Law: Income Tax Ordinance, 2001

Section: 221,122(5A)

Law: Income Tax Ordinance, 1979

Section: 62,80-D,156

Law: Constitution of Pakistan, 1973

Section: 4

Income Tax Ordinance (XLIX of 2001)---Ss.221 122(5A)--Income Tax Ordinance (XXXI of 1979) [since repealed], Ss.62, 80-D, 156 Third Sched., R.5--Constitution of Pakistan, Art. 4--Assessment order--Rectification--Change of opinion--Scope--Taxation Officer, powers of--Scope--Initial depreciation allowable on building and plant and machinery installed by 30th June, 2002--Original assessment was finalized on 28-09-2002 and further proceeded under Ss. 156 80D of Income Tax Ordinance, 1979--Earlier two notices under S.122(5A) of Income Tax Ordinance, 2001, (1TO, 2001) having been issued in the year 2003 were still pending, another notice under S.221 of the ITO, 2001 was served upon the applicant (Refinery Company) alleging that initial depreciation on buildings and plant machinery was incorrectly allowed--Appellate Tribunal treated notice under S.221 of ITO, 2001 as valid one--Applicant assailed order of the Tribunal contending that the impugned order amounted to “change of opinion” from assessment order passed in the year 2002, which could not be passed during pendency /disposal of two notices already issued under S.122(5A) of the ITO, 2001--Validity--Record revealed that initial depreciation was never claimed by the applicant/company , rather First Year Allowance @ 80% of the “capitalized assets” was claimed--Taxation officer allowed initial depreciation under R.5(l)(cc) of the Third Schedule of the Income Tax Ordinance, 1979, which provision was not relevant to the facts of the present case, because the same prescribed 40% depreciation allowance to machinery or plant given on lease by a Scheduled Bank, a Financial Institution or Modarba or leasing company duly approved by the FBR--Case of applicant/company for allowing initial depreciation being against the said provision of law, compelled the Taxation Officer to rectify the order in exercise of power under S.221 of the ITO, 2001--Incorrect statement of law was always open to rectification and penitence--Taxation Officer was empowered to rectify assessment order under S. 221 of ITO, 2001and rectification of the Assessment Order under S.221 of ITO, 2001, could be applied retrospectively--Expression “mistake apparent…

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