Law: Income Tax Ordinance, 1979

Section: 62(1),136(1)

Income Tax Ordinance (XXXI of 1979)----Ss. 62 (1), proviso [as inserted by Finance Act, 1993] & 136 (1)---Assessment---Production of accounts---Verification of accounts---Non-issuance of notice under S.62 of Income Tax Ordinance, 1979---Assessing Officer made add-hacks out 'of profit and loss account expenses without confronting assessee, who had produced books of account/vouchers as evidence in support of his return---Assessments for previous years were framed by Assessing Officer, after promulgation of Finance Act, 1993, without issuing notices under S.62 of Income Tax Ordinance, 1979---Validity---After insertion of proviso to S.62 (1) in Income Tax Ordinance, 1979, no doubt was left regarding procedure for rejection of declared version, where proper books of accounts were maintained and produced by assessee for examination---Even though the proviso which clarified and explained procedure to be followed by Assessing Officer for rejecting declared version was inserted through Finance Act, 1993, it applied even to prior assessment years where assessments were framed after insertion of the proviso---Assessments in question were framed after insertion of proviso thus, it applied even to those assessments---All assessments in question were framed in violation of mandatory provision of law as contained in S.62 of Income Tax Ordinance, 1979---Assessing Officer could not make add-backs out of profit and loss account expenses without confronting the assessee, especially where the assessee had produced books of accounts/ vouchers as evidence in support of returns---For confronting assessee on the point of proposed additions of unverifiable nature, issuance of notice under S.62 of Income Tax Ordinance, 1979, was mandatory---Appeal was allowed accordingly. JUDGMENT SYED HAMID ALI SHAH, J.---This single judgment will dispose of Income Tax Appeal No.3 of 1998 titled "Messrs Shahroom International (Pvt.) Limited v. Deputy Commissioner of Income Tax and 2 others", Income Tax Appeal No.4 of 1998 titled "Messrs Shahroom International (Pvt.) Limited v. Deputy Commissioner of Income Tax and 2 others", Income Tax Appeal No.5 of 1998 tilted "Messrs Shahroom International…

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