Law: Income Tax Ordinance, 1979

Section: 66A,2(h)

(a) Income Tax Ordinance (XXXI of 1979)-----S. 66-A---Scope---Powers of Inspecting Assistant Commissioner under S.66-A---Extent---Inspecting Assistant Commissioner has no power to invoke S:66-A in those cases where assessment is made on agreement arrived at between the Income Tax Officer and assessee. 1988 PTD (Trib.) 222; 1988 PTD (Trib.) 965; PLD 1971 Kar. 305 and Qamaruzzaman and another v. State PLD 1981 Lah. 543 ref. Nasim Sikandar, Judicial Member (Contra). (b) Income Tax Ordinance (XXXI of 1979)--¬ ----S.66-A---History of S.66-A traced. (c) Income Tax Ordinance (XXXI of 1979)--- ----Chap. VII---Agreed assessment, position at law---Practice of passing agreed assessment; acknowledged by Income-tax Authorities---Agreed assessment is not contemplated under any provision of the Ordinance or the Rules made -thereunder---Practice of passing agreed assessment orders is in vogue since long---Such practice was never objected to by superior Revenue Authorities or by Income Tax Appellate Tribunal---Instructions on the other hand had been issued by Central Board of Revenue from time to time providing guidelines to Income Tax Authorities to regulate agreed assessments. (d) Income Tax Ordinance (XXXI of 1979)--- ----Chap. VII---Contract Act (IX of 1872), S.2(h)---Agreed assessment---Legal sanction---No provision exists in the Income Tax Ordinance, 1979 or Rules framed thereunder permitting agreed assessment---Legislative authority for levy of tax under an agreed assessment, however, comes from the Contract Act under which a valid and binding contract can be executed from which legal consequences would flow. ORDER NASIM SIKANDAR (JUDICIAL MEMBER). J.---By way of this order, we propose to dispose of the following question: -- "Whether an IAC has power to invoke section 66-A in those cases where assessment is made on agreement arrived at between the ITO and the assessee? ....." 2. The facts of the case, though not very relevant for answering of the aforesaid question, are nevertheless, narrated in order to understand the background of the issue. 3. The present appellant, an unregistered firm, deriving income from installation and erection of projects as before, filed a…

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