The above Income Tax Appeals have been filed by the appellant/ taxpayer against the order No. I.T/250-2016, dated 05.06.2017 passed by the Commissioner Inland Revenue (Appeals), Quetta on the following common/similar grounds; "1. That the learned Commissioner (Appeals) Quetta/Sukkur has erred in passing the order No. I.T.-250/2016 dated 05.06.2017 whereby he rejected the Appeal No. 271/2016 which was filed against the Order. Under section 161 dated 05-12-2016 (Document dated 25-1-2017), DCR No. 38/71 passed by ACIR, WHT Unit No. VI, RTO Quetta wherein a tax of Rs. 4795055 was levied. (bar code 100000018454661)
DOUBLE ORDER
2. That the Commissioner (A) has unjustly confirmed the above impugned Order bearing DC No. 38/71, a double Order.
3. No another order can be passed in presence of Original order dated 28-1-2016 which is support with generated Demand Notice under section 137(2) bearing Bar Code No. NMs 201456829940-1 (Document No. 172059-1 dated 29-1-2016)
4. That the learned Commissioner (A) easily rejected the original order dated 28-1-2016 supported with generated Demand Notice bearing Bar code with Document number. He rejected the original order as he found that Order signed as TC without bar code and D.C. number.
TAX RECOVERY U/S 140
5. That the Commissioner (A) ignored the tax recovery proceedings under section 140. The DCIR issued Notice under section 140 vide his No. IRO/WHT/II/ZONE-1/RTO/QTA/ 2015-16/697 dated 11-3- 2016 to Bank Alfalah.
6. Bank paid above amount through PAY ORDER dated 14-4-2016 A/C No. 9080924. After receipt of pay order, the DCIR issued another Notice vide No. IRO/WHT/Zone-1/ RTO/Qta/ 2015-16/827 dated 23-4-2016 whereby he revoked his Notice issued earlier under section 140.
7. The Commissioner (A) again ignored the challan CPR No. IT-20160416-0051-1132751 which clearly confirms the encashment of above Pay Order."
2. Brief facts of the case as transpired from the record are that the taxpayer is an AOP running Flour Mill. Return of Income / statement of Final Taxation for the Tax Years 2014 and 2015 were filed, electronically. The taxpayer qualifies as a prescribed person as laid down in sub-clause (b) of the clause-I of the subsection (7) of the section 153 of the Income Tax Ordinance, 2001. The taxpayer was required to deduct tax under subsection (1) of the section 153 of the Income Tax Ordinance, 2001 in respect of payments made on account of purchases made, services acquired and contracts executed. On the perusal of the Withholding Statements filed by the above named taxpayer for the Tax Years 2014 and 2015, it transpired that the taxpayer has not made deduction of withholding tax. Before passing such an order, the taxpayer was provided with an opportunity of being heard as contemplated under section 161 of the Income Tax Ordinance, 2001 to offer his explanation with substantial documentary evidence, vide office letter dated 30-12-2015.
3. Being aggrieved with the order of the OIR, the taxpayer/ Respondent filed appeal before the Commissioner (Appeals), Quetta who vide his order dated 05.06.2017 rejected the appeals of the taxpayers.
4. Being dissatisfied with the order of the Commissioner (Appeals), the appellant/taxpayer has come up to this forum for redressal of their grievance.
5. On the date of hearing, Mr. Udha Ram Rajput, Advocate appeared on behalf of the Appellant/taxpayer while Mr. Sardar Abdul Rab, D.R. attended the case on behalf of the Respondent/ Department.
6. The learned AR of the taxpayer argued that the learned Commissioner (Appeals) Quetta/Sukkur has erred in passing the order No. I.T. - 250/2016 dated 05.06.2017 whereby he rejected the appeal No. 271/2016 which was filed against the Order under section 161 dated 06.12.2016 (Document dated 25-1-2017), DCR No. 38/71 passed by ACIR, WHT Unit No. VI, RTO Quetta wherein a tax of Rs.
4795055/-was levied. He further argued that the Commissioner(A) has unjustly confirmed the above impugned Order bearing DC No. 38/71, a double Order.
7. The learned AR of the of the taxpayer contended that no another order can be passed in presence of Original order dated 28-1-2016 which is supported with generated Demand Notice under section 137(2) bearing Bar Code No. NMs 2014-56829940-1 (Document No. 172059-1 dated 29-1-2016). He further contended that the learned Commissioner(A) easily rejected the original order dated 28-1-2016 although supported by generated Demand Notice bearing Bar code with Document number. He rejected the original order as he found that Order signed as TC without bar code and D.C. number.
8. The learned AR of the taxpayer contested that the Commissioner(A) ignored the tax recovery proceedings under section 140. The DCIR issued Notice under section 140 vide his No. IRO/ WHT/II/ZONE-1/RTO/QTA/2015-16/697 dated 11-3-2016 to Bank Alfalah. He further contested that the Bank paid above amount through PAY ORDER dated 14.4.2016 A/C No. 9080924. After receipt of pay order, the DCIR issued another Notice vide No. IRO/WHT/Zone-1/ RTO/Qta/2015- 16/827 dated 23-4- 2016 whereby he revoked his Notice issued earlier under section 140. According to him, the Commissioner(A) again ignored the challan CPR No. IT -20160416--0051-1132751 which clearly confirms the encashment of above Pay Order.
9. On the other hand, Mr. Sardar Abdul Rab, D.R appearing on behalf of the Respondent / Department vehemently opposed the contentions made by the AR. He argued that the order passed by the learned CIR(A) is well within the framework of law and carries no illegality, irregularity and infirmity in it.
10. We have carefully examined the record of the case which transpires that the taxpayer's case was selected for monitoring of withholding taxes for the tax years 2014 and 2015 and as a result of such monitoring orders were issued under sections 161/205 of the Income Tax Ordinance, 2001. For tax year 2014 order dated 26.01.2016 was issued creating a tax liability of Rs. 101,787/-. This order however does not contain any bar-code and is without DCR number which according to the Department are integral part to prove the authenticity of any order/notice. As a consequence of the order dated 26.01.2016 referred supra, the Inland Revenue Officer issued notice under section 137(2) on 29.01.2016 asking the taxpayer to pay Rs.101,787/- adjudged tax liability vide order dated 26.01.2016. Non-compliance of the taxpayer resulted in recovery proceedings whereby the taxpayer's account was attached and the outstanding tax liability @ Rs. 101,787/- was recovered through bank draft/pay order which was deposited into government treasury vide CPR No. IT- 20160416-0051-1132751 dated 16.04.2016. Both, the recovery notice dated 29.01.2016 issued under section 137(2) of the Ordinance and the C.P.R are duly bar-coded and are not disputed by the Department with regards to their authenticity/ genuineness.
11.The case record further reveals that fresh proceedings for monitoring of withholding tax were initiated for the same tax year i.e. 2014 and a show-cause notice was issued under sections 161/205 of the Income Tax Ordinance. Despite proper service of notice, the taxpayer did not attended the proceedings and ex parte order under DCR No.38/71, dated 06.12.2016 was issued whereby a tax liability of Rs. 47,95,055/- was created. Being aggrieved with the said treatment, the taxpayer filed appeal before the learned Commissioner (A) for redressal of their grievance. The AR argued before the learned CIR(A) that assessm ent of withholding tax liability has already been done vide order dated 26.01.2016 and initiation of fresh proceedings on the same issue amounts to "double jeopardy" which is against the principles of law and violative of the constitutional protection provided under Article 13 of the Constitution of Islamic Republic of Pakistan. The argument however could not find favour of the CIR(A) who while deciding the case held that an order without a bar code is of no legal consequence, not genuine, fake or fictitious. Reference 'was made to a Circular issued by FBR vide C.No.1(177)S(IDT-FATE)/2015 dated 30.06.2015 which read as under:- "Government of Pakistan Federal Board of Revenue (FATE wing)
C. No. 1(177) S (IDT-FATE)/2015Islamabad the 30th June. 2015 To, All Chief Commissioner RTOs/LTUs. All DGs, FBR Subject:- PRINTING OF BAR CODE ON NOTICES ISSUED UNDER INCOME TAX ORDINANCE, 2001 - REGARDING INSTRUCTIONS.
I am directed to refer to the subject and to convey that the following:- FBR Board-in-Council directed on 29th June, 2015 that no notice under Income Tax Ordinance, 2001 be issued to taxpayers without a system printed Bar Code. This instruction is effective from 1st July 2015. Press Release in this regard stands issued by FBR on 29.06.2015 and Taxpayers are informed through newspapers of 30.06.2015 to intimate of such notices received without bar code. Member IT has informed Board-in-Council (29th June, 2015) that Database Administrators (DBA) are ready in all RTOs/ LTUs and they can instruct officers/auditors by imparting a 15 minutes training in use of printing bar code.
2. I am further directed to convey that Chief Commissioners/ Director Generals many arrange to have all their officers trained in this matter at RTOs/LTUs on July 1st, 2015, under intimation to this office.
3. An internal office circular also be issued by all RTOs/LTUs/ DGs to all their officers that no Income tax notice be issued w.e.f. 1st July, 2015 without containing a system generated Bar Code.
4. In case of any queries, the DBAs should be contacted at RTOs/ LTUs. On persistence of any hurdle, the Member, IT be informed, with a copy of this office.
(Nida Anum)
Second Secretary (FATE)"
12. Perusal of the above Circular transpires that prima facie it was issued to save the taxpayers from harassm ent at the hand of unscrupulous elements of the department and to streamline the process of inter-action between the taxpayer and the officials of the tax machinery. The Circular does not declare any correspondence as "illegal" if it does not contain the system printed bar- code.
13.It is an admitted position by the DR that recovery notice (duly bar-coded) was issued to the taxpayer and recovery effected through attachment of bank account of the taxpayer and the amount was duly deposited in the government treasury through duly bar-coded computerized Payment Receipt (CPR). According to AR the monitoring of withholding taxes for tax year 2014 was past and closed transaction and cannot be taken up afresh.
14. Be that as it may, we are of the opinion that the learned Commissioner (A) has erred in holding the original proceeding as nullity in the eyes of law for want of bar-code and other procedural lapses as the department proceeded with the recovery of adjudged amount and the case entered the realm of past and close transaction. In our considered opinion it is a case of double jeopardy, violative of constitutional guarantees and cannot be allowed to hold the field. The above view gains support from the decision by Hon'ble Lahore High Court reported as 2016 PTD 270 which is reproduced hereunder for the ease of reference:-
(b) Income Tax Ordinance (XLIX of 2001)--- " S. 221----Rectification of mistake----Fresh assessment for errors and omissions----Permissibility ---If there is any mistake, deficiency or error in calculation of tax, same can be rectified under S.221 of Income Tax Ordinance, 2001---When assessment has been made in respect of income of taxpayer, any error or omission appearing therein can be rectified under S. 221 of Income Tax Ordinance, 2001---Fresh assessm ent cannot be made in that respect as that will be double assessm ent, which is not permissible under law. [p. 282] E Respectfully following the dictum as laid down in the LHC judgment quoted supra and various other judgments of superior courts and after examining the case record, hearing the rival parties, we are of the opinion that fresh proceedings initiated by the Department are not of rectifactory nature under section 221 of the I.T. Ordinance, 2001 but are re-assessment of tax which is against the principle of "res-judicata".
15.In view of the foregoing, the orders passed by the OIR and CIR(A) in fresh proceedings are held as of no legal consequence and the appeal of the taxpayer is allowed.
16.Since identical issues are invoked in tax year 2015, this order shall, mutates muandis apply to the case pertaining to tax year 2015.