NASIM SIKANDAR, J- In this Constitutional petition following prayer has been made:- "It is respectfully prayed that the Hon'ble High Court may be pleased:
(1) to declare that the impugned notice dated 31.3.2005 issued under Section 122(9) alongwith its superstructure built thereon by way of order dated 28.5.2005, passed u/S. 122(1) of the Income Tax Ordinance, 2001 are illegal, Without lawful jurisdiction and of no legal effect.
(2) to restrain the respondent from proceeding to effect recovery of tax on the basis of demand notice dated 28.5.2005 issued u/S. 137(2) of the Income Tax Ordinance, 2001, for Rs. 2,70,497/-till the decision of this petition."
2. The petitioner is an individual and an assessee of the Income Tax Department. He claims to be a nonresident of Pakistani origin having settled in Muscat for the last about 24 years. For the assessm ent year 2000-01 he was assessed under Section 62 of the repealed Income Tax Ordinance, 1979 at total income of Rs. 3,23,430/-, by way of assessment order dated 12.6.2003. For the assessm ent years 2001-02, and 2002-03 he returned net income from property at Rs. 3,08,630/- and Rs. 10,09,989/- respectively which was deemed to have been assessed under Section 59(4) of the late Income Tax Ordinance, 1979 on 30.6.2002 and 30.6.2003 as no order was passed by that date. Subsequently, the Commissioner while proceedings under Section 122 of the Income Tax Ordinance, 2001 amended the three assessments and enhanced the income from rent. The notices issued in that regard and the subsequent amendment of the assessments made by the Commissioner are challenged through three petitions with common prayed noted above.
3. Heard the learned counsel for the parties. At the very outset learned counsel for the petitioner submits that the said provisions of Ordinance, 2001 could not be invoked before 1.7.2003. in support of his submissions reliance is placed upon the ratio settled in re: Honda Shahrah-e-Faisal v. RCIT 20Q5 PTD 1316 (HC, Karachi) and in re: M/s. Sarina Ind. (Pvt.,) Ltd. v. CIT, Peshawar (2006 PTD 2474 (HC, Pesh.) In the two cases cited at the bar while interpreting the provisions of sub-section (5A) of Section 122 of the Ordinance, 2001 it was found that these provisions inserted with effect from 1.7.2003 were not retrospective in operation and Secondly that the assessments finalized before 1.7.2003 could not be reopened/revised or amended in exercise of jurisdiction under these provisions.
4. In re: Kashmir Edible Oil Ltd. v. FOP (2005) 91 Tax 480 (HC, Lahore) besides the above it was further held that under Section 122 of the Income Tax Ordinance, 2001 the Commissioner was vested with the power to amend an assessm ent order earlier made by him or treated to have been issued under Section 120 or 121 of the Income Tax Ordinance, 200I. The provisions enabling the Commissioner to amend assessm ents issued under Section 59, 59-A, 62, 63 or 65 of the repealed Income Tax Ordinance, 1979 were inserted by way of an amendment in the Income Tax Ordinance, 2001 through the Finance Act, 2002. Therefore, in view of his Lordship the earlier orders having been passed by the Deputy Commissioner and Addl. Commissioner were not open able under Section 122(2) of the Income Tax Ordinance, 2001.
4. Since the three orders were made or deemed to have been finalized in the case of the assessee before 1.7.2003, in view of the ratio settled in the aforesaid three judgments, the revenue was not competent to initiate the impugned proceedings or to pass the impugned assessment orders by resort to the said provisions of the Ordinance. The amendment of (the original assessments by way of the impugned assessm ents is, therefore, declared to be illegal and without jurisdiction.
3. Petition accepted.
4. This order will also govern Writ Petitions Nos. 11482 and 11488 of 2005.