CH. MUHAMMAD ASGHAR PASWAL (JUDICIAL MEMBER).---The titled appeal has been filed by the Revenue against order dated 29-9-2010 passed by the learned CIR(A), Gujranwala relating to the tax year 2009 to agitate the cancellation of assessment.
3. Brief facts giving rise to the present appeal are that the taxpayer had purchased a shop measuring 249/272 at Noorbawa, Gujranwala for a consideration of Rs.650,000. The DCIR issued notice under section 122 along with notice under section 122(9) read with section 122(5)(ii) and notice under section 111(1)(b) which remained uncompiled with. The DCIR made the addition under section 111(1)(b) of the Income Tax Ordinance, 2001 at Rs.650,000 and assessment was framed at net income of Rs.768,690 for the tax year 2009. The assessee being aggrieved went in appeal before the learned first appellate authority who annulled the assessm ent.
4. The learned DR contended that the learned CIR(A) was not justified in treating the proper service of statutory notices under section 218 as improper. The learned DR further submitted that the CIR(A) was not justified to annul the order passed under section 122(1) merely on technical grounds as held in judgment of Lahore High Court Lahore cited as 2002 PTD 541. The AR, on the other hand, submitted that notices issued were not properly served and opportunity of being he heard was not provided to, explain the source o investment. The AR further submitted that taxpayer had valid source to explain the investment.
5. I have heard both the sides and perused the available record. I find force in the contentions raised by the learned AR. The learned CIR(A) has given a categorical finding that the notices issued were not properly served and the assessment has been made without providing reasonable opportunity of being heard to the taxpayer. The DCIR failed to serve statutory notices in accordance with law. In these circumstances the learned CIR(A) was perfectly justified to cancel the assessm ent made under section 122(1) of the Income Tax Ordinance. The appeal filed by the Revenue is dismissed being devoid of any merit. .