Law: Income Tax Ordinance, 1979

Section: 12,53(3)(B),66A,156

THIS ORDER PASSED BY: KHALID WAHEED AHMAD, JUDICIAL MEMBER:---------- This is an appeal by the assessee against the order of the learned IAC, Range-I, Zone-A, Lahore under section 66A for the assessment year, 1996-97. It was agitated by the AR that order under section 66A by the IAC concerned, dated 17-1-2001 was bad in law and against the facts of the case and that it was without assumption of lawful jurisdiction. Similarly, the cancellation of assessment under section 66A was in excess of lawful jurisdiction and that order for cancellation of assessment should have been restricted to the extent of claim of expenses under heads Charity and Donation only and that directions should have been issued for modification of assessment under subsection 3 of section 59. It was prayed that the order of the IAC under section 66A should be vacated and that of the Assessing officer should be restored. Brief and relevant facts of the case leading to this appeal are that the learned IAC, Range-I, Zone-A, Lahore examined the assessment record of the assessee for the assessment year, 1996-97 and issued a notice under section 66A, dated 4-1-2001 through which the assessee was confronted that the assessment framed for 1996-97 by the Assessing officer, Circle-27, Zone-A, Lahore had at a net income of Rs.61,266 under the SAS was erroneous insofar as prejudicial to the interest of Revenue as under; You submitted return of total income declaring income at Rs.61,266 in IT-II.B along with trading, profit and loss account and balance-sheet of the business. The Assessing officer accepted the return under SAS. The action of the Assessing officer was wrong as the case did not qualify under SAS. The Assessing officer failed to scrutinize the return and finalized the case under SAS. As per P&L account, you claimed charity of Rs.576 and donation of Rs.1605 which were inadmissible expenses as they did not relate to the business activity. As the return was filed without adding back these inadmissible expenses, the return did not qualify for acceptance under SAS 1996-97 in view of Para. No. 2(1) of Circular No.4 of 1996, dated 1-7-1996. The Assessing officer ignored this fact and finalized…

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