' MUNSIF KHAN MINHAS (JUDICIAL MEMBER).---This miscellaneous application has been filed by the assessee-applicant for rectification of an order passed by the Appellate Tribunal Inland Revenue in Income Tax Appeal No,761/IB of 2010, dated 9-8-2010 pertaining to assessment year 2002-2003 on the following points:--
(1) That the above appeal was heard and decided by this honourable Tribunal vide its Order No, 761/IB/2010 dated 9-8-2010 (Annexure-"A").
(2) That the finding given by the honourable Tribunal Inland Revenue in para 8 of the said order is reproduced as under:-- "8.... The learned RCIT on 20-3-2003 has informed assessee that its case has not been selected for audit while case of assessee itself, did not qualify for self-assessment because declared tax liability was not higher by 10% as compared to tax assessed for assessment year 2001-2002.
Exclusion from SAS was timely communicated, hence there is question 'of being hit by section 59(4) of repealed Ordinance 1979
(3) That RCIT has not communicated that our case did not qualify for self-assessment. For this purpose Annexure "B", "C", and "D" of this application are referred to.
(4) That there was no objection regarding the assessee's tax liability being not higher by 10% as compared to tax assessed for assessment year 2001-2002 while communicating the intention to select the case for Audit. The selection of audit was to be made under the law out of the Returns which qualified for self-assessm ent and for which the Department had some other objections/doubts as to the veracity of the figures contained in those returns.
(5) That exclusion from SAS was not timely communicated and therefore, hit by limitation of time.
The first time the said exclusion was made and communicated vide Letter No, 520 dated 30-5- 2005 as mentioned in Para 2 of Assessment Order dated 20-6-2005 which for ready reference is reproduced as under:-- "..... The assessee was appraised of this fact vide Letter No, 520 dated 30-5-2005 that his case does not qualify under SAS as the declared tax liability was not higher by 10% as compared to the tax assessed for assessm ent year 2001-2002 vide order dated 31-5-2002.
(6) That section 59(4) of Income Tax Ordinance, 1979 is reproduced as under:- "No order under subsection (1) shall be made in any case after the thirtieth day of June of the financial year next following the income year in respect of which a return of total income has been furnished under section 55:-- ' Provided that if such order is not passed by such date, the acknowledgment issued under section 55A in respect of the return of total income shall be deemed to be the assessment order and notice of demand referred to in section 85."
(7) That from the contents of above para. 6 and para. 7, it is sufficiently established that exclusion from SAS was not timely communicated and the deemed order was already holding field after which the order passed under section 62 is illegal and void ab initio.
(8) That from the observation of the learned tribunal that "Exclusion from SAS was timely communicated" is erroneous and contrary to facts and documents/papers on record.
' Earlier case was selected for audit on the following basis:-- "The assessee has shown addition in assets amounting to Rs,1,196,380 on account of leased vehicles and claimed depreciation at Rs,19,940 on the same. The assessee has not proved any lease agreement in support of his claim as a result which the department seems to have excessively claimed at Rs,299,450. However the assessee has failed to provide the existence of tax deduction and mode of payments through banking channel wherever applicable. As such provision of sections 24(c), 24(ft) and 24(fff) are attracted. The assessee has also claimed that expense at Rs,112,500 per annum, however the assessee has not provided any details regarding deduction of tax under section 50(7b). As such this amount also attracts the provision of section 24(c) of the Income Tax Ordinance, 1979."'
Later on it was communicated vide latter dated 20-3-2003 by staff officer of RCIT that your case has not been selected. Selection of case and not selection of the case was on an entirely different premise. This question that case of assessee did not qualify for self-assessment because declared tax liability not higher by 10% was, not an issue at that time for selection of case; It is not matter of discrepancies, technical issue and deficiency of documents. Basic gist and fundamental theme of SAS is to deposit higher tax by 10% than the last assessed. If not deposited then it is not the case of SAS what to talk of picking out the case from SAS. Even deletion of sentence "Exclusion from SAS was timely communicated" does not change the fate of the case:
3. It is admitted fact that assessee has not paid higher tax by 10% than the last assessed. From the very inception, it was not the case of SAS. Hence miscellaneous application filed by the assessee hereby stands dismissed.
4. Order accordingly.