1. ' S. SAEED ASHHAD, J.---This Constitutional Petition has been filed by the petitioner, wherein the following reliefs have been prayed for:---
(a) declare the impugned notices under section 65 of the Income Tax Ordinance, 1979, and proceeding conducted in pursuance thereof for Assessment years 1991-92 and 1992-93, dated 31- 6-1997 are unlawful, without jurisdiction and of no legal effect.
(b) restrained the respondents from carrying on proceedings of reassessment in pursuance of impugned notices all, dated 21-6-1997 by themselves or through any alter agency.
(c) grant cost of this petition.
(d) grant any other relief, this Hon'ble Court deem fit.
2. ' The facts leading to the filing of this Constitutional Petition are that the petitioner, a Private Limited Company filed its returns of Income for the assessment years 1991-92 and 1992-93 declaring an income of Rs,10,69,509 and 19,20,448 respectively. In its aforesaid returns, the petitioner claimed Tax Credit under section 107 of the Income Tax Ordinance, 1979 (hereinafter referred to as the Ordinance) on account of Balancing, Modernizing and replacement (hereinafter referred as B.M.R.) amounting to Rs,1,88,80,501 on import/purchases of plant and machinery valued at Rs,12,58,70,008 for the Assessm ent year 1991-92 and Rs,35,57,520 on the import and purchases of plant and machinery of the value of Rs,2,37,16,800 for the assessment year 1992-93. The Assessing Officer finalized the assessm ent for the aforesaid two assessment years under section 62 read with section 156 of the Ordinance allowing the Tax Credit claimed by the petitioner under section 107 of the Ordinance subject to the production of installation certificates and verification of purchase/import of machinery under B.M.R. Not satisfied with the aforesaid assessments, the petitioner filed appeals before the Commissioner of Income-tax (Appeals) Hyderabad, who by his order, dated 1-2-1994 set aside the two assessment orders. Respondent No,3 made fresh assessm ent orders in respect of the aforesaid two assessment years under section 62 read with section 132 of the Ordinance and allowed the Tax Credit for both the assessment years. Thereafter, respondent No,3 issued a combined notice for the aforesaid two assessment years requiring the petitioner to furnish the installation certificate, details and verification of import of machinery under the B.M.R. And the valuation thereof on which tax credit was claimed. The petitioner further submitted that though satisfactory explanation was given by them yet respondent No,3 issued another notice, which was also complied with. Thereafter, respondent No,3 issued a combined show-cause notice for the aforesaid two assessment years for re-opening the case under section 65 of the Income Tax Ordinance on the ground that the tax credit for B.M.R. Was wrongly allowed.
3. The petitioner replied to the said show-cause notice informing that the necessary certificates and details were supplied during the re-assessment proceedings, but respondent No,3 issued another show-cause notice under section 65 of the Income Tax Ordinance for re-opening the assessment for the aforesaid two assessm ent years. According to the petitioner a proper and satisfactory explanation was given to respondent No,3, but the same was not held to be satisfactory by him and he issued a fresh notice under section 65 of the Income Tax Ordinance for the aforesaid two assessm ent years for compliance on 21-6-1997. The petitioner further submitted that respondent No,3 could not invoke the provisions of section 65 of the Income Tax Ordinance in respect of the aforesaid two assessm ent years as the assessments had been finalized in accordance with law and the successor Assessing Officer was not authorised to re-open the cases under section 65 of the Ordinance, because he had taken a different view on the material available before the previous Assessing Officer.
4. ' Pre-admission notices were issued to the respondents and the learned counsel for the parties were put on notice that the petitioner would be heard, admitted if need be and disposed of on merits.
5. ' Mr. Rehan Hassan Naqvi, the learned Advocate for the petitioner submitted that the action of respondent No,3 in issuing show-cause notice under section 65 of the Ordinance for re-opening the cases of the petitioner for the aforesaid two assessment years was mala fide, illegal and in arbitrary exercise of the jurisdiction vesting in him. Elaborating his arguments he submitted that the assessm ents for the aforesaid two assessment years had been finalized by the concerned Assessing Officer consciously by application of mind in accordance with the provisions of the Ordinance and there being no illegality or irregularity in the assessments framed by the Assessing Officer under section 62 read with section 132 of the Ordinance their reopening was not warranted under the provisions of section 65 of the Ordinance on the basis of the material already on record.
6. He further submitted that the assessments for the aforesaid two assessment years were past and closed transaction and could be re-opened only if respondent No,3 have come into possession of definite information to establish that any income chargeable to tax under the Ordinance had escaped assessm ent, or the total income of an assessee had been under assessed or assessed at too low a rate, or had been the subject of excessive relief or refund under the Ordinance. As to what amounted to definite information, he referred us to the case of Messrs Central Insurance Co. And others v. The Central Board of Revenue Islamabad and others, reported in 1993 SCM R 1232 wherein the Supreme Court had elaborated the term definite information and submitted that grounds advanced by respondent No,3 for re-opening the assessments could not be treated as definite information. He also relied on the observations of the Supreme Court in the case of Inspecting Assistant Commissioner and another v. Pakistan Herald Ltd. Through Director Finance & Corporate Affairs, reported in 1997 PTD 1485 in support of his contention that material and information already available on record and considered in making the assessment could not be made the basis for reopening of the assessm ent under section 65 of the Ordinance and further that definite information meant some extraneous or outside information or material. He further submitted that the show-cause notice issued for reopening the assessments for the aforesaid two assessment years was based on the whims, change of opinion and malice of respondent No,3 and was an absolutely unlawful, arbitrary and void action for which no remedy was available under the Income Tax Ordinance and the only option available to the petitioner was to challenge the arbitrary, unlawful and illegal action of respondent No,3 by invoking the Constitutional jurisdiction of this Court. He finally argued that in view of the arguments advanced by him, this Constitutional petition could not be said to be misconceived and not maintainable and the petitioner is entitled to the reliefs claimed. Mr. Shaikh Haider, the learned Advocate appearing on behalf of the respondents vehemently objected to the maintainability of this Constitutional Petition on the ground that Constitutional jurisdiction cannot be invoked on the basis of a show-cause notice issued in accordance with the provisions of section 65 of the Ordinance for re-opening the assessment for the two assessm ent years in question and for initiating re-assessment proceedings. He further submitted that the proper course for the petitioner was to participate in the reassessment proceedings and if an unfavourable assessment was made against the petitioner, the same could be challenged by way of an appeal before the Commissioner of Income Tax (Appeals). He further submitted that it is an established principle of law that where a statute does not provide for filing of an appeal or any other remedy for challenging the order of any authority acting there under, then the same can also not be challenged by way of a Constitutional petition. In support of his contention he has placed reliance on the case of Syed Saghir Ahmad Naqvi v. Province of Sindh through Chief Secretary, S&GAD, Karachi and another reported in 1996 SCM R 1165 wherein the Supreme Court observed that no Constitutional petition would lie against an order which could not be assailed by way of appeal under the principle statute before the forum provided by the statute.
7. Mr. Shaikh Haider further attacked the maintainability of this Constitutional petition on the ground that it was premature as no adverse order had yet been passed against the petitioner and the petitioner cannot say with any certainty that respondent No,3 in finalizing the re-assessment would pass an adverse order, thus, giving no cause of action to the petitioner for filing the Constitutional petition.
8. ' Another ground, on which the maintainability of this Constitutional petition was attacked by Mr. Shaikh Haider is that the issues/questions involved therein require an enquiry into factual aspects, which cannot be decided or determined on the basis of the material on record and an investigation/enquiry would have to be undertaken to decide as to whether the petitioner had produced the requisite certificates relating to the installation of machinery and details of import/purchase as well as the purchase price thereof and payment of the taxes, duties, etc., thereon. He further submitted that this Court in exercise of its Constitutional jurisdiction would not normally resort to holding an enquiry for determining controversial factual aspects involved herein, thus, this Constitutional petition would not warrant to be entertained and ought to be dismissed in limine. In support of this contention, he placed reliance on the dictum laid down by the Supreme Court in the case of Fateh Ali v. Province of Balochistan through Secretary Health and others, reported in 1997 SCM R 1687. He further submitted that respondent No,3 on scrutiny of the record of the petitioner's case relating to the aforesaid two assessment years found that the Tax Credit had been wrongly allowed to the petitioner, as it had failed to produce the requisite certificate relating to the installation of machinery and details regarding the import of the machinery, the price thereof and payment of the taxes and duties payable thereon which necessitated issuance of a notice under section 65 of the Income Tax Ordinance and all that the assessees was required to do was to produce all the relevant certificates and details to satisfy respondent No,3 of its entitlement to relief of tax credit claimed by it. He further submitted that there was no mala fide or ulterior motive on the part of respondent No,3 for issuance of the combined show-cause notice to the petitioner for re-opening the assessment in respect of the aforesaid two assessment years and further that issuance of notice under section 65 of the Ordinance by respondent No,3 was in exercise of the power and jurisdiction vested in him and that absence of mala fide and ulterior motive would not entitle the petitioner to invoke the Constitutional jurisdiction of this Court. In support of this contention, he placed reliance on the case of The State v. Sultan, reported in 1992 SCM R 2034.
9. ' We have considered the respective arguments advanced by the learned counsel for the parties on merits as well as relating to the maintainability of this Constitutional petition. From the material on record it is to be observed that in finalizing the assessment under section 62 read with section 132 of the Income Tax Ordinance the petitioner had not produced all the requisites certificates, documents and details relating to the installation of machinery and import/purchase of the import machinery for the B.M.R. Which he was required to produce in view of the provisions of section 107(8) of the Ordinance and Rule 48(1)(a)(b) and (c) of the Income Tax Rules before the Assessing Officer at the time of assessm ent. From perusal of the show-cause notices issued by the respondent No,3 Annexures I and K to the petition, it transpires that the petitioner had undertaken to produce or submit the relevant certificates, documents and details after finalization of the assessm ents but he did not produce or submit the same. Relief of tax credit was provided to the petitioner in anticipation of his producing or submitting the relevant certificates, documents and details as required above. From perusal of the show-cause notice Annexure 'K' it may be noted that respondent No,3 while calling upon the petitioner to comply with the requirements of two previous notices had also questioned the validity of the tax credit allowed in respect of the two assessment years 1991-92 and 1992-93 on the ground that the same was not available withdrawn and that in case the petitioner did not comply with the show-cause notices till 9-6-1997, the respondent No,3 would re-open the assessm ents for both the assessment years. The above factual aspects clearly established that respondent No,3 had desired production of relevant certificates, documents and details relating to the installation, and purchase/import of machinery by way of B.M.R., as well as had sought certain clarifications which had not been supplied during the course of finalization of the assessm ent and in allowing the Tax Credit. This factual position emerges from paras. 9 and 12 of the counter-affidavit filed by respondent No,3. The petitioner was provided ample opportunity to appear before respondent No,3 and produce the relevant certificates, documents and details and to satisfy respondent No,3 that the tax credit allowed to them in the aforesaid two assessment years was proper, in accordance with the provisions of law and no illegality was committed by the concerned Assessing Officer. Instead of taking this course of action, the petitioner has chosen to challenge the impugned notices by way of this petition. In the circumstances narrated above, we find it difficult to agree with Mr. Rehan Hasan Naqvi, that the action of respondent No,3 in issuance of the show-cause notices under section 65 of the Ordinance was not based on some "definite information" as envisaged by section 65 of the Ordinance and was merely on account of change of opinion and as such it could not be said to be arbitrary and illegal.
10. ' In coming to the above conclusion we are mindful of the pronouncements made by the Supreme Court in the cases of (i) Messrs Central Insurance Co. And others v. The Central Board of Revenue, Islamabad and others, reported in (1993 SCM R 1232) and (ii) Fateh Ali v. Province of Balochistan through Secretary, Health and others, (1997 SCM R 1458) wherein the meaning of the term "definite information" has been elaborately defined. The facts and circumstances of this case are absolutely different from the facts and circumstances of the cases which were before the Supreme Court while examining and defining the term "definite information" and we are of the opinion that the said definition of the term "definite information" would not be applicable in view of the facts and circumstances of this case. In both the afore cited cases of (i) Messrs Central Insurance Co. And others v. The Central Board of Revenue, Islamabad and others and (ii) Fateh Ali v. Province of Balochistan through Secretary, Health and others, the question of relief of tax credit under section 107 of the Ordinance was not involved for re-opening an assessment. In a case in which the question of relief of tax credit was in issue, the Assessing Officer or a Successive Assessing Officer could validly issue notice under section 65 of the Ordinance for re-opening the cases and initiation of re-assessm ent proceedings on the basis of the material already available on record on the ground that the same was not properly considered, misinterpreted, misread or ignored by the Assessing Officer or all the requisite condition specified in section 107(5) of the Ordinance were not fulfilled at the time of framing the assessment, or that the assessment was subject to production of the required documents by the assessee subsequently. For taking this view we have relied on the provisions of subsection (5) of section 107 of the Ordinance which authorizes an Assessing Officer to hold that the tax credit originally allowed was wrongly allowed if subsequently it was discovered that any one or more of the conditions specified in this section was or were not fulfilled. Section 107(5) of the Ordinance also authorises the Assessing Officer, notwithstanding anything contained in the Ordinance, to re-compute the tax payable by the assessee for the relevant year. It will be useful to reproduce section 107(5) of the Ordinance, which is as under:--- "(5) Where any credit is allowed under this section and subsequently it is discovered by the Income-tax Officer that any one or more of the conditions specified in this section was or were not fulfilled, as the case may be, the credit originally allowed shall be deemed to have been wrongly allowed and the Income-tax Officer may, notwithstanding anything contained in this Ordinance, re-compute the tax payable by the assessee for the relevant year and the provisions of section 65 shall, so far as may be, apply accordingly, the period of ten years specified in subsection (3) of that section being reckoned from the end of the assessment year relevant to the income year in which the infringement was discovered."
11. A plain reading of section 107(5) of the Income Tax Ordinance is sufficient to hold that if tax credit is found to have been wrongly allowed on scrutiny or examination of the record by the Assessing Officer after the tax credit had been originally allowed to an assessee, the assessment can be reopened under section 65 of the Ordinance, on the basis of the material on record if it is apparent that all the requirements or the conditions specified in section 107 of the Ordinance for allowing the relief of tax credit were not complied with. In such a situation the power of the Assessing Officer in issuing a show-cause notice under section 65 of the Ordinance for re-opening the assessment would not be dependent on the availability of some extraneous or new/fresh material or evidence.
12. From a perusal of section 107(5) it can also be deduced that when non-fulfillment of any of the requirements or conditions specified in section 107 of the Ordinance for allowance of relief of tax credit is brought or comes to the knowledge of the Assessing Officer it is to be deemed as "definite information" on the basis of which assessment can be re-opened under section 65 of the Ordinance. In issuing a show-cause notice and re-opening the assessment under section 65 of the Ordinance in a case wherein relief of tax credit had been wrongly allowed, the provisions of section 107 would have greater force and impact and would govern the re-computation of tax alongwith the provisions of section 65 of the Ordinance. Thus, in the case in hand respondent No,3 was not required to establish the availability of some extraneous, fresh or new material coming into his possession after framing of the assessments for issuing a show-cause notice under section 65 of the Ordinance for re-opening the cases and for framing re-assessments.
13. ' We are also of the view that the issue involves factual controversy and the question as to whether all the requisite material as required by section 107(5) of the Ordinance and Rule 48(1)(a)(b) and
(c) of the Income Tax Rules was produced or submitted by the petitioner so as to be entitled to the relief of tax credit. In this connection we may point out that the petitioner in his petition as well as in the affidavit in rejoinder emphatically averred that all the requisite certificates/documents, etc., were produced and/or submitted by him before the Assessing Officer but the averments to this effect were vehemently controverted by respondent No,3 in the counter-affidavit filed by him. In the counter-affidavit filed by respondent No,3 it has also been averred that the petitioner had produced installation certificate issued by the Assistant Collector, Customs, Sheikhupura, which was not valid for allowing the relief of tax credit on B.M.R. From the material on record it cannot be held whether the petitioner had produced the relevant certificate/documents before the assessm ent was framed. In that case the Assessing Officer would not have any opportunity in probing the issues which have been highlighted by respondent No,3 in para.12 of his counter- affidavit. In the presence of the averments to the above affect the question whether all the requisite documents were filed and all the conditions necessary for allowance of tax credit were complied with prior to framing the assessment or thereafter, would assume great importance as in their absence the Assessing Officer could have decided whether the certificates/documents said to have been produced by the petitioner later on sufficiently established the claim of the petitioner to tax credit. The matter, thus, requires production or recording of evidence to establish the afore stated factual aspect which is not normally undertaken by this Court. On this ground also this Constitution Petition does not merit consideration.
14. ' Upon the above discussion, we have come to the conclusion that the Constitutional petition is misconceived and is not maintainable as the petitioner has ample remedy available to him in case an adverse order is passed on the basis of the impugned show-cause notices. Accordingly, this petition is dismissed with costs together with the miscellaneous application therein.