Law: Income Tax Ordinance, 1979

Section: 66A

ORDER As per Rasheed Ahmad Sheikh, Judicial Member. - Vide this appeal, the assessee-appellant has called in question the order rendered by the IAC dated 29-6-2000 for assessment year 2000-01 whereby he has cancelled the already completed assessment by invoking the provisions of section 66A of the Income Tax Ordinance, 1979. 2. Facts leading for disposal of this appeal are that when the assessment record was summoned and examined by the IAC, he noticed that expenses on account of electricity for the month of June, 2000 have not been claimed in the trading account. As per the record, electricity bills attached with the return of total income were eleven (11) in number which amounted to Rs.27,34,651/-. If the electricity expenses for the month of June were to be taken of Rs.400,000/- considering that months of May, June and July which are peak months of business of Ice Factories, which would mean that less electricity expenses have been claimed in the trading account. From this fact it was concluded that if these expenses were to be adjusted, the result would be reduction in GP rate as well as in the profit. Thus, the assessee's return for the year under appeal did not qualify for acceptance under SAS. Before drawing any adverse inference a show cause notice was issued to the assessee confronting on this factum. As the assesses could not furnish the reply, the IAC resorted to cancel the already completed assessment u/s 59(A) of the Income Tax Ordinance, 1979 holding to be erroneously made and also to be prejudicial to the interest of revenue. This has compelled the assessee-appellant to assail this order in appeal before the Tribunal. 3. Mr. Irfan Aslam Sheikh, advocate the learned counsel for the assessee vehemently argued before us that the IAC's order regarding cancellation of already completed assessment by invoking the provisions of section 66A of the Ordinance Is against the law and contrary to the facts of the case. According to the learned AR the learned IAC has proceeded to declare the assessment framed u/s 59(A) dated 22-3-2001 to be erroneous in so far as the same is prejudicial to the interest of revenue is little Justified as the assessee had…

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