Law: Income Tax Ordinance, 1979

Section: 32A,62,62(1),136

Income Tax Ordinance (XXXI of 1979)--- ---Ss.32-A, 62(1) & 136---High Court Appeal---Certificate of Chartered Accountant---Scope---Distinction between falsity of accounts and method of accounting---Commissioner Income Tax assailed orders of the Income Tax Appellate Tribunal whereby assessee's appeal was allowed and it was ordered that the assessee's declared trade results be accepted---Contention of the Department was that in presence of a qualified certificate by auditor / Chartered Accountant of the assessee, and the qualification being that that they had not carried out valuation of stock and stores and verification of markup payable or examined the bills payable by verification; provided justification for rejection of trading accounts of the assessee in terms of S. 32A of the Income Tax Ordinance, 1979---Validity-In interpretation of provisions of S. 32A of the Ordinance, there was a distinction between method of accounting and falsity of accounts---Method of accounting could not be questioned in view of the fact that the Chartered Accountant of the assessee audited the accounts and certified that the balance sheet profit and loss accounts together with the notice forming part thereof, gave a true and fair view of the affairs of the assessee company and thus it could not be suggested that the method of accounting was such that income could not be deduced therefrom---Said certificate given by the Chartered Accountants was not false and no material or evidence to that effect was gathered or relied upon by the Assessing Officer or confronted to the assessee---Assessing Officer did not issue notice to assessee under S. 62(1) of the Ordinance which was a mandatory obligation and proceeded to reject the books of accounts without recording any cogent or legally sustainable reasons---Ground that the said certificate was qualified, did not furnish sufficient reason to reject the accounts altogether in absence of cogent and plausible reasons to do so---Appeal was dismissed. CIT v. Krudd Sons Ltd. 1994 PTD 174; Collector, Sahiwal v. Muhammad Akhtar 1971 SCMR 681 and Messrs Pimpa (Pvt.) Ltd., Karachi v. CIT Companies-I, Karachi 1994 PTD 123 rel. JUDGMENT IJAZ UL…

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