Law: Income Tax Ordinance, 1979

Section: 62,62(1)

Income Tax Ordinance (XXXI of 1979)-----S.62(1), proviso---C.B.R. Circular No.11 of 1993, dated 7-7-1993, para. 8---Notice---Assessing Officer while completing assessment made addition in trading and profit and loss account without giving notice to the assessee to explain his point of view about the defects in the accounts presented---Validity---Assessing Officer in terms of proviso to subsection (1) of S.62, Income Tax Ordinance, 1979, which was mandatory, should have confronted the assessee with the defects found in the books of accounts---Assessing Officer having failed to do so, had no legal authority to make any addition in the declared trading results of the assessee---Addition made was, therefore, declared to be ab initio illegal and void, which was deleted with direction that trading result of the assessee should be accepted. [pp. 3895, 3896] A & B Collector, Sahiwal v. Muhammad Akhtar 1971 SCMR 681 rel. 1991 PTD (Trib.) 531; 1993 PTD 392; NTR 1993 (Trib.) 143 and 1999 PTD (Trib.) 4 ref. ORDER AFTAB IQBAL RATH6RE (ACCOUNTANT MEMBER). ---These two, cross-appeals have been filed for the assessment year 1995-96 against the order of learned CIT(A), dated 8-10-1997. As the appeals relate to one assessee, these are disposed of through this single order. 2. Heard Mr. Sajjad Ahmed, learned D.R. and Mr. Javed Zakaria, Advocate, learned representative of the assessee. 3. We first take up appeal of the assessee in I.T.A. No. 1959. In addition to agitating the impugned order on facts. the appellant has raised legal objection. In the preliminary legal objection raised, learned A.R. submitted that proviso to section 62(1) of the Income Tax Ordinance was brought on the statute book by Finance Act, 1993. It makes it mandatory for the Assessing Officer, where the assessee produces. books of accounts as evidence in support of the return, that he shall, before disagreeing with such accounts give notice to the assessee of the defects in the accounts and provide an opportunity to the assessee to explain his point of view about such defect and record such explanation and the basis of computation of total income of the assessee in the assessment order. (underlined by us).…

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