MRS. JUSTICE IRSHAD QAISER.--(1). Petitioner, Muhammad Aftab Sultan, seeks the constitutional jurisdiction of this Court under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 praying that:-- "On acceptance of the present writ petition, the notice/letters impugned may graciously be ordered to be set aside and all the proceedings carried out by respondents Nos. 3 to 5 which are one sided and ex parte, having no intimation to the petitioner be declared null and void and respondents be directed to proceed in the matter by providing/ reconfirming the opportunity of hearing and petitioner's legal, valid and authenticated source of income through foreign remittance/exchange from the concerned quarters and to proceed in the matter strictly in accordance with the law without any discrimination whatsoever and decide the petitioner's case according to the prevailing rates of taxes levied in the same vicinity. Any other order/relief/direction which this august Court may deem fit and proper in the circumstances."
2. The brief and essential facts which are mentioned in the present petition are that the petitioner is a Pakistani National, settled in U.S.A. since 1986, and he had made huge Foreign Currency remittances to Pakistan for purchase/construction of a property in Abbottabad. The Income Tax Department passed an ex parte order under section 122-C of the Income Tax Ordinance, 2001 and taxed the petitioner amounting to Rs, 1,28,16,000. That the petitioner came to know about the said taxation when his Bank Account at Abbottabad was attached for the recovery of said amount, which result the present petition, through appointment of his Manager Mr. Amjad Khan Jadoon.
3. The learned counsel for both the parties were heard at length. The counsel for the petitioner emphasized that none of the notices allegedly issued tinder Income Tax Ordinance, have been served on the petitioner as the petitioner was residing abroad and notices of the Tax Department have been addressed for VIP Apartments Abbottabad, which is occupied by different tenants and on the other hand the local residential address of the petitioner is "Habibullah Colony Abbottabad" which is known to the respondents and he has been condemned unheard which is violation of the principle of audi alteram partum . On the other hand the Department and its learned counsel has mentioned that all the statutory notices including under sections 114(4) and 111 were dispatched through UMS to Messrs VIP Apartments SIE, Abbottabad to which no compliance was made which resulted ex party order under section 122-C of the Income Tax Ordinance, 2001 and recovery proceedings were also initiated. The learned counsel for the petitioner diverted our attention that under appealing section 127 of the Income Tax Ordinance, 2001, Assessment Order passed under section 122-C is not appealable, therefore, the present writ petition be allowed.
4. Perusal of record submitted by the respondent shows that first notice under section 114 ibid was addressed to VIP Apartment i,e, the property which means the officer concerned is ignorant of the fact that income tax is on persons and not on property. Moreover there is a lot of tampering in the said notice. There is no evidence of proper service of the notices dated 27-2-2011, 25-7-2011, 27-7- 2011 and 13-10-2011. A combined order passed for Tax Years, 2008, 2009, 2010, 2011 and 23-2-2012 is sketchy and is a slip-shod manner. The Taxation Officer has not made any proper base for assessm ent as required under the provisions of the section 122-C, the Taxation Officer is required to base the order on available information or material evidence which is not available while passing order of an exorbitant tax demand. It was required to conduct a spot enquiry and to obtain blue- prints of the building and its completion certificate from the Building Control Authority and Statements of the tenants and rent deeds, which have not been obtained. As mentioned in the law, it is not a best judgment assessm ent, it is a bald order without any base. It is further mentioned that in accordance with "Protection of Economic Reforms Act, 1992", there is immunity to Foreign Currency Accounts maintained by all citizens of Pakistan residing abroad, from any type of enquiry by the Taxation Department and is exempt from tax and enquires. When the Taxation Department was of the knowledge that the petitioner is maintaining foreign Currency Account, then it was not required to attach it and thereafter, to initiate recovery proceedings from the said Foreign Currency Account as it is violation of the Economic Reforms Act, 1992, which is a State Guarantee. The Taxation Officers are required to refrain from such illegal activities and FBR is required to properly train and discipline such type of officers.
5. In the impugned assessm ent order, the Taxation Officer had assessed rent of the building and also separately assessed fair market value of Rs, 3,60,00,000 and taxed it at Rs, 90,00,000 without mentioning any section of law or any tax year. It is further astonishing that instead of assessing total income of the petitioner from all heads, the Taxation Officer has separately assessed and calculated tax from various heads, which is against the basic principle of Taxation. It is mentioned in clause (a) subsection (4) of section 111:-- "(4) Subsection (1) does not apply-- (a)to any amount of Foreign Exchange remitted from outside Pakistan through normal banking channels that is en-cashed into rupees by a scheduled bank and a certificate from such bank is produced to that effect"
6. It means that investment made to the extent of Foreign Currency remitted through banking channels, en cashed in Pak Rupees will not be probed/taxed. It is very evident from the aforementioned facts, record and evidence submitted that the petitioner has been deprived of the opportunity of being heard which is against the doctrine of "audi alteram partum". The department has not only violated the provisions of section 111(4)(a) of the Income Tax Ordinance, 2001 but has also proceeded in utter disregard to the provisions of the Protection of Economic Reforms Act, 1992.
Therefore, the W.P is admitted and allowed and the impugned bald, proforma Assessment Order which is totally without any base and material and against the provisions of the Income Tax Ordinance, 2001, is set aside and the matter is remanded back for de novo consideration with the directions to provide proper opportunity of being heard to the petitioner and to pass a proper and speaking Assessm ent Order after conducting proper enquires and to bring solid material evidence and information on record and also to give consideration to the Economic Reforms Act, 1992 and section 111(4)(a) of the Income Tax Ordinance, 2001. The taxation officer is also required to look into taxability of petitioner under avoidance of double taxation treaty between Pakistan and USA and under section 107 of Income Tax Ordinance, 2001.