1. ORDER JAWAID MASOOD TAHIR BHATTI, JUDICIAL MEMBER - The appellant through this appeal has objected to the impugned order of the learned CIT(A) dated 7.10.2005 on the following grounds:- "(1) That the order of the learned CIT(A) is against the facts and circumstances of the case as. The case of the assessee for the charge year 2002- OS was selected for Audit by the Regional Commissioner, Central Region, Multan vide under Para 9(a)(ii) of CBR's Circular No. 7 of 2002.
(2) That order of the learned CIT(A) is not maintainable in the eyes of the law as the Honourable Federal Tax Ombudsman had already rejected the view point of the assessee through Complaint No. 518/2003, dated 18.11.2003 on the basis of exclusion of case from SAS and selection thereof under Para S(a)(ii) of the Circular No. 7 of 2002.
2. After perusal of the above-said grounds, I am of the view that the grounds are vague, un-specific and against the ITAT Rules. Even otherwise, after perusal of the impugned order of the learned CIT(A) I have found that he has given full justification for' directing to accept the return under SAS.
3. Although it has been contended by the learned DR that after dismissal of the appeal filed before F.T.O. By the present assessee and two revision petitions before the Commissioner of Income Tax there was no justification for directing to accept the return of the assessee under SAS but I am of the view that the directions made by the learned CIT(A) considering the facts and circumstances of the case are in accordance with law. The observations of the learned CIT(A) in this regard are reproduced hereunder:-- "I have heard the learned A.R. And considered contentions of both the parties. Perusal of record shows that return for the assessm ent year under consideration was filed under SAS declaring net income at Rs. 6,80,000/-. The return was selected for total audit under para 9(a)(ii) of CBR's Circular No. 7 of 2002 by the RCIT, Multan vide order dated 21.1.2003 being the case of revenue potential one as well as for suppression of income. On selection of the case for total audit, a complaint before the Honourable FTO was lodged which was disposed of against the appellant and even review application filed by the appellant was rejected as mentioned in the body of the impugned order. Proceedings for completion of assessment under total audit were started by issuing notice u/S. 61 accompanying a letter dated 13.6.2005 as case was going to be barred by time on 30.6.2005. The contents of the said letter have been reproduced in the order, In response, the appellant's A.R. Requested for adjournment twice. Finally, a show-cause notice- dated 24.6.2005 alongwith notice u/S. 61 fixing the case for 28.6.2005 was issued. Contents of the said notice have also been quoted in the order. Reply dated 27.6.2005 was filed requesting to withdraw the aforesaid notice and keep the proceedings pending till the final decision of the Honourable High Court. However, keeping in view fact of the limitation in the light of provisions of Section 64 of the repealed ii. Oome Tax Ordinance and no stay order operative beyond six months of High Court the assessm ent was finalized at net income of Rs. 11,00,000/-.
4. Contention of the learned A.R. Is that selection of the case for total audit by the RCIT is against the spirit of the scheme of the SAS for the assessment year 2002-03. In act, there were two schools which Were being assessed under separate NTNs (i) Mrs. Salma Anwar Prop. Multan Gems School for Girls, Sher Shah Road, Multan Cantt. Bearing NTN 4-16- 0801398-5 and (ii) Miss Ayma Syed School, Prop. Multan Gems School for Boys, 20-Abdali Colony, Multan having NTN 04-16-0720126-5.
5. Through a valid contract between the above two assessee entered on 1.7.2001, the present appellant succeed the other school namely Multan Gems School for Boys. The present appellant declared income from both the schools under SAS and paid tax as per scheme. To this effect, attention of this forum was invited towards para 1.2. Explanation Clause (iii) of the Self Assessment Scheme for the year under consideration which reads as under:-- "Where an existing assessee takes over the business of another existing assessee, the comparison of tax shall be made with the tax payable by the Successor or the Predecessor, whichever is the higher."
6. It is stressed that the appellant fulfills the above condition as in the preceding year, higher tax paid by the appellant was Rs. 80,300/- whereas the predecessor paid tax at Rs. 74,800/- on agreed basis for the year 2001-02 which was lower. Thus the appellant has paid tax amounting to Rs.
7. 1,15,500/- for the assessm ent year under appeal, which is in conformity with the said provisions of SAS scheme for the year under consideration, It is emphasized that when the appellant duly meets the requirements of the stipulations of the Self Assessment Scheme for the assessment year 2002- 03, there is no justification to deprive the appellant from the benefits of the said scheme by selecting the return as per guidelines of the RCIT which is not only arbitrary but also against the law.
8. In view of the aforesaid discussion, it is concluded . That there is weight in the arguments of the learned A.R. Para (iii) of the Explanation of the said Circular for the Self Assessment Scheme for the year under consideration is crystal clear on the issue involved, In this case an existing assessee took over the business of another existing assessee, the comparison of tax with tax payable by the successor is no doubt on the higher. Thus there is no ambiguity. Prima facie the return filed under SAS duly fulfills the conditions of the Explanation of clause (iii) para. 1.2 of the said Scheme, In view of the above, the Taxation Officer is directed to accept the return under SAS."
9. After considering the above-said observations of the learned CIT(A), I find no warrant for interference in his order which is upheld and the appeal tiled by the department is dismissed.