MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---Both the above petitions arise out of same set of facts.
Common relief has been 'sought in both the petitions. With the consent of learned Advocates for the parties both the petitions have been heard together and are disposed of by this common judgment.
2. The brief facts are that the petitioners acquired certain lands on lease for a period of 99 years, in the year 1993 and 1996. According to petitioners when the indentures of leases were executed, the lands in question were in the possession of Pakistan Army, and the possession was not handed over to the petitioners. Major portions of the lands have been utilized by Pakistan Army, to build Askari-IV Complex and a grave-yard.
3. The respondent No.1, Federal Government, promulgated a Tax Amnesty Scheme, 2000, through respondent No.2, Central Board of Revenue, vide Circular No.4, dated 1st March, 2000, directing the alleged tax evaders to declare their undisclosed assets/income in accordance with the basis of valuation provided in the above circular and pay tax thereon at the rate of 10%.. Although the petitioners were not handed over possession of the land taken by them on lease, however, they decided to declare the investment made by them in the above land and to pay tax on it in accordance with the Amnesty Scheme, 2000 (hereafter referred to as the Scheme). According to the petitioners they made the valuation of above lands in accordance with the valuation prescribed for Residential/Commercial property as contained in para.12 of Circular No.4 of the Scheme, which reads as under: "Actual cost of acquisition or value specified for the purpose of stamp duty applicable on 30th June of the relevant income year, whichever is higher."
4. The petitioners declared the value of acquisition which was in .Accordance with the valuation for the purpose of stamp duty and paid tax thereon accordingly. However, the respondent No.5, vide his letter, dated 15-8-2000, informed the petitioners, of his intention to cancel the declaration on the ground that the property was commercial property and had to be valued in accordance, with the relevant collector's table. The petitioners were provided opportunity to substantiate their contention with documentary evidence. The petitioners replied the above show-. Cause notices, explaining their point of view and requesting for the acceptance of declaration filed under the Scheme. The respondent No.5, rejected the explanation vide his letter, dated 22-11-2000 and asked the petitioners to offer any further explanation, further intimating that in the case of failure, the declaration filed under the Scheme shall be rejected under para. 10(4) of Circular No.4 of 2000. The petitioners again submitted explanations which were rejected vide order, dated 30-12-2000, which according to petitioners were received by them on 25-1-2001. The declaration was rejected allegedly after prior approval of the Commissioner of Income Tax, respondent No.4.
5. It is averred in the petitions that up to 31-12-2000, the petitioners did not receive any order of rejection or acceptance of their respective declarations filed under the scheme and therefore, in accordance with para. (c) of Circular No.9 of 2000, dated 31-5-2000, declaration filed by the petitioners should be deemed to have been accepted. It is further contended that para. (c) of Circular No.9 of 2000, was further clarified vide para. 2 of Circular No.1. Of 2001, dated 29-1-2001, wherein it was clarified that the acceptance or rejection letters were to be issued and served before 31-12-2000 and, where such letters have not been issued/served by said date the declaration will be deemed to have been accepted. It is maintained by the petitioners that the order of rejection of their declarations under the scheme received by them on 25-1-2001 are illegal and invalid being barred by limitation.
6. It is further contended in the petitions that, thereafter, the respondent No.5, issued notices under section 56 of the Income Tax Ordinance, 1979, for the assessment years 1994-95 to 2000-2001, calling upon to file income-tax return and further issue notices under section 17 of the Wealth Tax Act, requiring to file Wealth Tax Return for the assessment years 1996-97 to 1999-2000 and further issued notices under section 14(2) of the Wealth Tax Act, for the filing of Wealth Tax Return for the assessm ent years 2000-2001. These notices were issued on 24-1-2001 for compliance by 5-2-2001.
The petitioners sought time but the respondent No.5, initiated assessment proceedings and issued notices under section 61 of the Income Tax Ordinance, 1979 and section 16(2) of the Wealth Tax Act, 1963. On 22-2-2001, the petitioners filed revised declarations under the scheme and informed respondent No.5 that they are filing representation to respondent No.3 and requested to keep the proceedings in abeyance, till the decision of the respondent No.3, while the petitioners were pursuing their representations with the respondents Nos.4 and 5, respondent No.5, rejected the revised declarations and informed that there was no provision for revision of Amnesty Declaration.
The respondent No.5, thereafter issued notices under section 13(1)(aa) for the assessment years 1994-95 and 1996-97 and under section 16(2) and 16(4) of the Wealth Tax Act, for the assessment years 1996-97 to 2000-2001.
7. The petitioners have submitted that finding, no other effective and efficacious remedy, they have invoked the Constitutional jurisdiction of this Court.
8, The petitioners have prayed for the cancellation of orders, rejecting the declaration under the Scheme and for a declaration that the Amnesty Declaration filed by the petitioners should be deemed to have been accepted and thereafter; the respondent No.5, has no jurisdiction to cancel the same. Further relief is sought to restrain the respondents from carrying on any assessment or penal proceedings in respect of the income/assets declared in the amnesty declaration.
9. The respondents in their counter-affidavit, raised plea that the petition is not maintainable and is liable to be dismissed for the 'reasons that the petitioners have not availed the remedy available in the Income Tax Ordinance, 1979 and Wealth Tax Act, 1963. They further contended that the impugned orders under para. 10(4) of the Amnesty Scheme, dated 30-12-2000, were sent to the petitioners through Registered Post on 6-1-2001, but the same were returned unserved with the remarks that the petitioners refused to receive them and thereafter, the orders were served on the petitioners' at their residential address, through Circular Inspector. They have further taken plea that the time limit ending 31-12-2000, pertains to the issuance/service of show cause notice under para. 10(3) of the Amnesty Scheme and not for service' that this position is clarified in C.B.R.'s Circular No.1 of 2001. It is further contended that on 31st May, 2000, C,B.R. Issued another Circular No.9 of 2000, wherein a fresh time limit was provided through para. 2(c). It is pleaded that the C.B.R.
Clarified Circular No.9 of 2000 through Circular No.1 of 2001 to the effect that the cut off date of 31- 12-2000 was in respect of issuance of show-cause notice under para. 10(3) of the Amnesty Scheme.
10. We have heard Mr. Muhammad Athar Saeed, learned counsel for the petitioners and Mr. Muhammad Farid, learned counsel for the respondents. The learned' Advocates for the parties have mainly elaborated the points contained in the Memo. Of petition and the counter-affidavits on behalf of respondents. In short, the contention of learned counsel for the petitioners is that the declarations under the Amnesty Scheme were required to be accepted/rejected, and such orders were required to be served on the declarants, latest by 31-12-2000, failing which the declarations shall be deemed to have been accepted. The consequential contention is that the impugned order of rejection 2f the declarations 'filed by the petitioners under the Amnesty Scheme, which were admittedly served after 31-12-2000, were invalid and of no legal effect, because of acceptance of the declarations under the deeming provisions.
11. The contentions raised on behalf of respondent No.3, are threefold. First, that the rejection orders were passed on 30-12-2000 and therefore, the orders are within the period of limitation provided in the Amnesty Scheme. Secondly, the period of limitation is for passing the order and the service of order on a declarant at any time after 31-12-2000 is inconsequential. Thirdly, the, period of limitation provided is in respect of show-cause-notice under para. 10(3) of the Amnesty Scheme and it is admitted position that the respondent No.5, had issued the show-cause notice and the explanation was also furnished before 31-12-2000 and the period of limitation does not pertain to the order of rejection/acceptance under para. 10(4) of the Amnesty Scheme. Before embarking to appreciate the contentions raised by the learned advocate for the parties, it would be appropriate to reproduce the relevant provisions in various circulars referred to above by the learned advocates for the parties.
Para. 10 of the Amnesty Scheme, reads as follows:- "10. Finality of proceedings under the Scheme:
(I) All declarations filed under the Scheme shall be subjected to preliminary examination.
(2) Where a declaration in respect of undisclosed income has been properly made and the tax due on such income has been fully paid such declaration shall be accepted by Deputy Commissioner of Income Tax concerned without any further proceedings and the declarant shall be informed accordingly.
(3) Where any deficiency or any mistake in calculation of tax or any other deficiency or mistake is noticed, a show-cause notice with the prior approval of Commissioner of Income-tax, shall be issued and served upon the declarant requiring him to meet the deficiency and explain the mistake or omission within 30 days of the service of the said notice. If the said deficiency or mistake is rectified within the due date the declaration shall be accepted and the declarant should be informed accordingly.
(4) In case the declarant does not respond to the notice issued under para. 10(3) of the Scheme or does not revise the declaration, such declaration shall be rejected with the approval of the Commissioner of Income-tax and the provisions of paras. 7 and 8 of the Scheme shall not apply.
(5) Where it is subsequently discovered that the declaration so made was not true and correct or the particulars of income or assets were inaccurate, the acceptance of such declaration shall be cancelled with prior approval of Commissioner of Income Tax/Wealth Tax concerned provided that no such order of cancellation shall be made without giving an opportunity of being heard to the declarant. However, no order of cancellation shall be made after the 30th day of June, 2005.
(6) Where the declarant claims depreciation allowance in respect of Plant and Machinery for any assessm ent year prior to the assessme nt year commencing on or before the 1st day of July, 2000, his declaration for the relevant assessment year shall be cancelled by the D.C.I.T. With the prior approval of the CIT. And all provisions of the Income Tax Ordinance, 1979 or Wealth Tax Act, 1963 shall apply accordingly."
12. Circular No.9 of 2000, dated 21st May, 2000, inter alia, contains that the Board has received certain representations in respect of the various provisions contained in Tax Amnesty Scheme, 2000, including a demand that time limit should be prescribed for acceptance of the declaration.
In response to the said demand, the Board decided as follows:-- "(c) the acceptance or rejection letters as provided in para. 10 of Circular No.4 of 2000, dated 1-3- 2000, shall be issued latest by 21-12-2000. In case the declarant does not receive notice under para. 10(3) of the aforementioned Circular, by 31-12-2000, his declaration shall be deemed to have been accepted under para. 10(2) thereof."
13. The C.B.R. Respondent No.2, issued a Circular No.1 of 2001, dated 29-1-2001 under the following caption:--- "Subject: Tax Amnesty Scheme, 2000.---Acceptance/rejection of Declaration Clarification regarding."
In this Circular Board clarified as follows:- "Finality of proceedings.
(2) Acceptance or rejection letters in terms of the provisions of para. 2(c) of Circular No.9 of 2000, dated 31-5-2000 were to be issued and served on or before 31-12-2000. Where such letters have not been issued/served by said date, declarations will be deemed to have been accepted. Where a notice was served by 31-12-2000, the declarant shall be given 30 days' time under para. 10(3) of Circular No.4 of 2000 to make compliance.
Deficiency/mistake.
(3) In case of the declarations where any deficiency or mistake in terms of the provisions of para. 10(3) of C.B.R.'s Circular No.4, dated 1-3-2000 is found, such declarations are allowed to be revised, provided that tax @ 10% alongwith additional tax @ 1.5% per month starting from July, 2000 is paid.
In case the payment of tax/additional tax is not made up to extended date i.e. 31-3-2001, the declaration shall be cancelled with the approval of C.I.T. As envisaged in aforesaid circular.
Service of show-cause notice.
(4) Where a declarant challenges the validity of service of a notice under para. 10(3) of Circular No.4 of 2000, the C.I.T. Shall examine the evidence on merit and decide the case judiciously.
14. Before we dilate on the above provisions, we would like to dispose of the objection on the point of maintainability of the petitions. The respondent took objection to the maintainability of the petitions on the ground that the impugned orders of respondent No.5, are open to appeal under section 129 of the Income Tax Ordinance, 1979. However, on perusal of section 129 of the Income Tax Ordinance, 1979, we find that there is no force in the contention. It is, specifically provided in section 129 that if an assessee objects to an order made by the Deputy Commissioner under sections 59 or 54-A, 62, 63,65,68,75,80, 80-A, 91, 98, 99, 105 to 112,
114. Subsection (2) of sections 148, 52, 78 or under section 158, may appeal to the Appellate Additional Commissioner against such order. Amnesty Scheme has been framed under section 59-D of the Income Tax Ordinance, 1979 and the impugned A orders have been made under para. 10(4) of the Amnesty Scheme. No appeal is provided against such orders and therefore, the objection is overruled and it is held that the petitions are maintainable.
15. Now, we come to the question under consideration, , which pertains to the point of limitation for acceptance/rejection of the declaration. The Amnesty Scheme is contained in Circular No.4 of 2000, dated 1-3-2000. After issuance of this Scheme under section 59-D of the Income Tax Ordinance, C.B.R., has issued several circulars amending/adding/clarifying various provisions by Circular No.8 of 2000, dated 27-4-2000. Sub-para. (5) of para. 10 of the Scheme was omitted. An amendment was made in para. 11 also, whereby the words "or its acceptance is cancelled" were omitted. The learned advocates for the parties have referred to some of the circulars, but we, feel that the other circular issued by the C.B.R., in respect of Amnesty Scheme are also relevant. Circular No.9 of 2000 was issued on 31-5-2000, whereby on the demands in the representations a time limit for acceptance/rejection of declaration was provided and the time limit was prescribed in para.
(c) which has already been reproduced in earlier part of this judgment. Again a C.B.R. Circular which is No.10 of 200 was issued on 6-6-2000, whereby several instructions were added to t.
Original Scheme. Instructions were issued vide, C.B.R., letter, dated 3 5-2000 as well as through C.B.R., Circular No.12 of 2000, dated 15-6-2000, Circular No.13 of 2000, dated 27-6-2000 and Circular No.14 of 2000, dated 27-6-2000 prior to the above circulars, the C.B.R. Issued Circular No.6 of 2000, on 28-3-2000 wherein various points in the scheme were explained and guidelines were given to the tax officials. In para. 5 of the Circular No. 6 of 2000, it was instructed that, the Assessing Officer concerned will make a preliminary examination of 'all declarations to check mistakes/deficiencies, if any. If any mistake ih calculation of tax or any other deficiency is noticed, by DCIT, he will issue a show-cause notice on that point, with the prior approval of Commissioner of Income Tax, to ,the declarant requiring him to meet the deficiency and explain his position within 30 days of the service of the said notice. Examples of the mistakes/deficiencies were also given for the purpose of illustation which are as follows:--- . "(i) As per declared undisclosed income, the tax payable comes to Rs.20,000 but due to oversight or any other reason it has been recorded Rs.2,000 (but paid Rs.20,000). In such a case, only intimation will be given to the declarant, and if there is no other deficiency in the declaration, it will be accepted accordingly.
(ii) The covered area of an immovable property recorded in the relevant column of Part II of Declaration Form is 3500 sq. Ft. Its valuation as per paragraph 12 of the Scheme comes to Rs.10,50,000 and tax thereon Rs.1,5,000. But either the. Valuation has not been correctly done of tax is not correctly worked out.
(iii) Size of property 'X' is 500 sq. Yards. The rate for the purpose of stamp diuty on 30th day of the relevant year of acquisition was Rs.250 per sq. Ft. But the rate applied by the declarant is less than the applicable rate.
(vi) Other deficiencies, such as leaving blank any column of the Declaration Form, not recording make a type or registration number of vehicles in the relevant column, or omission of description of property or location or identification number of property."
16. It was further instructed that if the mistake or deficiencies as pointed out in the show-cause notice were found to be correct, the declarant shall to file a revised declaration correcting the mistakes or deficiencies.
17. Para. 11 of the Amnesty Scheme as amended by Circular 8 of 2000 is also required to be considered in order to have a complete picture of the various provisions of the Scheme contained in various circulars issued by the C.B.R., from time to time. Para. 11 of the Amnesty Scheme is as follows:4- "11.. Conse uences of-filin not untrue or incorrect declaration.
Where a declaration is rejected in accordance with the provisions of para. 10 of the Scheme, the immunity granted under para. 8 of the Scheme shall cease to exist and all the provisions of Income I Tax Ordinance, 1979, and Wealth Tax Act, 1963, shall apply accordingly."
18. Before giving our finding on the point under consideration, it would he appropriate to state that the established principle of interpretation of statutes is that no provision of law contained in .a statute is to be considered in isolation, until and unless any section/provision is a complete code in itself and any Scheme contained in statute or subordinate legislation, is to be considered in the totality of the Scheme. Thus, adhering to this principle, we will consider all the relevant provisions in the Scheme together in their totality.
19. So far, the original Scheme contained in Circular No.4 of 2000 is concerned, no period of limitation was provided for acceptance/rejection of the declarations. In para. 2 of the Scheme, meaning of the 'undisclosed income for the purpose of Scheme was given and no other definitions or meanings were given in the Scheme. The scope and the meaning of expression "deficiency" or "mistake" were also not given in the original Scheme. Due to this and various other deficiencies and ambiguities in the Amnesty Scheme, the quarries started pouring in and consequently a chain of circulars amending/modifying/ clarifying the Amnesty Scheme ensued. In Circular No.6 of 2000, dated 28-3-2000, it was clarified that the D C.I.T. Will issue a show-cause notice to the declarant in respect of any mistakes/deficiencies notice by him and examples of the mistakes/deficiencies were also given for illustration purpose. Again through Circular No.9 of 2000 issued on 31-5-2000, in addition to various clarifications a time limit was prescribed for acceptance of the declaration and the main reliance a the petitioner in the present petition is on para. (c) of this Circular which states that, the acceptance or rejection letters as provided in para. 10 of Circular No.4 of 2000, shall be issued latest by 31-12-2000. It I further stated in the said para. That, in case the declarant does not recive notice under para. 10(3) of the aforementioned circular by 31-12 :000, his declaration shall be deemed to have been accepted under para. 10(2) thereof.
20. At this stage, we will revert to para. 10 of the Amnesty Scheme. It is provided in sub-para. (1) that all the declaration shall be subjected to preliminary examination. According to para. 2, where a declaration has been properly made and the tax due on such income has been fully paid , such declaration shall be accepted by the concerned without any further proceedings and the declarant shall be informed accordingly. Under sub-para. (3), where any deficiency or mistake in calculation of tax or any other deficiency/mistake is noticed, a show-cause notice is required to be issued to the declarant with ',nor approval of the Commissioner Income Tax, requiring- him to meet the deficiency and explain the mistake or omission within 30 days of the service of the said notice.
It is further provided that, if the said deficiency or mistake is rectified within due date, the declaration should be accepted and the declarant should be informed accordingly. According to sub-para. (4), in case the declarant does not respond to the notice issued under para. 10(3) of the Scheme or does not revise the declaration, such declaration should be rejected with the approval of Commissioner of Income Tax. Now all sub-paragraphs (2), (3) and (4) are directed towards the single object i.e., acceptance/rejection of the declaration and therefore, in accordance with the established principles of the interpretation of statutes, they are to be read together in the context of para. (c) of Circular No.9 of 2000. More particularly because this para. Speaks of acceptance or rejection letter as provided in para. 10 of Circular No.4 of 2000 and provides that, such letters shall be issued latest by 31-12-2000. Thereafter, it provides that, in case the declarant does not receive notice under para. 10(3) of Circular No.10 of 2000, his declaration shall be deemed to have been accepted under para. 10(2) thereof. A very careful reading of the contents of para. (c) of Circular No.9 of 2000, shows that it has taken care of the issuance, of the acceptance or rejection letters referred to in sub-paragraphs (2), (3) and (4) of para. 10 of the Scheme as well as receiving of show-cause notice under para. 10(3) of the Scheme. It is pertinent to note that in para. (c) of.
Circular No.9 of 2000, in the first sentence, the expression used is "acceptance or rejection letter" as provided in para. 10 of Circular No.4 of 2000 and the issuance thereof, latest by 31-12-2000, while in the second sentence it is provided that, in the case the declarant does not- receive "notice" under para. 10(3) of the aforementioned circular, his declaration shall be deemed to have been accepted under para. 10(2) thereof. The learned counsel for the department/respondent while taking plea that the period of limitation provided in para. 2(c) of the Circular No.9 of 2000, is confined and restricted to the issuance of show-cause notice under para. 10(3) of the Amnesty Scheme, has ignored that in the said para. Issuance of the acceptance or rejection letters have been dealt with separately than the receiving of show-cause notice by the declarant, under para. 10(3) of the said circular. In the first part of para. (c) of Circular 9 of 2000, in addition to the subject-matter being acceptance or rejection letters word "issued" has been used while in the later part dealing with the subject of issuance of show-cause notice under para. 10(3), the expression used is received. It is to be kept in view that the word "issued" connotes a C performance of duty on the part of the Assessing Officer, while the word "received" envisaged the completion of an act of the issuance of notice by the Assessing Officer, and consequently, the involvement of the Assessing Officer and declarant, both is envisaged. In the first part of para. (c) which deals with the issuance of acceptance and rejection letters, it indicates a unilateral act on the part of the Assessing Officer and the receipt thereof by the declarant on any date subsequent to 31-12-2000, is not material.
However, the period of limitation for issuance of the acceptance or rejection letters and receipt or show-cause notice under pars. 10(3) by the declaration is same, to wit, 31-12-2000. Thus, if either or any of the act is not performed by the cut off date, the deeming provisions shall come into operation. The effect of the provision when read in its totality, is that the show-cause notice under para. 10(3) of the Amnesty Scheme, was required to be received by a declarant latest by 31-12- 2000 and the acceptance or rejection letter was also required to be issued by the said date, meaning thereby that the show-cause notice in respect of mistakes/deficiencies were required to be issued keeping in view the time provided for issuance of acceptance/ rejection letters which were to be issued latest by 31-12-2000.
'
21. Here a question arises, whether it was possible to pass the final order for rejection/acceptance of the declaration, in case there was any mistake/deficiency and a show-cause notice was issued to a declarant under para. 10(3) of the Amnesty Scheme. A perusal of the Scheme shows that, initially the last date for filing of declaration was 30-4-2000, which was extended by Circular No.8 of 2000 to 15-6-2000 and it was further extended by a Circular No. 12 of 2000 to 30-6-2000. Thus, in-between the extended last date for filing of declaration and the time limit fixed by Circular No.9 of 2000, i.e. 31-12-2000, there was a period of six months and therefore, sufficient time was available. For rejection/ acceptance of a declaration and issuance letter latest by 31-12-2000.
22. There is another important 'aspect which has attracted our attention. We find, that in this case, the Assessing Officer, respondent. No.5, has issued a show-cause notice on 15-8-2000, in which he called upon the petitioners to reply the query in respect of the status of the land and the valuation thereof on the basis of information which was acquired by him from the Deputy Commissioner of Karachi East. It was stated in the show-cause notice that the declaration was examined in the light of Rule 12 (wrongly quoted as rule, which is in fact para. (12) of the Amnesty Scheme) and ultimately confronted the petitioner with his intention to place the plot in the category of commercial property for the purpose of valuation and to calculate the tax accordingly. This exercise was described as deficiency in tax calculation. In the impugned order, dated 30-12-2000, which is spread over' 12 pages, a very detailed discussion was made as if it was an assessment order under section 62 an addition was intended to be made under section 13 of the Income Tax Ordinance. In doing so, he examined the record of rights maintained`by the K.D.A. And Deputy Commissioner, Karachi East, and observed that on examination of the record of rights, it .Was patently clear that the assessee has furnished wrong particulars of land shown in the declaration.
He also observed that valuation of land declared was not in accordance with the valuation rate provided in para. 12 of the Scheme, which envisaged that value of plot/open land shall be adopted as actual cost of acquisition or value specified for the purposes of stamp duty applicable on 30th June of the relevant income year. He thereafter, assigned a valuation to the declared land at commercial rates and after deducting the declared value came to the conclusion that the declared value was less by Rs.3,76,35,120. He has thereafter, observed in the impugned order that, "Both the above discrepancies i.e. Misdeclaration of land as an agricultural land instead of urban commercial land, and the under valuation of the said land were confronted to the assessee vide show-cause notice under para. 10(3) of the C.B.R.'s Circular No.4 of 2000, issued on 15-8-2000".
23. The order further contains that the explanations furnished by the petitioner were examined in the light of material facts available on record and found unsatisfactory. The, petitioners were again called upon to make compliance. The second letter issued by the respondent No.5, to the petitioners contains that a misdeclaration has been made inasmuch as a purely commercial land has been declared as agricultural land and this misdeclaration of facts tantamount to 'inaccurate particulars' which itself renders the declaration.As defective liable to be rejected, vide .Para. 10(4) of Circular No.4 of the Amnesty Scheme. The second explanation, furnished by the petitioners was on the same line as on the first one. The Assessing Officer, after a very lengthy discussion came to the conclusion that the assessee (petitioner) has furnished wrong information. The respondent No.5, ultimately held that all the contentions raised by the petitioner were frivolous and without substance and that the urban commercial land was declared as agricultural land and consequently the declaration filed by the petitioner was defective and liable to rejection vide para. 10(4) of C.B.R.'s Circular No.4 of 2000 and thus it was rejected accordingly with the prior approval of Commissioner 'of Income Tax Zone, Karachi East, vide letter, dated 30-12-2000.
24. The point for consideration is whether an Assessing Officer, while acting under the Amnesty Scheme was empowered under any provision of the Scheme to enter into full-fledged exercise of inquiry/investigation/proceeding and to pass an order which partakes to an assessment order under the Income Tax or Wealth Tax laws, as if an addition was being made under section 13 of the Income Tax Ordinance, 1979. When we revert to the Amnesty Scheme and all the subsequent clarifications and Circulars issued by the C.B.R., which also form part of the said Scheme, we find that in para. 8 of the Amnesty Scheme, it is provided that where a person has paid tax on his undisclosed income in accordance with the Scheme, he shall not be liable to any further tax, charge, levy, penalty or prosecution in respect of such income under the Income Tax Ordinance, 1979 and that the undisclosed assets, declared in accordance with the Scheme and on which tax has been paid would be exempt from wealth tax under the Wealth Tax Act, 1963, for any assessm ent year commencing on or before the first day of July, 1999, and for five assessment years next following. A procedure has been prescribed in Circulars Nos.4 and 6 of 2000 to the effect that the Assessing Officer concerned will make a preliminary examination of all mistakes/deficiencies. If any deficiency or mistake in calculation of tax or any other deficiency or mistake is noticed by D.C.I.T., he will issue a show-cause notice to the declarant, on that point requiring him to meet the deficiency and explain the mistake within 30 days of the service of notice.
Examples of the mistakes/deficiencies were also given in the said circular for illustration purposes.
The illustrations have also been produced in earlier part of this judgment and therefore, they are not required to be repeated. A perusal of the illustrations shows that the mistakes/deficiencies envisaged under the Scheme, do not cover any case of misdeclaration/and has no where empowered the Assessing Officer, to sit in judgment by resort to a full-fledged exercise of assessm ent proceedings as if exercising powers under section 62 of the Income Tax Ordinance. All the illustrations wherein examples of the mistakes/ deficiencies are given are in consonance with the procedure of preliminary examination only and pertain to such act which can be termed a mistake/deficiency. It requires no lengthy arguments to say that a mistake and a deliberate act on the part of a person cannot be equated. The mistakes are always inadvertent and unintentional while any misdeclaration is a deliberate act and denotes the intention on the part of the declarant.
The language used in para. 10(3) of the Amnesty Scheme is also very clear that where any deficiency or any mistake in calculation of tax or any other deficiency or mistake is noticed a show-cause notice with the prior approval of Commissioner of Income Tax, shall be issued and served upon the declarant requiring him to meet the deficiency and explain the mistake within 30 days of the service of the notice. If the said deficiency or mistake is rectified within the due date the declaration shall be accepted and the declarant shall be informed accordingly. Para. 10(4) should also be read with this provision, which provides that in case the declarant does not respond to the notice issued under para. 10(3) of the Scheme or does not revise the declaration, such declaration shall be rejected with the approval of the Commissioner of Income Tax and the provisions of paras.
7 and 8 of the Scheme shall not apply.
25. Here the golden principle of interpretation of statutes comes into picture that where the language of any statute or legal document is clear, D it has to be acted upon accordingly. We find, that in para. 10(3) it is clearly stated that where any deficiency or mistake in calculation of tax or any other deficiency or mistake is noticed, a show-cause notice shall be issued to the declarant. It is to be read with para. 10(1) of the Amnesty Scheme which says that all the declaration filed under the scheme shall be subjected to preliminary examination. When the provisions contained in para. 10(1) and para. 10(3) are read together, it leaves no scintilla of doubt that the Assessing Officer, processing a declaration under the Amnesty Scheme was empowered to make a preliminary examination only and to intimate the declarant about any mistake/deficiency on such preliminary examination only. The Amnesty Scheme has no where empowered the Assessing Officer, to start a full-fledged assessm ent proceedings, collecting the information from various departments as well 'as from the Assessing Officer, having jurisdiction over the declarant and then embark on making full-fledged assessm ent order by substituting the declaration with his own findings and .Valuation.
For this reason, it was provided in the original .Amnesty Scheme, in para. 10(5) that where it is subsequently discovered that the declaration so made was not true or correct or the particulars of income or assets were incorrect, the acceptance of such declaration shall be cancelled with prior approval of Commissioner of Income Tax/Wealth Tax concerned but no such order of cancellation shall be made without giving an opportunity of being heard to the declarant. However, no order of cancellation shall be made after the 30-6-2005. In pap. 11 of the Amnesty Scheme, the consequences of filing of untrue or incorrect declaration is provided which says that where a declaration is rejected or its acceptance is cancelled in accordance with the provisions of para. 10 of the Scheme, the immunity granted under para. 8 of the Scheme shall be ceased to exist and all the provisions of the Income Tax Ordinance, 1979 and Wealth Tax Act, 1963, shall apply accordingly.
Thus, reading of these two provisions indicate that in the case of misdeclaration and furnishing of incorrect particulars of income or assets could result in subsequent cancellation of the acceptance of declaration and non-availability of immunity under para. 8 of the Scheme. This was also indicative of the fact that during the preliminary examination under the Amnesty Scheme no in-depth . Inquiry/investigation or detailed proceedings were to be taken. However, para. 10(5) and the expression "or its acceptance in cancelled" in para. 11 were omitted by Circular No.8 of 2000.
Now, the question arises that if after omission of original sub-para. (5) of para. 10 of the Amnesty Scheme and the corresponding amendment in para. 11 thereof any incorrect declaration is filed, what consequences shall follow. Although caption of para. 11 of the Amnesty Scheme is consequences of filing untrue or incorrect declaration but the contents of para. Do not deal at all with the consequences of filing of untrue and incorrect declaration. It has merely referred to para. 10 and as already observed the original sub-para. 5 which dealt with the situation was omitted.
However, on querries raised by the assessee, the position was clarified vide C.B.R. Letter, dated 31- 5-2000 and the clarification is to the effect that all declarations made by the declarants under the Tax Amnesty Scheme would be immune to the extent of declaration. Any income/asset coming to the knowledge of the Department subsequently which was in excess of the declaration, the same would be taxed in accordance with the law.
This clarification is in consonance with para. 8 of the original Scheme contained in Circular No.4 of 2000, which provided that where a person has paid tax on his undisclosed income in accordance with the Scheme, he shall not be liable to any further tax, charge, levy, penalty or prosecution in respect of such income under the Income Tax Ordinance, and likewise the assets declared shall be exempt from levy of wealth tax, for any assessment year commencing on or before first day of July, 1999, and on all subsequently assessm ent years.
26. After the above discussion, the position which emerges is that after receiving of a declaration under the Amnesty Scheme, the Assessing Officer, was merely empowered to subject the declaration to preliminary examination and if as a result of preliminary examination of the declaration, any mistake/deficiency is noticed, he shall call upon the declarant to rectify the mistake/deficiency, revise the declaration and if the declarant responds positively the declaration shall be accepted. However, if the declarant does not respond and compliance is not made the declaration would be liable to be rejected. Such acceptance or rejection letter was to be issued latest by 31-12-2000 and in case no such letter was issued by 31-12-2000, the declaration shall be deemed to be accepted under para. 10(2) of the Amnesty Scheme.
27. The preliminary examination of the declaration shall be confined to the contents of declaration only and the Assessing Officer has not been empowered to initiate fishing and roving inquiry or order to start full-fledged assessm ent proceedings, as in the case of normal assessment, for the purpose of making addition under section 13 of the Income Tax Ordinance, 1979. The income assets declared shall enjoy immunity under para . 8 of the Amnesty Scheme and if subsequently the Department receives any definite information or it is discovered that any income/assets was not declared even in the declaration under the Amnesty Scheme, such income/assets shall enjoy no immunity under the Amnesty Scheme and shall be taxed in accordance with the Income Tax/Wealth Tax Law.
28. One more question is left to be considered. The learned counsel for the respondent has produced Circular No.1 of 2001, which provides that acceptance or rejection letters in terms of the provisions of para. (c) of Circular No.9 of 2000, dated 31-5-2000 were to be issued and served on or before 31-12-2000. Where such letters have not been issued/served by said date, declaration will be deemed to have been accepted. Where a notice was served by 31-12-2000, the declarant shall be given 30 days' time under para. 10(3) of Circular No.4 of 2000, to make compliance. It is further provided in Circular *No.1 of 2001, that where notices for removal of deficiencies have already been issued the declaration may be allowed to be revised by 31-3-2001. It shall also be applicable to the cases where rejection has already been made on this score. On compliance by aforesaid such letters shall be withdrawn.
29. The above clarification has merely extended the period for acceptance of the declaration where compliance was not made by the declarants and who were desirous of making compliance and were seeking acceptance of their declarations. It shall have no bearing on the cases where a declarant was not seeking any extension of time for making compliance.
30. In the present case, it is admitted position that the letter of rejection was sent for the first time by post on 6-1-2001 and on non-service of the letter by post, it was sent to the petitioners through the process server. Thus the rejection letter was not issued by 31-12-2000, therefore, it is, held that the declarations were deemed to be accepted.
31. For the foregoing reasons, the petitions are allowed and it is declared that the orders of cancellation issued by the respondent No.5, after 31-12-2000 are' of no consequences and are hereby declared to be nullity in law. It is further declared that the Amnesty Declaration filed by the petitioners have been deemed to be accepted and the respondent No.5, had no jurisdiction to cancel the deemed accepted, declarations. The respondents are restrained from carrying on any assessm ent or penal proceedings in respect of the income/assets declared in the Amnesty Declaration. However, it is clarified that the income/value of the assets not declared by the petitioners enjoy no immunity under para. 8 of the Amnesty Scheme and if the respondents have any definite information and have discovered any fact authorizing them to initiate any proceeding in accordance with the law, under the Income Tax Ordinance/Wealth Tax Act, respondents shall be at liberty to initiate such proceedings but r strictly in accordance with the law.
The petitions are allowed as above with no order as to costs. .