1. ' JAWAID MASSOD TAHIR BHATTI CHAIRPERSON ---The department through this appeal has objected against the impugned order of the learned CIR(A) dated 20-9-2013 on the following grounds:-- "(ii) The CIR(A) fell in error in appreciating the factual and legal position of the case.
(iii) The appellant/taxpayer is Chief Executive besides this he is doing private practice in Messrs Zohra Hospital, Rawalpindi and being the representative of Messrs Hiltan Pharma in twin cities with regard to matter pertaining to Ministry of Health. He holds the most important post which carries multifarious responsibilities in administering the financial and administrative matters relating to accounts, auditing, human resource management, discipline, framing of educational syllabus, link with various Universities of Pakistan functions, seminars and academic support with foreign universities to name a few and etc. In such a scenario, how come a senior most administrative head could be called a full time researchers. Therefore in these circumstances, the CIR(A) was totally unjustified to treat the taxpayer/Chief Executive as the full time researcher.
(iv) The learned CIR(A) fell in error by quoting a few cases of various court to draw analogy by stretching law with he objective to provide relief to the taxpayer. In this respect, an extract from the judgment of the Supreme Court cites as PLD 1997 SC 582, is given below:-- "For years a battle of maneuver has been waged between the legislature and those who are minded to throw the burden of taxation off their own shoulders on to those of their fellow subject. It scarcely lies in the mouth of the taxpayer who plays with fire to complain of burnt fingers"
(v) In presence of express provisions of section 1(2) of Income Tax Ordinance, 2001, the law does not extend to AJ&K territory. Therefore, the taxpayer/appellant has to be treated under the provisions of law. Non-mention of relevant section is not a bar against levy of tax in terms of section 126 if the substance and effect is in conformity with the law.
(vi) Exercise of power is subject to three necessary elements. Firstly, the court can exercise it jurisdiction in a manner which is not prohibited by any law, secondly, where these is express provision in the code, the court cannot exercise its authority to defeat or circumvent such express provision PLD 1998 Lah.
474. In the light of above judgment, the order of the learned CIR(A) is against the spirit of express provisions of law as enunciated under section 1(2) of the Ordinance 2001.
(vii) The ADCIR has amended the assessment order under section 122(5A) of the subordinate authority because the same was not only erroneous in point of law but also it caused prejudice to the interests of revenue.
2. (viii)The ADCIR while resorting to section 122(5A) has applied/based his action on the touch stone of whether income in respect of which tax is to be realized bas been subjected to tax.
3. ' I have heard the learned representatives from both the sides and have also perused the impugned order and the amended order passed by the Taxation Officer under section 122(5A) of the Income Tax Ordinance, 2001. The taxpayer in this case is an individual deriving income from salary as well as from private practice. The return declaring net income at Rs,31,74,516 was taken to be an assessment in terms of section 120(1) of the Ordinance Subsequently, Additional Commissioner reopened the matter under section 122(5A) with the reason that the taxpayer has claimed tax rebate @ 75% as full time teacher/researcher as he has also deriving income from private medical practice from Zohra Nursing Home, Rawalpindi and is not entitled rebate of full time teacher/ researcher. He has therefore amended the order being erroneous and so far prejudicial to the interest of revenue after issuing notices to the taxpayer. Against that amended order the taxpayer filed first appeal before the learned CIR(A) who has not approved the amended order therefore the department is in appeal before this Tribunal.
4. ' I have considered the submissions made by both the sides and I am of the view that the learned CIR(A) has rightly held that the taxpayer in this case is entitled to rebate @ 75%. The taxpayer in this case is teaching in the University situated in Azad Jammu and Kashmir (AJK) wherein Income Tax Ordinance, 2001 does not apply as it is clearly mentioned in subsection (2) of section 1 of the Ordinance, 2001 that this Ordinance extends to the whole of Pakistan and as the territory of AJK is a distinct and separate tax jurisdiction therefore the Ordinance is not applicable and the tax affairs of the state of AJK are governed through AJK Council Board of Revenue. Even otherwise the taxpayer was never confronted by way of issuance of show-cause notice. On behalf of the taxpayer it has been contended that his residential status is that of a "resident person", therefore, the income of the resident person under section 11(5) of the Ordinance, 2001 to be taken for taxation shall be Pakistan source income/foreign source income. In this case the Pakistan source income is from private practice and foreign source income from salary earned in AJK and the question of tax credit of foreign source salary income shall dealt under section 102 of the Ordinance, 2001 which is very clear even if a single rupee tax has been paid to authorities of foreign land as a tax from salary then no question of further taxability from salary ahs to be asked and it shall be taken that the resident person has discharged the duty of tax from foreign source salary income. The taxpayer in this case in response to letter of the Taxation Officer has furnished the appointment letter as Chief Executive of Mohy-ud-Din Islamic Medical College Mirpur AJK issued by Mohy-ud- Din Islamic University Nerian Sherif AJK wherein it has been specifically mentioned that the taxpayer is the Chief Executive of Mohy-ud-Din Islamic University AJK and also works as Professor of Medicine in that University. The working of the University is from Monday to Friday and that the taxpayer is well renowned medical specialist retired from Pakistan Army as Maj General and well known specialist in twin cities. These all facts were furnished by the taxpayer but the Taxation Officer without issuing any show-cause notice has rejected the version of the taxpayer with the observation that taxpayer is not a full time teacher/researcher as he is doing private practice and working as Chief Executive and Dean. It is further observed that he is not entitled for rebate due to the reason that University is situated in AJK but he has not considered the relevant section 102 in this respect. I have further noted that no such charge as adjudged in impugned adjudication order under section 122(5A) was primarily levelled in show-cause notice which renders the amended order null and void in the eyes of law. It is a trite law that a charge not framed in show-cause notice cannot be adjudged thorugh an adjudication order. In this regard the decision of the honourable Supreme court of Pakistan in case of Collector Central Excise and Land Customs v.
5. Rahim Din reported as 1987 SCMR 1844 has been referred wherein it has been held that "the order of adjudication being ultimately passed on a ground which was not mentioned in the show-cause notice was palpably illegal and void on the face of it". In this regard the decision of the Tribunal reported as GST 2002 CL 210 on the same cause of action has also been referred. The above referred decision of the honourable Supreme Court of Pakistan has also been followed by the honourable High Court of Sindh, Karachi in a case reported as 2004 PTD 1449. Consideration all these facts, circumstances and the legal position, I find no warrant to interfere in the impugned order which is hereby upheld.
6. ' The appeal filed by the department is dismissed.