The above titled appeals have been filed by the taxpayer for the assessment years 2000-2001 and 2001-2002 against the impugned orders by the learned CIR (Appeal-II) Lahore dated 29-06-2012.
2. The brief facts are that the appellant a Private Limited Company, derives income from the business of running a computer college. Income Tax returns were filed under section 59(1) of the Income Tax Ordinance, 1979 to declare following income/Loss by claiming exemption under clause (86B) of part 1 of the second schedule of the Income Tax Ordinance, 1979 for both the years detailed as under:-- Assessm ent Year 20001-2001 2001- 2002 Receipts declared Rs.20,74,113 Rs. Nil P & L Exps ClaimedRs.35,80,065 - Income/Loss declared(Rs.14,59,830)-
3. The assessee claimed exemption under clause (86B) of Part I of the 2nd Schedule of the Income Tax Ordinance, 1979 in the status of a private limited company which was allowed by the operation of law for both the assessm ent years 2000-2001 and 2001-2002. The Additional Commissioner of Income Tax considered that the assessment framed under section 59(1) on account of claiming exemption by the assessee erroneous and prejudicial to the interest of revenue under section 66A of the Income Tax Ordinance, 1979 for both the years. The action under section 66A was taken in the case of Messrs Nicon Center of Computer Science Model Town, Lahore, as an AOP as the exemption was given erroneously by the assessing Officer.
4. The Taxation Officer passed the impugned order and reassessed the income of the appellant.
The appellant filed appeals against the orders of the taxation officer passed under section 63 of the repealed Ordinance before the Commissioner (Appeals) who set aside the order for afresh adjudication. The appellant has come before this Tribunal on the main ground that the both authorities below misdirected themselves, because the learned Inspecting Additional Commissioner of Income Tax had passed order under section 66-A of the repealed Ordinance in the case of AOP and not in the case of the appellant Company. Since the base of order of the taxation officer is non-existed in the case of the appellant company, hence it was liable to be cancelled instead of set aside in the both assessment years 2000-2001 and 2001-2002. On factual matrix further, it was that the appellant had foreign remittance received during the assessment year 2000-2001 and the assessing officer was not justified to tax it along with addition in the profit and loss account. The evidence was produced before the assessing officer as well the CIR (Appeals). The CIR(Appeals) has categorically observed by accepting all relevant material in favour of the assessee at the last page of his orders that foreign remittances of Rs,4,715,388 were received during the assessm ent year 2000-2001. The AR pleads that the CIR(Appeals) should have declare the orders under section 63 as illegal and void ab initio instead of setting aside the same.
Another fact in the case of assessment year 2001-2002 was advanced that the assessee had closed his business and that the estimation of receipts in that year was uncalled for. Learned AR also advanced another argument that the taxation officer passed the order on 30-6-2004, the day it was neither adjourned nor fixed for hearing which is not justified. Reliance has been placed on the reported judgment cited as PLD 1975 Lah. 1317.
5. The AR further contended the CIR(Appeals) lacked the jurisdiction to remand back the case for new assessm ent order. He also relied upon the judgment cited as 2012 PTD 1032 (Trib.).
6. Learned DR strongly supported the order of Taxation Officer and Commissioner Inland Revenue (Appeals-II), Lahore. It has been stated that the department was in possession of sufficient material to estimate the receipts. Learned DR further stated that declared receipts were grossly understated.
7. We have considered the rival arguments and have also given due consideration to the orders passed under section 63 of the Income Tax Ordinance, 1979 as well as orders of the learned Commissioner Inland Revenue (Appeals-II). The order under section 66A of the repealed Ordinance supports the contention of the appellant company that no order under section 66A was passed in its case. The taxation officer has misdirected himself in starting and finalization of proceedings under section 63 in the case of the appellant company. Therefore, the very basis of the order under section 63 is non-existed and liable to be cancelled in both the assessment years 2000-2001 and 2001-2002 and ordered accordingly. So there is no need to adjudicate other grounds of appeal.