Through the titled appeals, the. Department calls in question the combined first appellate order dated 27.12.2007 on the common sole ground that the learned CIT/WT (A), Zone-1, Lahore was not justified in holding that rejection of refund application was illegal, therefore, not sustainable in the eyes of law.
2. Relevant facts of the case under consideration are that the respondent-assessee in an AOR deriving income from providing transport services. At first stage, the respondent-assessee preferred appeals against the order passed u/S. 170 of the- Income Tax Ordinance, 2001 by the Taxation Officer, MTU, Lahore for the tax years 2003 to 2005 which were disposed of by the learned CIT(A) with the following findings:-- "After considering the rival arguments and following the judgments of superior Courts cited by the A.R., I am of the opinion that normal returns filed for the first time are liable to be accepted, It was observed that rejection of appellant's application for refund for all the three years under appeal by the Taxation Officer was illegal and not sustainable in the eyes of law. The Taxation Officer is accordingly-directed to accept, the returns and proceed in accordance with the provisions of law."
3. Heard both sides and perused relevant orders,
4. After hearing the contentions of both the parties and perusal of the relevant orders, it is observed that applications requesting for issuance of refund vouchers were filed but by an order u/S. 170(4) of the Income Tax Ordinance, 2001, the Taxation Officer refused the same. For rejecting these applications, the plea as expressed in the impugned order is that originally statement u/S. 115(4) for a complete discharge of liability was filed, thereafter the income tax returns with the claims of refund were filed and subsequently the returns were by revising earlier statutory statements, In this background of the matter, the Taxation Officer rejected the refund applications. However, the leamed First Appellate Authority by recording the findings reproduced supra has allowed the relief.
5. Under these circumstances, we do not feel any reluctance in expressing ourselves in an unequivocal manner that, revising of the entire assessment is not permissible u/S. 170(4) of the Income Tax Ordinance, 2001. The proper course for the department was to initiate under the proper provisions of law to amend any assessment as Section 170(4) does not empower any such type of .Proceedings as have been undertaken by the Taxation Officer which are beyond his jurisdiction.
Accordingly, this order is to be cancelled being void, illegal ab initio. As far as the fate of refund applications is concerned, these are not hit by such illegal order which is to take its legal course.
Keeping in view the discussion supra and the reasons recorded in the impugned order, the order passed by the learned First Appellate Authority is maintained In the result, the departmental appeals having no substance are dismissed accordingly.