. Like-wise the set aside of the assessment for the assessment year 2002-03 regarding levy of tax under sections 80-CC and 80-D and on the issue of W.W.F. Is also up-held. The Taxation Officer in this regard is, however, directed to make the fresh assessment in accordance with law keeping in view the decisions of this Tribunal as well as of the Hon'ble High Court which have been referred before us by the learned counsel for the assessee, who is directed to place the same before the Taxation Officer.
12. The appeal filed by the department for the assessment year 1996-97 is dismissed while the remaining five appeals filed by the assessee are decided in the manner as referred above.