Law: Income Tax Ordinance, 1979

Section: 66A,59

Income Tax Ordinance (XXXI of 1979)----Ss.. 66-A & 59---Power of I.A.C. to revise I.T.O.'s order ---Self-Assessment Scheme, 1988-89, para. 4 (ii) ---Assessee got factory on lease--¬Assessee's case was selected for total audit under para. 4 (ii) of Self¬-Assessment Scheme, 1988-89---I.A.C. considering the assessment a. erroneous and lease arrangement being fictitious, cancelled the assessment under the provisions of S.66-A of the Ordinance---Validity---Held, leave was made in the assessment year 1988-89 and the arrangement stood accepted by the department in the earlier two years---No reason was recorded to declare said order under S.66-A to be a legal order---Order of Assessing Officer was ordered to be restored while the order under S.66-A stood cancelled in circumstances. I.T.A. No.8001/LB of 1991-92 and I.T.A. No.2125/LB of 1992-93 ref. ORDER KHAWAJA FAROOQ SAEED (JUDICIAL MEMBER).---The appeal in this case has been filed by the assessee contesting cancellation of the order under section 66-A. 2. The brief facts of the case are that the assessee obtained factory named M/s. Al-Imran Textile and Processing Mills (Pvt.) Ltd., Jhumra Road, Faisalabad on lease during the assessment year 1988-89 and his income therefrom continued to be assessed by the department. The return declared by the assessee during the year was selected under para. 4(ii) of the Self-Assessment Scheme for total audit. and the income therefrom was assessed at Rs.2,50,000 as against declared by the assessee as Rs.58,799. The I.A.C. considered this assessment to be erroneous and cancelled the same under provisions of section 66-A by observing that the lease arrangement was fictitious. Without going into…

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