ORDER as Titled cross appeals have been instituted at the instance of the taxpayer as well as department against the appellate order dated 15-6-2010 recorded by Commissioner Inland Revenue (Appeals)
Lahore.
2. Facts in brief for disposal of instant appeals are that the taxpayer , a film actress, filed annual return for the year under consideration disclosing net income of Rs.149,500, which was taken to be assessm ent order under section 120(1) of the Income Tax Ordinance, 2001 (hereinafter called "the Ordinance"). The department on the basis of an information received regarding purchase of a Suzuki Car for Rs.483,000 on 19-7-2002 and a house at Defence Housing Authority (DHA) Lahore for a consideration of Rs.2,029,950 on 7-8-2002 initiated proceedings through issuance of notice under section 122(9) and finding no reply from the appellant/taxpayer amended the assessment by adding the said assets in the income already assessed. Taxpayer agitated the said treatment before CIR(Appeals) Lahore on a number of grounds who remanded the case back to the taxation officer for de novo proceedings after affording fresh opportunity of being heard to the taxpayer. Still discontented the appellant has come up in further appeal before this Tribunal inter alia on the following grounds:--
(i) That the Commissioner Inland Revenue Appeals-II, RTO, Lahore is remand back the case of the appellant without jurisdiction, illegal and bye owned the jurisdiction.
(ii) That on notice under section 122(9) read with section 122(5) has been received by the taxpayer dated 26-6-2009 for compliance on 28-6-2009 and even subsequent order under section 122 of the Income Tax Ordinance, 2001 and the assessment finalized on 30-6-2008 on the day I which the case was not fixed for hearing. Hence the assessment is liable to be annulled. Reliance has been placed on judgment cited as 2008 PTD (Trib.) 1641.
(i.e) That the proper opportunity of being heard has not been allowed to the taxpayer and assessm ent finalized on the basis of improper service, which is not sustainable in the eyes of law.
Reliance has been placed on judgment (1994 SCM R 2232).
(iv) That the taxpayer has shown the value of Advance for Car in wealth statement as on 30-6- 2003 at Rs.182,000 as advance in the wealth statement as on 30-6-2003 because the taxpayer purchased the car on installments and the rest payment amounting to Rs.304,000 paid on 30-12- 2004.
(v) That the addition made on account of purchase of House 163-V, DHA, Lahore Cantt at Rs.2,050,000 is illegal because the house - is not in the name of Taxpayer Miss Janna Malik, The said house was purchased by her mother Mst. Swetie Nasim.
(vi) That amended assessm ent order for the Tax Year 2007 finalized by the Assessing Officer is illegal, void and without jurisdiction and liable to be declared as annulled.
3. The department has also come up in appeal by raising the following grounds:--
(1) That the learned Commissioner Inland Revenue (Appeals-II) Regional Tax Office, Lahore was not justified to set aside the order passed under section 122(1) of the Income Tax Ordinance, 2001 in the circumstances when section 129 of. The Income Tax Ordinance, 2001 does not permit to do so.
(2) That the learned Commissioner Inland Revenue (Appeals-II) Regional Tax Office, Lahore while setting aside the case has exercised his powers beyond jurisdiction, therefore, the orders is not sustainable.
4. Mr. Muhammad Waseem Ahmad Ch. Advocate appearing on behalf of the appellant contends that the impugned order is not maintainable as the learned CIR(Appeals) instead of annulling the order -of taxation officer has remanded the matter back to him. Elaborating his view point he maintained that the notice under section 122(9) of the Ordinance was issued on 26-6-2009 for 28- 6-2009, which is not a sufficient and reasonable time for compliance and even the order was passed on a date not fixed for compliance i.e. 30-6-2009. As per learned counsel, the amended order merits annulment not only for the reason that sufficient opportunity of being heard was not provided but also for that the same was passed on the date not fixed for hearing. In support of his arguments, he has placed reliance on a reported judgments of Honourable Supreme Court reported as 1994 SCM R 2232 and 2008 PTD (Trib.) 1641. Learned AR further contends that the Suzuki Car was obtained by the taxpayer on lease from .Askari Leasing Company in the tax year 2003 and the amounts paid upto 30-6-2003 were declared in the wealth statement as on 30-6-2003 and to substantiate his claim he produced the said wealth statement, lease documents and registration of car. Learned counsel further contends that the house at DHA Lahore has illegally .Been added' in the taxpayer's income as the same does not belong to the taxpayer. In support of his claim, he produced a copy of the transfer of allotment letter in respect of 10 Marlas Plot No.000163 Block V Phase 2 DHA Lahore dated 13-8-2002 issued by the Secretary of DHA bearing Serial No.0052645 in the name of Mst. Sweety Naseem. While concluding his arguments, he prays for annulment of the order.
5. Learned DR has fully supported the action of taxation officer by maintaining that as per section 129 of the Ordinance CIR(Appeals) is not empowered to set-aside the order impugned before him.
By doing so, he has travelled beyond his jurisdiction, hence, impugned order is not sustainable.
6. Arguments heard and record perused. In our opinion, the arguments of the learned counsel carries considerable force. Issuance of notice under section 122(9) on 26-6-2009 for 28-6-2009 providing only two days for compliance cannot be considered as sufficient and reasonable time for compliance and the finalization of assessment on the date other than the one fixed for compliance is also not tenable. Moreover, no definite information was available with the department while initiating proceedings as is evident from the wealth statement and lease documents as well as ownership documents of the House submitted at the time of hearing. Car was obtained on lease from Askari Leasing Company and the lease amount paid upto 3-6-2003 to the leasing company was accordingly declared in wealth statement for the tax year 2003. Addition of Rs.483,000, which is the total amount of the car, shows that the taxation officer was in possession of incomplete information . Moreover, the property which is not even owned by the appellant as is evident from the record of DHA was added without making an effort to verify the ownership as well as the exact invested amount clearly establish that no definite information was available with the department as envisaged in section 122 of the Ordinance. The above infirmities clearly establish that the proceedings for amendment of assessment are altogether illegal and not warranted. The orders of C the authorities below are annulled by deleting the addition under section 111(1)(b).
7. As far as Revenue appeal is concerned, since we have annulled the order of the 2 forum below, departmental appeal is accordingly dismissed.
8. The upshot of the above is that taxpayer's appeal is accepted whereas departmental appeal is rejected. .