' MUHAMMAD JAWED ZAKARIA (JUDICIAL MEMBER).---By this order, I intend to dispose the above titled appeal filed by the taxpayer against the impugned order No,493 dated 26-11-2013 passed by the learned CIR (Appeals-III), Hyderabad. The taxpayer has raised the grounds of appeal as put- forth in the memo of appeal.
2. Brief facts of the case as transpired from the record are that the taxpayer is an AOP filed return of income declaring at Rs,710,000/- on which tax was worked out at Rs,79,853/-. The return so filed was deemed order as per fiction of law under section 120 of the Income Tax Ordinance, 2001.
Scrutiny of return revealed that taxpayer had declared A turnover of Rs,89,750,000/- and its tax as per Section 113 @ 1% comes to Rs,897,500/- which has not been charged and paid. The deemed order was amended under section 122(5A) of the Income Tax Ordinance, 2001 after issuance of show cause notice under section 122(9) and tax was charged as per Section 113.
3. Being aggrieved and dissatisfied with the treatment meted out by the ACIR, taxpayer filed appeal before the learned CIR(A) who vide his impugned order confirmed the action of the ACIR.
4. Again feeling aggrieved and dissatisfied with the impugned order passed by the learned CIR(A) now the taxpayer has come up in appeal before this Tribunal.
5. This court issued notice to both parties, in response thereto, Mr. Ajeet Sundar, Advocate, appeared on behalf of the taxpayer while Ch.Tassawar Iqbal Bhumla appeared on behalf of the respondent/ department as D.R.
6. At the very outset, learned counsel for the taxpayer contended that the learned CIR(A)
Hyderabad had erred in confirming the order passed under section 122(5A) of the Income Tax Ordinance, 2001 which has not framed according to law and procedure, without any basis, the same is illegal, unjustified and without any lawful authority. Learned Counsel for the taxpayer further argued that the learned CIR(A) Hyderabad had erred in confirming the order framed under section 122(5A) of the Income Tax Ordinance, 2001 as the taxpayer is not liable to minimum tax under section 113 at the rate of 1%. The taxpayer is a Rice Miller and is liable to minimum tax at 0.20% as provided by clause (13) of Part-III of Second Schedule of the Income Tax Ordinance, 2001. The said clause has allowed the tax reduction of 80%, this clause was introduced on the statute vide S.R.O. No,57(I)/2012 dated 24-01-2012. Further contended that the clause so introduced is beneficial in nature, therefore, it has retrospective effect i,e, the rebate was also admissible for the tax year 2011. According to learned counsel for the taxpayer the ACIR has no legal authority to raise/levy further tax after finalization of assessment under section 120 of the Income Tax Ordinance, 2001.
Thus, the learned ACIR misused the power and acted beyond his jurisdiction or in excess of his jurisdiction. The learned counsel for the taxpayer also referred and cited the case laws regarding effect of beneficial amendment (1) 2013 PTD (Trib.) 589 (603), (2) 2013 PTD (Trib.) 1684 (1689), (3)
2015 PTD (Trib.) 434 (34), (4) 2015 PTD (Trib.) 1625 (1634), (5) 2015 PTD 2570 and (6) 2016 PTD 325.
Finally, he has prayed that the impugned order passed by the learned CIR(A) be vacated.
7. On the other hand, learned D.R. Strongly opposed the contentions made by the learned counsel for the taxpayer. He has supported the order passed by the officers below, Learned D.R. Has argued that the taxpayer was liable to pay turnover tax under section 113(3)(a) of the Income Tax Ordinance, 2001 but the taxpayer has not fully discharged tax liability under section 113 of the Income Tax Ordinance, 2001 and claimed tax reduction a 80% which is not allowable under the law.
He has further contended that the impugned order passed by the learned CIR(A) is legal, lawful and within the framework of law. Lastly, he has prayed that impugned order passed by the learned CIR(A) be maintained.
8. Heard the Learned Representatives from both the sides and have perused the impugned order of learned CIR (A) as well as order passed by the OIR. It is observed that the learned CIR(A) had failed to allow reasonable opportunity of being heard to the taxpayer. It is worth mentioning that any remedial enactment shall be considered in favour of the taxpayer. Since the SRO has been issued in the period pertaining to the tax year 2012, the same applies in appellant's case as well. These findings gains support from the following case laws:-- ' Remedial and cu actively stature has retrosactive effect CIT v. Shahnawaz Ltd. And others 1993 SCMR 73 "The amended in relevant section was a remedial and curative legislation designed to soften the harsh, unjust and unreasonable law, as was then obtaining not restricting the maximum period for levy of additional tax. There is no reason why the remedial law should not be applied to pending proceedings. Although the amendment was made by the Finance Act, 1973 but it could not be restricted to assessm ent year 1973-74. The retrospective remedy would be available to all cases which were pending at the time the amending law was enacted i,e, cases which had not been finally determined or proceedings which had not attained finality. The retrospective effect of the amending law, would, therefore, apply only those case where assessment had not been made by the Income Tax Officers or where an appeal was pending before the Tribunal or a reference was sub-judice before the High Court, at the time amending law was enacted. The case which had been finally determined or had attained finality i,e, which were past and closed transaction could not be reopened under amending legislation there are no express words to that effect employed in the amending law."
All provisions which come to cure/redress or to allow relief to assess will always have effect retrospectively 2004 PTD (Trib.) 2417'"This is a limitation, an embargo on the assessing officer which has provided solace to the long hanging disadvantage to the assessee. It has come as a remedy and has cured a fault. All such provisions which come to cure/redress or to allow relief would always have the effect retrospectively. The question proposed by the department is of no help. Our decision that this provision is retrospectively applies on all pending cases up to the stage of High Court. Thus even if the notice has been issued earlier it shall become illegal if hit by said amendment. Here again we find strength from the judgment of the Supreme Court referred by us supra."
Beneficial executive order/notification has retrospective effect Ellahi Cotton Mills Ltd. And others v.
Federation of Pakistan through Secretary, Finance, Islamabad PLD 1997 SC 582 = 1997 PTD 1555.
"An executive order/notification, which is detrimental or prejudicial to the interest of revenue of a person, cannot operate retrospectively. However, a beneficial executive order/ notification issued by an executive functionary can be given retrospectively effect.."
9. Keeping in view of the above facts and circumstances of the case, that the learned CIR(A) has failed to apply his judicial mind and confirmed the order of the DCIR without considering the arguments of the taxpayer, hence the orders passed by the authorities below are hereby vacated.
10. Resultantly, the appeal filed at the instance of Appellant/taxpayer is hereby allowed.