1. This order disposes of Income Tax Officers appeals against the Commissioner of Income Tax (Appeals) order, dated 24-11-1994 whereby the Workers' Welfare Fund levied by the Income Tax Officer on the assessee relating to the assessment years 1987-88, 1988-89, 1989-90, 1990-91, 1991- 92 and 1992- 93 was cancelled.
2. The assessee, a registered firm, derives income from running an ice factory.
3. Sub-section (1) of section 4 of the Workers' Welfare Fund Ordinance, 1971 (the 1971 Ordinance), so far as material, provides that every industrial establishment the total income of which in any year of account is not less than one lakh of rupees shall pay to the Fund (the Workers' Welfare Fund constituted under the 1971 Ordinance) in respect of that year a sum equal to two per cent, of so much of its total income as is assessable under the Income Tax Ordinance, 1979 (the 1979 Ordinance). Subsection (4) of section 4 of the 1971 Ordinance provides that at the time of making an assessm ent under the 1979 Ordinance, or as soon thereafter as may be, the Income Tax Officer shall, by order in writing, determine the amount due from the industrial establishment under sub- section (1), If any, on the basis of the income so assessed after taking into account the amount paid by the industrial establishment under sub-section (3) in respect of the year, and the industrial establishment shall pay the amount so determined on or before the date specified in the order.
4. The assessing officer while making assessments orders under the 1979 Ordinance relating to the assessm ent years 1987- 88, 1988-89, 1989-90, 1990-91 and 1991-92 omitted to determine the amount of the Fund on the basis of the assessees assessed income for the said assessment years. The assessing officer, however, determined the amount by his order, dated 14-9-1993. The dates on which the assessm ent orders under the 1979 Ordinance were made in respect of each of the above assessm ent years and the time that elapsed between the date of making the assessment order and the date of determining the amount of the Fund payable by the assessee are given in the following chart:-- Assessment YearDate of Assessment OrderDate of levying the FundTime that elapsed between the dates in Col. 2 + 3
(1) (2) (3) (4) Years Months Days 1987-88 29-2-1988 14-9-1993 5 6 15 1988-89 27-6-1990 14-9-1993 3 2 17 1989-90 27-6-1991 14-9-1993 2 2 17 1990-91 26-6-1993 14-9-1993 0 2 18 1991-92 09-9-1992 14-9-1993 1 0 5 1992-93 27-3-1993 14-9-1993 0 5 17
5. On assessees appeals the Appeal Commissioner relying on this Tribunals decisions reported 1987 PTD (Trib.) 580 = (1987) 56 Tax 101 (Trib.) has, as indicated above, cancelled the levy.
6. Through these appeals the assessing officer has objected to the order of the Appeal Commissioner on the ground that he was not justified to cancel the levy on the. Ground "that the order for the levy of the Fund should have been passed within a week after passing of the assessm ent order of the relevant year when the law does not provide for any such limitation."
7. We have heard Mr. Muhammad Irshad, D.R. For the I. T.O. None has appeared for the assessee.
8. As stated earlier sub-section (4) of section 4 of the 1971 Ordinance provides that the amount of the Fund shall be determined by the assessing officer at the time of making an assessment under the 1979 Ordinance or as soon thereafter as may be. The expression "as soon thereafter as may be" used in sub-section (4) of section 4 ibid was considered by this Tribunal in its decision 1987 PTD (Trib.) 580 = (1987) 56 Tax 101 (Trib.) and the Tribunal relying on its an earlier decision in TTA No. 1696(KB) of 1992-93 dated 5-5-1987, 1987PTD (Trib.) 580; 1987 PTD (Trib.) 506 held that it should mean "only in number of days and not in years". In its earlier decision the Tribunal had held that an assessing officer can rectify the omission or mistake within reasonable time. In handing down its decision the Tribunal relied on the principle that the liability of an assessee must be made final, and when an assessm ent is made on an assessee he must be informed of his total liability in the notice of demand. It means that all sums payable by an assessee must be ascertained before he is required to make the payment. The Tribunal confirmed that convenience and certainty are among the fundamental principles of taxation. Thus, it will be quite unjustified to require an assessee to pay the Fund much later in time when the assessment was made on him.
9. In 1987 PTD (Trib.) 580 = 1(987) 56 Tax 101 (Trib.) the assessment order relating to the Assessment year 1973-74 was made on 23-12-1974. The assessing officer omitted to levy the Fund at the time of making the assessm ent order. The Fund was levied by a subsequent order, dated 30-6-1980. The Tribunal directed that the levy of the Fund shall be deleted because the action of the I.T.O, levying the Fund after the lapse of six years was neither certain nor convenient for the taxpayer. In a latter case reported 1990-PTD (Trib.) 1014 = (1991) 63 Tax 116 (Trib.); the assessing officer omitted to levy the Fund while making the assessme nt orders in respect of the Assessment years 1983-84 and 1984-85 on 11-2-1984 and 16-5-1984 respectively. The Fund was levied subsequently by order, dated 14-10-1987. The Tribunal held that the levy of the Fund after three years from the making of the assessm ent order could not be said to have been made as soon after the making of the assessm ent order as was required by sub-section (4) of section 4 of the 1971 Ordinance as interpreted by the Tribunal in its decision 1987 PTD (Trib.) 580 = (1987) 56 Tax 101 (Trib.).
10. What definite time shall be considered as the reasonable time within which an assessing officer shall have the power to levy the Fund if he omits to levy it at the time of making an assessment order has not been precisely determined by any precedent. Our study shows that the reasonableness of the time has been decided on case to case basis. Thus we feel that there is a need that a reasonable upper limit of the reasonable time is indicated. Such indication is necessary for the sake of convenience and certainty being the relevant canons of tax administration.
11. We find that where a statute has not fixed any period for entertaining any proceedings the period of ninety days is considered to be the reasonable time. The best instance can be quoted section 115 of the Code of Civil Procedure. Section 115 of the Code before its recent amendment did not provide any period of limitation within which the Court could call for the record of the case to exercise its powers under that section. The decisional rule was, however, established that the period of ninety days shall be considered reasonable time within which any proceedings under section 115 of the Code of Civil Procedure could be initiated. Following the same rule we would hold that the period of ninety days shall be the reasonable time in which an assessing officer can levy the Fund if he omits to levy it while making the assessment order.
12. Judging on the above criteria it is evident that only in respect of the assessment year 1990-91 the assessing officer levied the Fund within ninety days after making the assessment order. In respect of that year the ITOs appeal is allowed. The order of the Appeal Commissioner is vacated and of the I.T.O, is restored. The I.T.O.'s appeals relating to the remaining assessment years are rejected.