Law: Income Tax Ordinance, 1979

Section: 24,24(ff),136

Income Tax Ordinance (XXXI of 1979)----Ss. 24(ff) & 136---Addition made under S.24(ff) of Income Tax Ordinance, 1979---Non-issuance of notice confronting addition---Effect ---Assessee produced before Appellate Authority-copy of ledger of payee and relevant.record to show that such amount had been paid to payee through different bills on different dates, which were below statutory .amount of Rs.50,000---Appellate Authority deleted such addition, which order was upheld by Tribunal---Validity---In view of such findings of fact, absence of service, of notice confronting the addition became of secondary nature---If such findings of fact had not been recorded by Appellate Authority, then consideration of question, whether non-issuance of notice renders impugned addition to be illegal, would have been relevant---High Court declined to answer question as framed by Revenue. ORDER This further appeal under section 136(1) of the late Income Tax Ordinance, 1979 assails an order of the Lahore Bench of the- Income Tax Appellate Tribunal Camp at Faisalabad, dated 21-4-1998 claiming that following question of law has arisen out of the order of the Tribunal. "Whether under the facts and circumstances of the case the learned Income Tax Appellate Tribunal was justified to delete the addition made under section 24(ff) of the Income Tax Ordinance, 1979 instead of setting it aside?" 2. According to the statement of the case the appellant/assessee is a Private Limited Company which at the relevant time derived income from process of cloth. For the assessment year 1995-96 a return was filed to declare net income at Rs.l,14,172. In the course of assessment proceedings it was found that the assessee paid a sum of Rs.63,886 to Messrs Longman Industrial Store, Faisalabad through a single bill. That amount being more than Rs.50,000 and not paid through cheque was found hit by the mischief of section 24(ff) of the late Ordinance and accordingly was disallowed as an expense. 3. Before the First Appellate Authority it was contended that as a matter of fact…

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