Law: Income Tax Ordinance, 1979

Section: 118,118-E,156

Income Tax Ordinance (XXXI of 1979)......Ss. 156 & 118 E Rectification of mistakes Income of trial production was assessed at normal rate of tax by rectification of assessment order Validity Income/loss earned during trial production was to be considered part of capital and was not taxable under normal rate Order passed under S.156 of the Income Tax Ordinance, 1979 was vacated and Appellate Tribunal restored original order. 1992 SCMR 687 = 1992 PTD 570 1976 PTD 109 and (1971) 23 Tax 4 (Trib.) rel. ORDER Titled appeal at the instance of the assessee pertaining to the assessment year 1992 93 has been directed against the impugned order 15 12 2001 passed by the learned CIT(A) Zone III, Lahore. The sole contention agitated by the assessee is that the learned Assessing Officer was not justified in passing rectification order under section 156 of the income Tax Ordinance, 1979 (hereinafter called the Ordinance) since it was without jurisdiction and confirmation thereof by the learned First Appellate Authority has also been objected to 2. Briefly stated the facts of the case are that assessment for the year under consideration was completed at net income of Rs.2,09,956 against the declared nil income by rejecting the claim of exemption under clause 118 E of the Second Schedule to the Ordinance. The sales relevant to the trial production were estimated at Rs.20,00,000 against the declared at Rs.11,27,923, in the first round of litigation the learned First Appellate Authority reduced the sales to Rs.1,80,000 and thus total income was assessed at Rs.1,59,959. It is also to be noted that in the IT 30 prepared with the order passed under section 132 of the Ordinance and tax under section 80 D was levied at Rs.5,640. Subsequently, the Assessing Officer while following instructions of the C.B.R. rectified the assessment framed under section 132/62 of the Ordinance and proceeded to assess the trial production income at normal rate of Tax. Accordingly the assessment order was rectified. The assessee failed at the first appellate level whereby the rectified order was confirmed by the learned First Appellate Authority, hence the present appeal on behalf of the assessee. 3.…

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