1. SAIYED SAEED ASHHAD (JUDICIAL MEMBER): --This appeal has been filed by the assessee against the order of the learned IAC, Sialkot Range, dated 29-3-90. The grievance of the appellant which led him to file the above appeal is with regard to the finding of the [earned IAC in his above order whereby he cancelled the assessme nt for the assessment year 1987-88 framed under section 62/65 of the Income Tax Ordinance with the direction to make fresh assessment in accordance with past history. We have heard the arguments of Mr. Agha Ali Imran, the learned Advocate of the appellant and Mr. Aftab Iqbal Lone, the learned D.R. And have also perused the material on record.
2. The initial assessm ent for the above assessment year was finalized under section 59(1) of the Income Tax Ordinance at income of Rs.82,940. The same was reopened under section 65 on the ground of suppression of payment and assessment was finalized under section 62/65 of the Income Tax Ordinance wherein G.P. Rate of 17.5% was applied on total receipts of Rs.941,704.
3. Thereafter, it transpired to the learned IAC that the assessee had a history of application of N.P.
4. Rate at 15% on gross receipts in respect of the assessment years 1984-85 to 1986-87 and that application of G.P. Rate of 17.5% on total receipts would amount to loss of revenue to the Government and that the assessm ent was erroneous and prejudicial to the interest of Revenue. It is, however, to be observed that this Tribunal has always deprecated the application of N.P. Rate and has favoured the application of G.P. Rate on the total receipts declared by the assessee. The attention of this Tribunal was drawn by the learned D.R. To the fact that' application of N.P. Rate of 15% in case of the appellant in the assessment years 1984-85 to 1986-87 was not challenged by the appellant and it had become appellant's past history, which he was precluded and estopped from challenging. In this connection it is to be observed that no action or finding which is contrary to the finding or practice laid down by the Tribunal could be said to form or establish history and no reliance could be placed on such a finding. The loss of revenue resulting to the Government on account of assessm ent not based on a strict compliance of the provisions of law could not be considered to be an assessm ent which was erroneous or prejudicial to the interest of the revenue so as to authorise the IAC to exercise the powers conferred by section 66-A of the Income Tax Ordinance. We are satisfied that the ITO had rightly applied the G.P. Rate of 17.5% in finalizing the assessm ent under section 62/65 of the Income Tax Ordinance and the assessment so framed could not by any stretch of imagination be said to be erroneous or prejudicial to the Revenue inasmuch as the extra revenue which would have resulted in this case by resorting to 'the previous practice of application of NY rate on gross receipt would have been earned by not following and adhering to law and the practice and procedure approved by this Tribunal and in our view the resultant gain would be illegal, and stoppage thereof would not amount to an illegality or mistake of the nature to warrant action under section 66-A of the Income Tax Ordinance. From the above discussion we are satisfied that the impugned order was not at all called for and cannot be sustained. Accordingly, the above appeal is allowed and the order of the IA.C. Directing reassessm ent is vacated and the order of the ITO, applying G.P. Rate of 17.5% is restored.