ORDER: ZAFAR HUSSAIN NAQVI, MEMBER.-1. These cross-appeals have been filed by the assessee as well as department and are directed against the order of the learned Appellate Assistant Commissioner relating to the assessment year 1981-82. The assessee, a registered firm, consisting of 18 partners was engaged in the business of welding work for M/s. A. S.M .G.S. 2. The assessee's appeal is taken up first in which objection has been taken to the application of G P. Rate of 20% on normal payments ordered by the Appellate Assistant Commissioner. I he assessee received total payments of Rs. 21,42,865 for carrying out welding work on behalf of the company. The Income lax Officer has framed the ex parte assessment which matter would separately be dealt with hereafter.
In regard to the assessee's appeal the plea is that the total payments were not received by the assessee but part of the payments which related to overtime payment were made to the welders and that the net receipts paid to the company are of the order of Rs. 11,32,079. The Appellate Assistant Commissioner of Income lax dealing with this issue has set aside the case directing the Income lax Officer to re-examine the point and after verification to take a decision on the same. In regard to assessee's plea the G P. Rate of 20% applied by the Appellate Assistant Commissioner on receipts of Rs. 11,32,079 is apparently not unjust. Presuming that the assessee received payments of Rs. 11,32,079 the GP. Declared is Rs. 2,07,899. This would disclose a GP. Rate of 18.9%. Therefore, there is hardly any force in the assessee's plea that GP. Of 20% is high. The assessee's appeal being devoid of any merit is rejected.
3. The department has also objected to the application of G P. Rate of Rs. 20% on the sales from welding against 30% applied by Income lax Officer. We have heard the learned D.R. And note that so far as the question of application of G.P. Rate of 20% in respect of normal payments for welding made to the assessee are concerned neither any parallel case has been quoted, nor is there any past history which could indicate that the G P. Rate of 20" is in the same side, particularly when on the question of balance which were made on overtime charges basis the assessm ent order has been vacated by the learned Appellate Assistant Commissioner and the department would have an opportunity to examine that issue as well as to decide the appropriate rate of G P. Justified according to the circumstances of the case. In this view of the matter we feel that there is no ground for modification of the GP. Rate of 20% to the normal payments.
4. The other ground of appeal taken by the department is that the learned Appellate Assistant Commissioner was not justified in holding that the service of notice under section 61 of the Income lax Ordinance was issued and for alleged default of the notice the best judgment assessm ent was completed. The Departmental Representative has taken the plea that one notice is sufficient and the ex parte assessment was rightly made since. The notice was properly' served on one Mr. M.A. One of the partners. On the other hand the learned Authorised Representative of the assessee had pleaded that it was a case of a registered firm which had maintained the accounts and the case was being dealt with under detailed scrutiny and, therefore, a reasonable opportunity should have been afforded to the assessee to explain its case. On the other hand he also challenged that the notice was not served on the assessee at all since the signature on the notice do not tally with that of the partner Mr. M.A. The Income lax Officer on the other hand had made certain queries from the Managing Director of A.5.P.A. (S.) in regard to payments made to the assessee firm on their own account and additional payments made to other workers direct in connection with the contract of the company. Keeping this information in mind he had proceeded to frame ex parte assessm ent without confronting the assessee with this material, lt is true that for default of notice under section 61 the best judgment assement could be completed, but there is no obligation on ;ne part of the Income lax Officer to necessarily proceed and frame the ex parte assessm ent for default of notice under section 61 which was issued only one. Apparently he has proceeded in an indecent haste particularly when he did not even confront the assessee with the material that he had collected from the employer-company which he should have, if he had no intention to issue a notice under section 62 for requiring further information on specific points. We are, therefore, of the view that best judgment assessment cannot be sustained in this case and the learned Appellate Assistant Commissioner was correct in converting it into a normal assessment.
We may mention in passing that on the question of additional payments the learned Appellate Assistant Commissioner has already set aside the order and the Income lax Officer would decide the issue after making the necessary enquiries, as to whether the payments were made to the assessee or not and what should be the appropriate G. P. Rate on the same.
5. In the result the appeals are decided accordingly.