These five petitions for quashment of the proceedings pending before the Special Judge, Customs & Income-tax, Karachi, which will be disposed of by a common judgment, have arisen in the following circumstances.
2. The applicant had filed income-tax returns for the years 1 q66-67 to 1970-71, in which he had shown his income from Messrs Baseer labora--tories only. During the assessment proceeding, it transpired that he was also doing business in two other names, namely, Japan traders and Messrs International Medical Agency. He was asked to produce the books of account in regard to these two concerns and it was alleged on behalf of the applicant that the business of Japan Traders was stated icy 1965, but was closed later on as it was going to loss. In regard to the latter, tile conten-- petition was that it was being run on behalf of his two minor sons and was again closed due to losses. The Income-tax Officer finding that a conscious concealment of income was involved, with due approval of the Commissioner of Income-tax, Government of Pakistan, Lahore, filed complaint under sections 51 (2) and 52 of the Income-tax Act, against the applicant.
3. It appears that the applicant had preferred appeals against the assessment order of the Income-tex Officer, before the Income-tex Appellate Tribunal, which were disposed of on 26-6- 1974, by a composite order. The contention of the applicant before the Income-tax Appellate Tribunal was that the income accruing from 'Messrs Japan Traders in the sum of Rs. 1,976, Rs. 1,101 and Rs. 1,289, had been indicated in the returns for three years and the separate existence of Japan Traders was not specifically dismissed in the original returns, because the applicant wanted to avail of the benefits of self-assessment scheme, which would have not been available if the applicant had disclosed and claimed the losses that he had suffered in this venture. It was further urged that the assessm ent was made on false assumptions, and the Departmental Representative, as the order discloses, could not controvert the came. The Income-tax Appellate Tribunal there-- fore found that the finding of the Income-Tax Officer could not be sustained, arid as a result, his order on that score was vacated.
4. In regard to Messrs International Medical Agency, the contention of the appellant that the business was being run on behalf of his two minor sons, was repelled, but the alternative plea that the income therefore had teen accounted for in the book of Baseer Laboratories, was upheld, The addition, therefore, made by the Income-tax Officer in regard to the profits from this business, was again not sustained and the order of the Income-tax Officer was vacated. The direction given to the Income-tax Officer was that on the basis of the sale adopted by the applicant from the bank accounts, suitable profit should be worked out and the expenses, as admissible or approved, should be allowed against the profit.
5. The order of the Income-tax Officer in regard to the assessment having been merged in the order of the Income-tax Appellate Tribunal, and the letter absolving the applicant the charge of conscious or deliberate concealment, the very basis of the prosecution would be undermined The prosecution pending against the applicant before the learned Special Judge, Customs & Income- tax. Karachi, under the circumstances, would be an abuse of the process of law.
6. In this view of the matter, I will allow the application, and quash the proceedings, which are pending against the applicant before the Special Judge, Customs & Income-tax, Karachi.