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Petitioner: MESSRS CRESCENT ART FABRICS LTD. THROUGH ITS CHIEF EXECUTIVE VS Respondent: THE COMMISSIONER OF INCOME-TAX, CENTRAL ZONE CIRCLE, V, LAHORE
1988 P T D 857
1988 P T D 857
[Lahore High Court]
Before Saad Saood Jan J
Messrs CRESCENT ART FABRICS LTD. through its Chief Executive
Versus
THE COMMISSIONER OF INCOME-TAX, CENTRAL ZONE CIRCLE, V, LAHORE and 2 others
Writ Petition No. 1359 of 1986, decided on 14th April, 1986.
(a) Income-tax Ordinance (XXXI of 1979)--
--S. 65 Constitution of Pakistan (1973), Art. 199--Constitutional jurisdiction--Scope--Whether the information, on basis of which Income-tax Officer could reopen assessment was correct or could lead to conclusion that petitioner had under-stated the cost of construction, was a matter of inquiry---Held, such inquiry could not be held by High Court.
(b) Income-tax Ordinance (XXXI of 1979)--
--S. 65--Self-Assessment Scheme--Petitioner submitted details alongwith returns--Assessment order passed after scrutinizing the record--Contention that subsequent issuance of notice under S.65, could not be regarded but a mere change of opinion, held, could not be accepted for earlier assessments were made under Self-Assessment Scheme and statements made by assessee were accepted on their face value.
Ziaullah for petitioner.
M. Ilyas Khan for the Department.
ORDER
This order will dispose of two writ petitions registered as W.P. Nos. 1359 and 1360, both of 1986. These writ petitions relate to two assessment years, that is, 1984-85 and 1985-86. In respect of these years the petitioner submitted returns under the self-assessment schemes. These were processed accordingly and assessment orders were passed. On 26-2-1986 the Income-tax Officer issued notices to the petitioner under section 65 of the Income-tax Ordinance stating that its income has been under-assessed. The petitioner has challenged the legality of these notices through these writ petitions.
2. It is contended that before issuing these notices the Income-tax Officer had no specific information upon the basis of which he could reopen the assessments. This is not correct. On 12-3-1986 the Income-tax Officer informed the petitioner the precise basis on which he had come to the prima facie conclusion that it was a case of escaped assessment. The letters written by him to the petitioner in this regard are Annexure ",G" in both petitions. Whether this information was correct or could lead to the conclusion that the petitioner had under-stated the cost of construction is a matter of inquiry, which cannot be held by this Court.
3. It is then contended that the information specified in the letters of 12-3-1986 was not available with the Income-tax Officer on the day he issued the impugned notices. This has been denied by the Income-tax Department in its report. It appears that after receipt of the impugned notices a representative of the petitioner inspected the record and he did not find any mention of the said information. The department has stated that during the course of inspection the representative of the petitioner was not shown the confidential record in which the said information was contained. I do root find any basis, for rejecting the explanation of the department.
4. Finally, it is contended on behalf of the petitioner that together with the returns it had submitted the details of the construction, which it had carried out. The said record was scrutinized by the Income-tax Officer before making assessment order. Thus the subsequent issuance of notices under section 65 of the Income-tax Ordinance could not be regarded but a mere change of opinion by the Income-tax Officer. This contention cannot be accepted for the earlier assessments were made under self assessment scheme where the statements made by the assessee are accepted on their face value. In any case the assessment orders do not indicate that the cost of construction was examined in detail at the time when the assessment orders were made.
5. For the reasons stated above I find no merit in these writ petitions, which I hereby dismiss in limine.
M.A.K./C-251 L Petitions dismissed-