CH. SHAHID IQBAL DHILLON, (JUDICIAL MEMBER).---Through the instant income tax appeal, appellate order dated 08.05.2015 recorded by CIR (Appeals-III) Lahore has been assailed by the registered person.
2. Facts in brief leading to instant appeal are that the appellant is an individual and maintaining his business as distributor of a beverages company i,e, Coca Cola. The appellant/registered person was selected for audit for tax year 2012 in terms of 214 C of Income Tax Ordinance, 2001, by the Federal Board of Revenue. Subsequently, the ACIR after obtaining the record through statutory procedure, issued a show-cause notice to the appellant wherein the appellant was confronted the following discrepancies which later on were added to the appellant's income through the amended income order/impugned order under sections 122(1) and 122(5) of the Income Tax Ordinance, 2001.
Declared Income in terms of order under section 120 of Income Tax OrdinanceRs. 613,800/- Addition made on account of purchase in terms of section 111(1)(b) of The OrdinanceRs, 4,314,468/- Addition made on account of concealed assets in terms of Section 111(1)
(b) of The OrdinanceRs, 5,760,000/- Addition made on account of value of the vehicle in terms of section 111(1)(b) of The OrdinanceRs, 130,000/- Addition made on account of creditors in terms of section 111(1)(a) of The OrdinanceRs, 1,896,584/- Addition made on account of business capital in terms of section 111(1)
(a) of The OrdinanceRs, 1,258,699/- Addition made on account of bank balance in terms of section 111(1)(a) of The OrdinanceRs, 37,205/- Addition made on income from other sources in terms of section 39(3) of The OrdinanceRs, 5,600,000/- Addition made under the head travelling and miscellaneous A/C expenses in terms of section 174(2) of The OrdinanceRs, 331,612/- Addition made under the head salary and wages account expense in terms of section 176(2) of The OrdinanceRs, 6,447,169/- Addition made under the head fuel lubricants A/C expense in terms of section 21(0 of The OrdinanceRs, 2,432,893/- Addition made under the professional charges A/C expense in terms of section 21(C) of The OrdinanceRs, 168,754/- Addition made under the head salary A/C expense in terms of section 21(m) of The OrdinanceRs, 326,070/- Addition made under the head depreciation A/C expense in terms of section 22(2) of The OrdinanceRs, 128,650/- Total Additions made Rs, 28,832,830/-
3. Learned counsel appearing on behalf of the appellant has opted to assail the impugned 0-N-0 on the legal plain first by arguing that the procedure laid down in section 177 of the Income Tax Ordinance, 2001 for conducting the audit has not been followed even from initiation of proceedings as the appellant was not communicated for the reasons before requisition of record for the purpose of audit which was mandatory provision of clause (b) of subsection (1) of section 177 of Income Tax Ordinance. The learned counsel also referred the judgment passed by Lahore High Court cited as 2012 PTD 1815 Chenone Stores Ltd. v. The Federation of Pakistan on the selection of audit as well as the procedure to be followed from requisition of record to conclude the proceedings. Learned counsel for the appellant further argued that the order was passed under sections 122(1), 122(5) of the Ordinance without confronting the tax payer the contents of audit report/charge sheet before amending the assessment under section 122(1) read with subsections (4)(5) and Cls. (i), (ii) & (iii) of section 122(5) of the Ordinance, 2001 or even before issuance of notice under section 122(9) of the Income Tax Ordinance, 2001. Assessment has been framed in total ignorance of law and in violation of the prescribed procedure and legal requirement. The learned counsel for the appellant contends that the ACIR in total oblivion of the procedure had been made for the amended assessment under the provisions of section 122(1) of the Ordinance in continuation to the proceeding of audit without proper jurisdiction as prescribed in sections 177(6), 122(1)(5) of the Ordinance. Further argued that the order had been amended under section 122 of the Ordinance should be point of favour of selecting a case for audit instead of being treated as an obstacle in the path of selection of case for audit because on the basis of amendment of an order it could be safely assumed that the return which had been converted into assessment order could not be relied upon.
4. On the other hand the departmental representative/respondent vehemently opposed the contentions made by the learned counsel for the Appellant.
5. Learned counsel while arguing the case assailed the income additions confronted to the Appellant under section 111(1)(b) and section 111(1)(a) for concealed assets in terms of purchases and creditors vide Show-Cause Notice dated 21.06.2014, on the plea that no definite information was on record to amend the income of appellant as envisaged in section 122(5) of the Ordinance which is reproduced as under:-- Section (5)
"(5) An assessm ent order in respect of lax year or an assessment year, shall only be amended under subsection (1) and an amended assessment for that tax year will only be further amended under subsection (4) where on the basis of definite information acquired from an audit or otherwise, the commissioner is satisfied that--
(i) Any income chargeable to tax has escaped assessment; or
(ii) Total income has been under-assessed, or assessed at too a rate; or has been a subject of excessive relief or refund; or
(iii) Any amount under a head of income has been misclassified. (Emphasis supplied)
6. The learned counsel for the tax payer/appellant emphasized on plain reading of section 122(5) for passing order under sections 122(1) and 122(5). The availability of "definite information" is the precondition and submitted that sections 122(5) provides that an assessment order will only be amended under section 122(1) and 122(5) read with section 177, where "definite information" has been acquired through audit or otherwise. In the instant case neither any such definite information was acquired by the ACIR nor it was confronted to the appellant as the information so confronted was acquired by the deductions, disallowances and unknown sources which was not even confirmed through a process as laid down in Section 122(8) of the Ordinance to constitute definite information, similarly a case law on the subject was placed before this Tribunal reported as 2007 PTD 2601. Wherein it has been held that any information that creates doubt or provides reasons to suspect that income has been concealed does not form part of term "definite Information".
According to the ATIR tangible information and such proof that leads to reason to believe could only be considered as "definite information". It has further been held in the same decision that any estimate, gossip, personal whims or surmises could not be termed as "definite information".
Learned counsel further contended that after filing return by the tax payer the deemed assessment under section 120 of the Ordinance was deemed to be passed and until and unless the deemed assessm ent is cancelled there cannot be another assessment thereof. He argued that deemed assessm ent has attained finality having the protection of law. He went to say that the audit proceedings are a process to reach a conclusion from where the jurisdiction under sections 122(1) and 122(5) and then an assessm ent within the said provision be altered or modified. All the assessm ents have to be under section 122 and before embarking upon the proceedings, the requirements of section 122(5) are to be fulfilled in letter and spirit. The selection of the audit in itself does not need an assessm ent or modification.
7. The Learned AR of the Tax payer submitted that the learned tribunal in the case reported as 2011 PTD (Trib) 321 has also emphasized of the fulfillment of three conciliates refereed in section 122(5) of the Ordinance in addition to "definite information" and held that:-- "The assessing officer has amended the deemed assessment on the basis of the material already available on record and no fresh information/documents have come into possession of department. We are therefore of the view that there was no justification to amend the already completed assessm ent under section 122 of the Ordinance reliance in this respect of this tribunal's judgment reported as 2003 PTD 1093. The provision of subsection (5) of section 122 of the Ordinance stipulate three conditions for issuance of said notice i,e, (i) any income chargeable to tax has escaped assessm ent or (ii) total income has been under assessed or assessed at too low a rate, or has been subject to excessive relief or refund, or (iii) any amount under a head of income has been misclassified. We have further noted that in this case the notice sent by the tax officer under section 122 of the Ordinance dated 21.06.2014 as it does not fulfill the requisite preconditions as mentioned above which render the entire proceedings as illegal and void ab initio. The reliance in this regard has been placed on the decision of Honourable High Court reported as 1997 PTD 47."
8. Similarly, it has been maintained that honorable Islamabad High Court in judgment reported as 2010 PTD 1506 in Writ Petitions Nos.517-518 of 2009 (Pakistan Mobiles Communications Limited v.
Commissioner of Income Tax Audit Division and 5 others) and Writ Petition No, 653 of 2009 Messers SME Bank Limited v. Additional Commissioner of Income Tax Audit and others, while giving its finding on "definite information" and the applicability of the provisions of 122(1) and (4) and (5) of the Ordinance has been pleased to hold as under:-- "Comparing the powers possessed by the commissioner under subsections (5A) and (5B) with the powers conferred on the commission under subsections (1) and (4) of Section 122, I have come to the conclusion that powers under subsection (5A) or (5B) are exercisable on the basis of data already available in shape of return and other documents annexed with the return, the jurisdiction can be exercised by the commissioner if commissioner, on the basis of available data considers that the assessm ent order is erroneous and is prejudicial to the interest of the revenue. The assessm ent order means order treated as issued ore order passed under Section 122. However, if the Commissioner acquires an addition information from audit or any other source (additional mean additional to data already available) and the information is definite he can exercise powers under subsection (1) to amend assessment order treated as issued under Section 120 Order passed under Section 120. Since the power under subsection (5A) if exercisable in the basis of the material already available, if the order passed is appealed against and the appellate order comes into field and doctrine of merger would be applicable. Appellate order cannot be amended. However, powers under subsections (1) and (4) are altogether different. Even in the presence of appellate order, if Commissioner acquires definite information through audit or otherwise he can proceed under the law to amend or further amend the assessment order. The reason is that the appellate order has been passed in the absence of information subsequently acquired by the Commissioner."
9. The learned counsel submitted that in other words, the Honorable superior court has been pleased to prescribed following criteria for in invoking the provisions of subsections (1) and (4) to fulfil the requirements of subsection (5) of section of 122--
(i) The definite information must have been received from a source.
(ii) The definite information must be in addition to the data that is already available on record.
10. The learned A.R. Of the taxpayer/appellant vociferously submitted that a plain reading of the above judgments of the honorable Supreme Court, the High Court and the ATIR together with the facts and circumstances of the case make it clear that in the instant case the add backs and disallowances have been misconstrue by the learned ACIR as definite information as the same is neither received from any source not is in addition to the data that was already available on record. Besides, additions have been made by the assessing officers on estimate, assumptions, surmises and conjectures which could not be termed as definite information by any stretch of imagination. He contended that honorable Supreme Court, on the contrary, by using the word "must" in its above cited judgments has made it mandatory that such information must be received from a source. The ACIR admittedly did not receive any information nor has any source of information other than the record of tax payer. Similarly, as envisaged by the honorable Islamabad High Court, there is no additional information acquired from audit or through any other source to fulfill the requirements of subsection (5) read with subsections (1) and (4) of section 122 of the Ordinance. It has been unambiguously stated by the Honorable Islamabad High Court that the additional information means information in addition to the data that is already available on record and it should be definite too. He urged that the additions made on account of purchases, and creditors made in the instant case do not constitute such additional information i,e, the information was part of data already available in shape of income tax return and other documents available with the return and cannot be termed as (definite) additional information as envisaged by Islamabad High Court.
11. In this respect the learned counsel for the appellant framed another question regarding the maintainability of the show-cause notice that the show-cause notice in the instant case in itself is not maintainable in the eye of law as it does not meet the requirements of section 122 of the Ordinance, he also referred the judgment passed by honorable Supreme Court reported as 2001 SCMR 838 wherein it was held that the show-cause notice not being in consonance with the law laid down by the apex courts is completely unlawful, illegal and without jurisdiction. The learned advocate for the tax payer further pointed out that the Show-Case Notice without being in consonance with Section 122(1) and (5) read Section 122(8) is not maintainable in light of above judgment passed by Honorable Supreme Court, in addition to above referred judgment learned counsel for appellant also referred the judgments passed by Supreme Court as well as High Court reported as 1993 PTD 756, (1993) 86 Tax 1 and 1993 PTD 804. Even though the show-cause notice should have been properly served to the appellant by confronting all additions to be made separately so that the appellant could come up with a proper reply, thus the principle of fair trial, natural justice an opportunity of being heard has also been denied in due process of law and gross violation of Articles 4 and 10A of the Constitution.
12. The learned counsel for the tax payer while arguing the additions made in terms of section 39(3) of the Ordinance for income from other sources, addition in terms of section 174(2) for profit and loss expenses, additions in terms of Section 21(i), (c), and (m) for profit and loss expenses claimed by the tax payer, contended that the additions so made vide a order-in-original, dated 01.08.2014 are not maintainable in the eye of law as the same have been made after obtaining the figures from the record submitted by the appellant whereas on the other hand no valid reason has been stated in the order-in-original as to why the above sad additions have been made therefore, the order-in-original in terms of the said additions does not meet the requirement of section 24A of the General Clauses Act, 1897 hence the same is not maintainable in the eye of law. Furthermore, the above said additions under section 21(i), (c) and (m) of the Ordinance are also liable to be set- aside while keeping in view the principle of "definite information" laid down in section 122(5) of the Ordinance.
13. When the situation narrated supra and the arguments delivered by the learned counsel for the tax payer/appellant were put before the departmental representative, same were vehemently opposed by the departmental representative. But neither any concrete argument were delivered by the departmental representative to rebut the version of the Learned Counsel for the appellant nor any reference has been made in this behalf.
14. We have heard the arguments advanced by the representatives of all the parties and also have gone through all the relevant record. We are of the considered opinion that Section 177 of the Ordinance does not in itself provide any power to modify assessment or re-determine the income of tax payer. In this regard the kept point which is to be kept in mind is that it is not a return of income which is being processed by the ECIR/CIR, doing audit. Actually he is dealing with a deemed assessm ent which by process of law acquired a sanctity. The finalized assessment, therefore, cannot just be modified or disturbed in continuation of the proceedings of audit under Section 177. Therefore, selection of audit even conducting of audit does not mean or include an assessm ent or amended assessm ent/ alteration or modification of assessment.
15. Adverting to other aspects of the impugned order as well as the order-in-original passed by the Respondents that no "definite information" was found to have been available within the meaning of section 122(5) read with section 122(8) of the Ordinance. The Honorable Lahore High Court in its recent decision 2013 PTD 884 on the subject of "definite information" with reference to Section 122(5) of the Ordinance has held as under:-- " the term "definite information" in section 122(5) of the Ordinance is not just any information but definite enough to satisfy the concerned officer that income chargeable to tax of an Assessee has escaped assessm ent or total income of the Assessee has been under assessed etc. Definite means indisputable, known for certain, explicitly precise clearly defined, living nothing to implication, established beyond doubt and cut and dried but in the instant case the additions made in terms of different section of Income Tax Ordinance, 2001 are without the "definite information" and based on just information available which has not been verified through a complete legal process. Moreover, the order in original does not meet the requirement of section 24A of General Clauses Act, 1897 as no reasons have been confronted to the tax payer before making additions to the income of the tax payer for the tax year 2012."
16. Therefore, in the light of above discussion the appeal of the tax payer is allowed and the order- in-appeal dated 08.05.2015 as well as the order-in-original dated 01.08.2015 the amendment order under section 122(1) (5) of Income Tax Ordinance, 2001 are hereby annulled.
Sd/- (CH. SHAHID IQBAL DHILLION)
JUDICIAL MEMBER Sd/- (MUHAMMAD RAZA BAQIR)
ACCOUNTANT MEMBER
17. MUHAMMAD RAZA BAQIR, (ACCOUNTANT MEMBER).--I have .Gone through the proposed order written by my learned brother, Judicial Member, and I respectfully disagree with his observations/ findings.
18. Learned JM, has proposed to vacate the impugned order for the reason that the assessing authority has no "definite information" in his possession within the meaning of section 122(5) read with section 122(8) of the Income Tax Ordinance, 2001. After careful perusal of available record and arguments put-forth by the learned representative of both sides, I am of the firm opinion that assessing officer does posses sufficient "definite information" gathered from the audit proceedings conducted under section 177. In my opinion, following discrepancies detected which resulted into consequential additions in the income of the taxpayer are sufficient to make amendment of assessm ent under section 122(5) of the Ordinance:-- i. The taxpayer declared purchases from M/s Coca Cola amounting to Rs,200,576,918/- whereas on direct information gathered by the assessing authority from M/s Coca Cola, it was reported that total purchases made were Rs,196,262,270/-, hence, there is a difference of Rs,4,314,648/- which is liable to action under section 111(1)(b). ii. In the wealth statement filed by the taxpayer, total assets were shown at Rs,3,142,400/- in the following manner:-- Capital Usman Traders 200,000 Property from parents 500,000 Vehicle 2,442,400 Total assets 3,142,400 On the other hand, schedule of fixed assets appended with the books of accounts shows following assets upon which depreciation was claimed: - Building Usman Traders 4,160,000 Construction on above building 1,200,000 Computer and Furniture 400,000 Total assets 5,760,000 The taxpayer had failed to mention above assets in the wealth statement despite he had claimed deprecation upon these assets meaning that the taxpayer had concealed assets to the extent of Rs,5,760,000/- which is liable to action under section 111(1)(b). iii. In the wealth statement, the taxpayer declared value of vehicle at Rs,2,442,400/- whereas in the books of accounts, the same was declared at Rs,2,573,000/-. The difference of Rs,130,600/- warrants action under section 111(1)(b). iv. Certain expenses claimed were not properly vouched and also due tax wherever required was not deducted/paid, therefore, warrant action under the law.
19. Above discrepancies fall in the definition of "definite information" and the assessing authority duly confronted the same to the taxpayer but he had failed to dislodge the same at assessment stage. Therefore, I am of the opinion that the assessing authority has rightly invoked the provisions of section 122(5) and suitably amended the deemed assessment. Before the CIR(A) and even before us the taxpayer had failed to make out a case with any plausible explanation or any corroborative documentary evidences that the assessing authority has not acted in accordance with law. Reliance placed by the learned J.M. On the case law reported as 2013 PTD 883 (HC Lah) is misconceived as facts and circumstances involved in the present case are totally different when compared with.
20. In view of the above, I am of the view that that the learned J. M. Has overlooked the above important aspects of the case and cancelled the impugned order merely on technicalities without going into merit of the case. Therefore, I am of the firm opinion that impugned order of the learned CIRCA) is liable to be maintained.
Sd/- (MOHAMMAD RAZA BAQIR)
ACCOUNTANT MEMBER
21. Since, a difference of opinion has arisen between the Members of this Bench, we, accordingly, refer the matter to the Hon'ble Chairperson for nomination of third Member to resolve the following proposed questions of law on the subject:-- i). Whether in the facts and circumstances of the case, the discrepancies detected by the assessing authority are liable to action under section 122(5) of the Income Tax Ordinance, 2001? ii). Whether the tax demand can be waived merely on technicalities, especially when sufficient evidences are available on record which the appellant has failed to rebut?
Sd/- (MOHAMMAD RAZA BAQIR)
ACCOUNTANT MEMBER Sd/-- (CH. SHAHID IQBAL DHILLON) JUDICIAL MEMBER CH. ANWAAR-UL-HAQ, JUDICIAL/REFEREE MEMBER.
Saeed Ashraf for Applicant.
Ms. Bushra Jafar, D.R. For Respondent.
Date of hearing: 14th July, 2016.
Date of order:14th July, 2016.
22. CH. ANWAAR-UL-HAQ, (JUDICIAL MEMBER).---The matter has been entrusted to the undersigned by the Hon'ble Chairman for resolving the difference of opinion which has been arisen between the learned Members while deciding the above titled case.
23. The following issues have been referred for adjudication:-- i). Whether in the facts and circumstances of the case, the discrepancies detected by the assessing authority are liable to action under section 122(5) of the Income Tax Ordinance, 2001? ii). Whether the tax demand can be waived merely on technicalities, especially when sufficient evidences are available on record which the appellant has failed to rebut?
24. Brief facts of the case are .That the appellant filed return of income for tax year 2012, declaring income at Rs,613,800/- which was deemed to be an assessment order in terms of section 120 of the Income Tax Ordinance, 2001. The income tax affairs of the taxpayer were selected for audited by the Board under section 214C of the Ordinance. Accordingly, the appellant was asked to furnish document as required for audit proceedings. Further notices as well as show-cause notice under section 122(9) dated 21.06.2014, read with section 122(1)/(5) was issued. The appellant did not challenge the selection of the case for audit and partial compliance to the notices issued. The assessing authority after detailed deliberation on each head of account has made the following additions:-- # Head Section Amount 1 Purchases 111(1)(b) 4,314,648 2 Concealed assets 111(1)(b) 5,760,00 3 Value of vehicles 111(1)(b) 130,600 4 Creditors 111(1)(a) 1,896,584 5 Business capital 111(1)(a) 1,258,699 6 Bank Balance 111(1)(a) 37,205 7 Income from other sources 39(3) 5,600,000 8 Travelling and Misc. 174(2) 331,612 9 Salary and Wages 174(2) 6,447,169 10 Fuel and Lubricants 21(1) 2,432,893 11 Professional charges 21(C) 168,754 12 Salary a/c 21(m) 326,070 13 Depreciation 22(2) 128,650 Consequently, the declared income of the taxpayer was modified at Rs,29,446,630/- and resultant tax liability of Rs,7,361,657/- was created vide order dated 01.08.2014, passed under sections 122(1)/122(5) of the Income Tax Ordinance, 2001.
25. Being aggrieved, the appellant filed first appeal before the CIR(A) on the following grounds:--
1. That the Inland Revenue Officer has wrongly issued order without considering our replies which is against the law.
2. That the Inland Revenue Officer has issued the order without considering our written arguments and clarifications given in support of our case which is against the norms of justice
3. The tax liability calculated by the IRO is not according to tax law.
4. Addition on all expenses was amounting to Rs,28,832,830/- without considering the trade margin of dealer, trade margin was amounting to Rs, 10,406,000/-. Addition of expenses higher than trade margin.
And the learned CIR(A) vide impugned order dated 08.05.2015, dismissed the appeal of the taxpayer.
26. Being aggrieved by the said order of the CIR(A), appellant preferred an appeal before this Tribunal on the following grounds:-
1. That the Appellant Messrs Usman Traders (Ch. Muhammad Irshad Ali) is registered with Federal Board of Revenue vide National Tax Registration No,3239556-6.
2. That the instant appeal is being filed through Mr. Usman Mukhtar NIC # 36302-3009135-3, who is well conversant with the facts of the case and is fully authorized to file the appeal before your Honorable Office.
3. That the appellant receive a show-cause notice, issued by the Respondent vide No,980 dated 21.06.2014, under section 122(9) read with 122(1) and 122(5) or the Income Tax Ordinance, 2001, it was alleged that the Appellant filed annual income tax return for tax year 2012 and declared income at Rs,613,800/- needs alternation and to make addition to income. Copy of Show-cause Notice is enclosed and marked as ANNEXURE-HI. f. That the above submissions and the circumstances clearly prove and establish that the allegation leveled is against the rational and logical reasoning and against the law. g. That the appellant reserves the right to alter, amend or take additional grounds at the time of hearing of the instant appeal."
However during the course of appeal proceedings, the appellant filed M.A. (AG) No,13/2016, whereby he seeks permission of this Tribunal to add the following grounds of appeal:-- "a). That the impugned orders have not been passed within the scope of Section 122(5) of the Income Tax Ordinance, whereas, the initiation of proceedings was made under the said section.
That the impugned orders are bad in law and have not been passed by applying the judicial mind.
That the show-cause notice for order-in-original was void abinitio, therefore, the subsequent proceedings are without jurisdiction and liable to be set-aside. d). That even from initiation of proceedings the principle which have been laid down by the superior courts to conduct an audit within section 122 of the Income Tax Ordinance have not been followed, therefore, the impugned orders are illegal, unlawful and liable to be set-aside. e). That if the appellant is not ahead to add the above mentioned additional grounds to the titled appeal, the appellant shall suffer an irreparable loss and injury of worst magnitude."
27. While considering as vague, the above quoted original grounds filed by previous AR namely Messrs Mudassar Ehtishan & Co., Chartered Accountants, the present newly counstl, Mr. Saeed Ashraf, Advocate, was asked to verify its contents and accordingly he filed photo-copy of the same after putting his signatures which is placed on file as marked "A".
28. In terms of Rule 10 of the ATIR Rules, 2010, every memorandum of appeal shall set forth concisely and under "distinct heads", the specific grounds of appeal without any argument or narrative and such grounds shall be numbered consecutively. Under Rule 14 of the said Rules, an appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal but the Tribunal in deciding the appeal shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal.
29. The learned AR at the time of hearing supported the finding of the learned Judicial Member and submitted that the said findings cater both the factual/merit and legal issues. On the contrary, the learned DR supported the finding of the learned Accountant Member and set her hands on his finding.
30. I have heard both the parties at length and perused the record and found that there is no finding of the Bench with regard to acceptance of above said additional grounds of appeal, however, while expressing my opinion, I am inclined to consider said additional grounds as well.
Perusal of original and additional grounds of appeal reveals that appellant has not challenged any of the addition on its merits as well as on implication of any specific sections quoted at Para-24 above where-under each addition was made. However, as per additional grounds of appeal, the appellant has made emphasis on the issue of "definite information", as envisaged under subsection (5) of section 122. Although the learned JM through its proposed order at Para-2 mentioned the detail of addition under each head, however, his entire proposed order is silent regarding merit of each addition and he has only expressed opinion on the legality of order on the point of "definite information". On the other hand the learned AM at Para-18 of the proposed order has categorically mentioned that " I am of the opinion that the assessing officer does possess sufficient "definite information" gathered from the audit proceedings conducted under section
177. For reference, the learned AM quoted certain instances of the additions and observed that the said discrepancies fall in the definition of "definite information" and the assessing officer duly confronted the same to the taxpayer but he failed to dislodge the same at assessment stage.
Therefore, he opined that the assessing officer has rightly and suitably amended the assessment order. Before the CIR(A) and even before us, the taxpayer failed to make out a case with the help of documentary evidences that the assessing officer has not acted in accordance with law.
31. In the above referred proposed issue/question No, 2 framed with consensus of both the learned Members, it has been categorically observed that "sufficient evidences are available on record which the appellant has failed to rebut" . The same observations of my both brother Members are also sufficient to answer the issue No,1 H whereby the learned Members has seek opinion of the referee Member that as to whether the discrepancies detected by the assessing officer are liable to action under section 122(5) of the Income Tax Ordinance, 2001.
32. In my opinion, while joining the audit proceedings, the taxpayer is bound to reply the each and every query raised by the auditing officer and in terms of subsection (6) of Section 177 of the Ordinance, after completion of the audit, the Commissioner may, if considered necessary, after obtaining taxpayer's explanation on all the issues raised in audit, amend the assessment under subsection (1) or subsection (4) of section 122, as the case may be. In my opinion, each addition made in the present case is outcome of the audit proceedings. Since, the information was gathered during the audit proceedings and, therefore, in my opinion, the same fall within the ambit of subsections (1), (5) of section 122. Accordingly, I concur with the finding of the learned Accountant Member and answer the Issue No,1 in affirmative and issue No,2 in negative.
33. In consequence thereof, the orders of both the authorities below are maintained, the taxpayer's appeal stands rejected and the MA(AG) No,13/LB/2016 accordingly disposed of.