1. ORDER KHAWAJA FAROOQ SAEED, JUDICIAL MEMBER. - Cancellation of order under Section 66A is challenged. The A.R. While challenging the order pointed out that the proceedings were initiated on the basis of three objections. One regarding electricity was later dropped and the order was cancelled on the basis of remaining two. He narrates the facts regarding all the issues and said that the excessive cause of electricity during the year was satisfactorily explained and accepted by the IAC. He further said the other two are regarding non- deduction of tax under Section 24(c) on the rent and commission paid amounting to Rs. 150,000/- and Rs.48,000/- respectively. The AR said that the departmental objection regarding more consumption of electricity in proportionate to the previous year does not make an order as erroneous. Notwithstanding the above arguments he remarked the assesses had satisfactorily explained his position in the following manner:- "The company deals with Broiler Breeders, Grand Parents are imported by a few multinational and local companies like Lohman, Hubbard, Arboraceous, Sparrow, and Highline etc., which produce Grand Parents. M/S. Famous Poultry Breeders (Pvt.) Ltd., purchases Grand Parents and nourishes them in the poultry farms. Eggs laid by these parents are first of all sorted out. Fertile eggs are separated. Non fertile eggs which are usually 2 to-3% are sold in the market whereas fertile eggs are stored, at a constant temperature which is about 100 F. Required is taken out of the store and set in the setter. These setters are then put into the hatchery where constant degree of 170 F is maintained for 17 to 18 days. Constant verification is provided to the hatcher alongwith light and eggs go on tilting throughout. Meaning thereby thai expenditure on running a hatcher would be constant. Moreover hatcher Js used to full capacity because required number of eggs are taken to the hatcher through setter. These setters are put into incubators where they remain for three days, In the incubator also a constant temperature is maintained. Chicks taken out of the incubator are then cleaned and are sent to the market after packing."
2. Regarding two other objections he said that the assessee pays rent in October every year. During the impugned year on 15.10.1995 the rent was paid and tax @ 5% was deducted and paid. Similarly, the assessee made payment of the balance rent from October and onwards upto September, 1996 on 7.10.1996 on which account tax was deducted and paid in the Government Treasury. He produced before us the proof of payment.
3. Regarding payment of commission the AR said that the same has been paid to a regular tax payee and the department has been provided the proof of the same in terms of his assessment order.
4. The name of the said recipient is Mr. Ahmad Bilal and he has. Declareo commission amounting to Rs. 140,695/- which includes the commission paid by the assessee company. The name of said Mr. Ahmad Bilal, amount of commission paid to him, his NTN and address has also been produced to the Assessing Officer at the time of original assessment and to the IAC during the proceedings under Section 66-A. The copy of the same has been produced before this Bench also. The AR produced before us judgment reported as (1997) 95-TAX-75 (Trib.) to say that mere disagreement between the officers on result of assessment, quality of assessment comments that better effort could have resulted in better assessment, has no relevance to the jurisdiction available to an IAC under Section 66A. It can only be invoked where an order is erroneous as well as prejudicial to the interest of revenue. An order by no means can be called as erroneous by saying that electricity consumed during the year was more in proportionate to the earlier years. This is not an error. This is just an opinion, which can easily be substituted by another. There may be some adverse circumstances in which even more consumption may result in reverse position while with lesser consumption sometime the assessee can have better results. This however, in any case, are just estimates, mere suppositions and intellectual debates. Such estimates or ideas cannot be made base for invocation of the jurisdiction under Section 66A. This Tribunal has in a chain of cases decided the issue regarding the word erroneous' as used in Section 66A and prejudicial to the interest of revenue. Nowhere such a situation has ever been supported either by the ITAT or the other superior Courts of the country. The- judgment referred by assessee's AR is after reliance upon a judgment of A.J.K. High Court reported as (1984) 49 Tax 34 (H.G.A.J.K.), which is a landmark of its time and subsequently a lot of development has been made by the other judicial forums. No- where the Higher Courts have ever supported cancellation of an order on such suppositions and ideas. Error be that of fact or of law by no means can be stretched to include that with more utilization of electricity the assessee income had increased.
5. Regarding application of 24(c), the assessee has deducted and paid tax in respect of rent while the commission has been paid to a person who has paid tax there or. These two . Objections also were not relevant for cancellation of the order, In this regard, we rely upon the langue of Section 24(c) as well as the judgment of this Tribunal reported as 1999-PTD-2172 wherein this issue has been dilated upon in detail. The result is obvious. The order of the IAC by no means can be considered as a, correct appreciation of the jurisdiction under Section 66A. The cancellation of the order is disapproved .And the order of the ITO is hereby restored. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.