DECISION /FINDINGS The complainant, an individual, deriving income from the sale of cloth on wholesale basis, has alleged excessive assessm ent of his income by'the Deputy Commissioner of Income-tax and inadequate relief granted by the A.A.C.
2. The Regional Commissioner of Income, Northern Region, Islamabad, in his written reply to the allegations, has submitted "that the assessee, an individual, deriving income from sale of cloth on wholesale basis, filed return for the assessment year 2000-2001 declaring sales at Rs.1,760,000 and net income at Rs.70,000 under Self-Assessment Scheme. As the case did not qualify for acceptance under S.A.S., therefore, assessment was finalized under normal law by estimating sales at Rs.3,000,000 and net income at Rs.150,000. Being aggrieved with assessment order, assessee went in first appeal and the learned A.A.C. Reduced sales to Rs.2,600,000 and net income to Rs.125,000, resulting tax de .And of Rs.6,400. The Department has proposed second appeal before the Honourable. Income-tax Appellate Tribunal which is still pending. Therefore, it is requested that the complaint may be rejected".
3. The fact of filing of appeal 'by the Department before the Income-tax Appellate Tribunal is inconsequential to the instant complaint because it has been filed on 30-8-2001 while the complaint has been received in this office on 24-8-2001. The allegation in the complaint, therefore, is being investigated.
4. Notice under section 10(5) of Establishment of the Office of Federal Tax Ordinance, 2000 is responded by Mr. Karamatullah,. Complainant and Mr. Qurban Hussain, D.C.I.T. Alongwith Special Officer, Circle 23, Rawalpindi on behalf of Revenue Division.
5. It is alleged .By the complainant that both the orders of the Assessing Officer as well as the A.A.C.
Are perverse, arbitrary, unreasonable, unjust and oppressive because neither any basis of the exorbitant estimates is recorded nor the history of the case has been followed nor the assessment of the survey team regarding the sales has been taken into account.
6. The Assessing Officer has estimated sales on the ground that the shop is located at the famous Azad Cloth Market. However, he has ignored the plea of the complaint that the market is known for lack of business because a large number of shops are still vacant. Further, he has overlooked the fact that even the survey team has assessed the gross sales at Rs.2,000,000. The complainant is an old man aged 72 years and suffers from cardiac disorder. He has been availing immunity from audit under Self-Assessm ent Scheme by declaring income higher by the required percentage.
However, due to loss of business for about two Months due to strikes during the year, availing immunity from audit has not been possible for the complainant any more. The relief allowed by the A.A.C. By reducing estimates of sales to Rs.2,600,000 and total income to Rs.125,000 is in sheer disregard of the foregoing facts of the case.
7. Since the arbitrariness of the officers is evident from their decisions, these fall under the term "maladministration" as defined in sub-clause (b) of clause (i) of subsection (3) of section 2 of the Ordinance.
8. It is now recommended that the Regional Commissioner of Income-tax, Northern Region, Islamabad may, on his own motion, call for the records of assessment and appeal proceedings and consider whether foregoing facts warrant withdrawal of appeal instituted befoze the Tribunal.
In case, he concludes that Department's appeal warrants withdrawal, he may also consider to allow further relief as may be found due by him, by invoking his jurisdiction under clause (e) of subsection (5). Read with subsection (1) of section 138 of the Income Tax Ordinance, 1979.
9. Compliance report may be submitted by 30-11-2001.