Law: Income Tax Ordinance, 1979

Section: 66A

Law: Constitution of Pakistan, 1973

Section: 199

(a) Income Tax Ordinance (XXXI of 1979)----S.66-A---Re-opening of case---Power of Inspecting Additional Commissioner to revise Deputy Commissioners order---Scope and prerequisites---Phrase "Prejudicial to the interests of the Revenue" has to be read in conjunction with "an erroneous order passed by the Assessing Officer"---Every loss of revenue in consequence of an order of the Assessing Officer could not be treated as prejudicial to the interests of the Revenue---Principles. Section 66-A of the Income Tax Ordinance, 1979 had conferred powers on the Inspecting Assistant Commissioner/Additional Inspecting Assistant Commissioner to revise the order of Assessing Officer/Deputy Commissioner of Income Tax, after calling for and examining the record of any proceedings under the Ordinance, if he considered and was of the view that an order passed by the Assessing Officer/Deputy Commissioner of Income Tax was erroneous inasmuch as it was prejudicial to the interests of the Revenue. It further empowered the Assessing Officer/Deputy Commissioner of Income Tax to pass such order as the circumstances of the case would justify including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment to be made subject to the condition that appropriate and effective opportunity of being heard was provided to the assessee/aggrieved party. From a bare perusal of section 66-A of the Ordinance it is to be noted that the Inspecting Assistant Commissioner, was required to minutely examine the record of any proceedings which included the assessment finalized by the Assessing Officer/Deputy Commissioner of Income Tax to conclude that the assessment was erroneous and prejudicial to the interests of the Revenue to attract the provisions of this section. The prerequisite to the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Income-tax Officer is erronebus insofar as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of…

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