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Petitioner: Musharaf Gulzar and others VS Respondent: Commissioner IR, RTO, Rawalpindi and others
Court Name: Appellate Tribunal Inland Revenue Judge(s): Muhammad Naeem, Shahid Masood Manzar Title:Musharaf Gulzar and others vs Commissioner IR, RTO, Rawalpindi and
others Case No.:I.T.As. Nos.1752/IB to 1754/IB of 2017, M.A. (Rect.) No. 03/IB of 2017 in I.T.As. Nos.1836/IB, 1078/IB of 2017, M.A. (Rect.) No. 04/IB of 2017 in I.T.As. Ncs.1837/IB, 1071/IB of 2017, M.A. (Rect.) No.05/IB of 2017 in I.T.As. Nos.1838/IB and 1072/IB of 2017 Date of Judgment:2019-05-06 Reported As: 2020 PTD (Trib.) 733 Result: Order accordingly Judgment ORDER Out of the above titled nine appeals, three have been filed by the taxpayer while remaining six have been filed by the tax department against three separate impugned Orders Nos.300, 301 and 302 of 2017 dated 26.09,2017 passed by the learned Commissioner Inland Revenue (Appeals-III), Islamabad for tax years 2014 to 2016. The department also filed 3 appeals against penalty order under section 182 of the Income Tax Ordinance, 2001 against the same impugned order . 2. The department has also filed three Miscellaneous Applications for rectification in the stay orders which has not been pressed by the learned D.R and requested to withdraw the same. 3. The grounds as framed by both the parties are as under: Taxpayer Grounds of Appeal T .Y. 2014 in I.T .A. No. 1752 A. That the impugned order is bad in Law, against the administration of justice, against the facts as well as against the statutory provisions of Income Tax Ordinance, 2001. B. That Respondent No.1 was not at all justified to confirm the addition under section 111(1)(b) on account of payment made to M/s Mari Petroleum Ltd. amounting to Rs.202,000,000 for purchase of auction plot. The appellant during proceeding submitted affidavit and solemnly declared that in said plot there are three partners with equal sharing ratio. The Respondents Nos.1 and 2 adjudged whole amount against the appellant. It is pertinent to mention here that said asset inadvertently not declared in tax year 2014 BUT duly declared in tax year 2016 well before raid. The appellant already requested for the revision of said declarations, which bluntly rejected by the
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Respondent. The contention of Respondent No. 2 is unjustified due to the reason all the records are in the custody of Respondent No. 1, which impounded during raid and how it is possible for appellant to submit proof/evidence. C. That Respondent No.2 was not at all justified to remand the addition of suppressed sales of immoveable properties amounting to Rs.13,381,579,128.00 with unclear directions. The Respondent No.2 was duty bound to instruct the Respondent No.1 to submit the proof of ownership of immoveable property amounting to Rs. 13,381,579,128.00. The Respondent No.2 was duty bound to delete the said addition in case of non-submission of evidence by the Respondent No.2. The alleged ownership of immoveable property would be verified from concerned housing society which is M/s Bahria Town (Pvt.) Ltd. The Respondents have complete data/record/information of alleged proper ties including plot/house no, street no, phase, city name etc. The Article 117, Qanun-e-Shahadat Order , 1984 has lays down general principal that any person dependent upon existence of the fact, then, he has to prove those facts but in the instant case Respondent No.1 severely fail to prove the ownership of alleged properties in the name of appellant. D. That Respondent No.2 was not at all justified to remand the addition of foreign remittances Rs.39,174,000. The appellant submitted before the CIR (A) that evidence of foreign remittance is in the files, which impounded by the Respondent No.1 during raid. The appellant requested the Respondent No.2 to directed the Respondent No. 1 for returning of records during the proceedings before him but worthy Respondent No.2 ignored the request / prayer of the appellant and remand the case back for further screwing the appellant. G. That Respondent No.2 was not at all justified to remand the addition of so called unexplained bank balances amounting to Rs.174,607,800, which adjudged, by the Respondent No.1 on the treatment of Peak entries principle. It is very surprising that Respondent No.1 filed appeal against the treatment of peak entries before this Hon'ble Tribunal in the case of same appellant for the Tax Year 2013 and passed order for the Tax Year 2014 on the basis of peak entries. The Hon'ble ATIR has decided the appeal of your appellant and directed the tax department to treat the appellant as property dealer and calculate the gross revenue @ 1% of total bank credits. The Respondent was duty bound to obey the judgment of this Hon'ble Tribunal of Tax Year 2013 for the Tax Year 2014 Taxpayer Grounds of Appeal T .Y. 2015 I.T .A. No. 1753 A. That the impugned order is bad in Law, against the administration of justice, against the facts as well as against the statutory provisions of Income Tax Ordinance, 2001. B. That Respondent No.1 was not at all justified to confirm the addition under section 111(1)(b) on account of investment made in M/s. Attibassi Pakistan Ltd amounting to Rs. 1,000,000 . The Respondent during raid impounded all the files and records of the appellant and due to this reason appellant was not in a position to submit the proper reply along with evidence. That Respondent No.2 was not at all justified to remand the addition of suppressed sales of immoveable properties amounting to Rs. 3,351,510,437.00 with unclear directions. The Respondent No. 2 was duty bound to instruct the Respondent No.1 to submit the proof of ownership of immoveable property amounting to Rs.3,351,510,437.00. The Respondent No. 2 was duty bound to delete the said addition in case of non-submission of evidence by the Respondent No. 2. The alleged ownership of immoveable property would be verify from concerned housing society which is M/s. Bahria Town (Pvt.) Ltd. The Respondents have complete data/record / information of alleged properties including plot/house no, street no, phase, city name etc. The Article 117, Qanun-e-Shahadat Order , 1984 has lays down general principal that any person dependent upon existence of the fact, then, he has to prove those facts but in the instant case Respondent No. 1 severely fail to prove the owners hip of alleged properties in the name of appellant. D. That Respondent No.2 was not at all justified to remand the addition of so called unexplained bank balances amounting to Rs. 75,030,589, which adjud ged, by the Respondent No. 1 on the treatment of Peak entries principle. It is very surprising that Respondent No. 1 filed appeal against the treatment of peak entries before this Hon'ble Tribunal in the case of same appellant for the Tax Year 2013 and passed order for the Tax Year 2015 on the basis of peak entries. The Hon'ble ATIR has decided the appeal of your appellant and directed the tax department to treat the appellant as property dealer and calculate the gross revenue Q 1% of total bank credits. The Respondent was duty bound to obey the judgment of this Hon'ble Tribunal of Tax Year 2013 for the Tax Year 2015.
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Taxpayer Grounds of Appeal T .Y. 2016 I.T .A. 1754 A. That the impugned order is bad in Law, against the administration of justice, against the facts as well as against the statutory provisions of Income Tax Ordinance, 2001. B. That Respondent No. 2 was not at all justified to remand the addition of suppressed sales of immoveable properties amounting to Rs.3,565,599,63 9.00/- with unclear directions. The Respondent No. 2 was duty bound to instruct the Respondent No.1 to submit the proof of ownership of immoveable property amounting to Rs.3,565,599,639.00/-. The Respondent No. 2 was duty bound to delete the said addition in case of non- submission of evidence by the Respondent No.2. The alleged ownership of immo veable property would be verify from concerned housing society which is M/s Bahria Town (Pvt.) Ltd. The Respondents have complete data/record / information of alleged properties includin g plot/house no, street no, phase, city name etc. The Article 117, Qanun- e-Shahadat Order , 1984 has lays down general principal that any person dependent upon existence of the fact, then, he has to prove those facts but in the instant case Respondent No. 1 severely fail to prove the ownership of alleged properties in the name of appellant. C. That Respondent No. 2 was not at all justified to remand the addition of so called unexplained bank balances amounting to Rs.51,526,674/-, which adjudged, by the Respondent No. 1 on the treatment of Peak entries principle. It is very surprising that Respondent No.1 filed appeal against the treatment of peak entries before this IIon'ble Tribunal in the case of same appe llant for the Tax Year 2013 and passed order for the Tax Year 2016 on the basis of peak entries. The Hon'ble ATIR has decided the appeal of your appellant and directed the tax department to treat the appellant as property dealer and calculate the gross revenue @ 1 % of total bank credits. The Respondent was duty bound to obey the judgment of this Hon'ble Tribunal of Tax Year 2013 for the Tax Year 2016. 4. The tax department in the cross appeals agitated the impugned orders on the following grounds of appeal: Tax Department Grounds of Appeal T .Y. 2014 I.T .A. 1836 1. The order of CIR (Appeals) is bad in law and against the facts of the case. 2. The CIR (Appeals) at pages 5 to 10, sub-Paras (i) to (iv) has remanded the case back on additions made under section 111(1) and issued certain directions for which he is not authorized as per provisions of section 129 (1)(a) of the Income Tax Ordinance, 2001. Through the said provision of law, the CIR (Appeals) can only "confirm, modify or annul" an assessment order . 3. Without prejudice to the above, the CIR (Appeals) at page 1, para No. 2 and page 5, sub-Para No. (i) admitted the facts that series of notices were issue d to the taxpayer and that the taxpayer promised on oath to provide the required evidence which he failed and besides the fact that the taxpayer was allowed full access to the impounded record for extraction of necessary evidence/proof, yet remanding the case back to provide further opportunity is against the spirit of the law . 4. The CIR (Appeals) at page 5, sub-para No. (i) failed to apprise the fact that information was obtained from Bahria Town (Pvt.) Ltd., which the taxpayer vehemently claims to be his principal, who certified only an amount of Rs.345,051,999/- to have been paid by taxpayer as agent. The credit of the same was duly given while making assessment. The remaining amount of Rs.13,381,579,128/- remained unexplained , hence, was liable to be added to income under section 111(1)(d) of the Income Tax Ordinance, 2001. Remanding the case back by the CIR (Appeals) on the already settled issue is highly unjustified and against the law . 5. The CIR (Appeals) failed to recognize the fact that definite information was obtained from FIA that taxpayer visited Dubai 6 times which taxpayer also admitted and that the taxpayer was duly confronted on the issue who offered no explanation, hence, deleting the addition in toto on this account is in violation of provisions of subsections (5) and (8) of section 122 of the Income Tax Ordinance, 2001. 6. The CIR (Appeals) at page 8, sub-para No. (iii) misdirected himself that taxpayer was not provided access to the impounded record whereas the taxpayer and his team of accountants were allowed full access to the said record. The same fact was discussed at length in the assessment order , however , the CIR (Appeals) ignored the above facts and remanded the addition of foreign remittances to the tune of Rs.39,174,000 for de novo consideration. 7. The CIR (Appeals) at page 8, sub-para No. (iii) failed to quote any provision of law under which he remanded back the addition on account of Peak Balance at Rs.174,607,800 and directed to seek explanation on total credited
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amount found in all bank accounts. 8. The taxpayer was provided 11 opportunities of being heard along with complete access to his impounded hard drives/data/record to extract necessary information for making compliance, even then the taxpayer failed to prove his stance with concrete evidence which indicates that taxpayer has nothing to offer in his defense and just played delaying tactics. Based on the above facts, the assessment of the DCIR was strictly in accordance with law and may be upheld. 9. That the appellant may be allowed to alter , amend, or add more grounds of appeal at the time of hearing. Tax Department Grounds of Appeal T .Y. 2015 I.T .A., 1837 1. The order of CIR (Appeals) is bad in law and against the facts of the case. 2. The CIR (Appeals) at pages 4 to 9, sub-Paras (i) to (iii) has remanded the case back on additions made under section 111(1) and issued certain directions for which he is not authorized as per provisions of section 129 (1)(a) of the Income Tax Ordinance, 2001. Through the said provision of law, the CIR (Appeals) can only "confirm, modify or annul" an assessment order . 3. Without prejudice to the above, the CIR (Appeals) at page 1, para No. 2 and page 5, sub-para No. (i) admitted the facts that series of notices were issue d to the taxpayer and that the taxpayer promised on oath to provide the required evidence which he failed and besides the fact that the taxpayer was allowed full access to the impounded record for extraction of necessary evidence/proof, yet remanding the case back to . provide further opportunity is against the spirit of the law . 4. The CIR (Appeals) at page 5, sub-para No. (i) failed to apprise the fact that information was obtained from Bahria Town (Pvt.) Ltd., which the taxpayer vehemently claims to be his principal, who certified only an amount of Rs.227,805,000 to have been paid to Bahria Town (Pvt.) Ltd. by taxpayer as agent. The credit of the same was duly given while making assessment. The remaining amount of Rs.3,351,510,437 remained unexplained, hence, was liable to be added to income under section 111(1)(d) of the Income Tax Ordinance, 2001. Remanding the case back by the CIR (Appeals) on the already settled issue is highly unjustified and against the law . 5. The CIR (Appeals) at page 7, sub-para (ii) failed to recognize the fact that definite information was obtained from FIA that taxpayer visited Dubai 6 times which taxpayer also admitted and that the taxpayer was duly confronted on the issue who offered no explanation, hence, deleting the addition in toto on this account is in violation of provisions of subsections (5) and (8) of section 122 of the Income Tax Ordinance, 2001. 6. The CIR (Appeals) at, page 7, sub-para No. (iii), failed to quote any provision of law under which he remanded back the addition on account of Peak Balance at Rs.75,030,589 and directed to seek explanation on total credited amount found in all bank accounts. 7. The taxpayer was provided 11 opportunities of being heard along with complete access to his impounded hard drives/data/record to extract necessary information for making compliance, even then the taxpayer failed to prove his stance with concrete evidence which indicates that taxpayer has nothing to offer in his defense and just played delaying tactics. Based on the above facts, the assessment of the DCIR was strictly in accordance with law and may be upheld. 8. That the appellant may be allowed to alter , amend, or add more grounds of appeal at the time of hearing. Tax Department Grounds of Appeal T .Y. 2016 I.T .A., 1838 1. The order of CIR (Appeals) is bad'in law and against the facts of the case. 2. The CIR (Appeals) at pages 5 to 8, sub-Paras (i) to (iii) has remanded the case back on additions made under section 111(1) and issued certain directions for which he is not authorized as per provisions of section 129(1)(a) of the Income Tax Ordinance, 2001. Through the said provision of law, the CIR (Appeals) can only "confirm, modify or annul" an assessment order . 3. Without prejudice to the above, the CIR (Appeals) at page 2, para No. 2 and page 5, sub-Para No. (i) admitted the facts that series of notices were issue d to the taxpayer and that the taxpayer promised on oath to provide the required evidence which he failed and besides the fact that the taxpayer was allowed full access to the impounded record for extraction of necessary evidence/proof, yet remanding the case back to provide further opportunity is against the spirit of the law .
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4. The CIR (Appeals) at page 5, sub-para No. (i), failed to apprise the fact that information was obtained from Bahria Town (Pvt.) Ltd., which the taxpayer vehemently claims to be his principal, who certified only an amount of Rs.56,200,000/- to have been paid to Bahria Town (Pvt.) Ltd. by taxpayer as agent. The credit of the same was duly given while making assessment. The remaining amount of Rs.3,565,599,639/- remained unexplained, hence, was liable to be added to income under section 111(1)(d) of the Income Tax Ordina nce, 2001. Remanding the case back by the CIR (Appeals) on the already settled issue is highly unjustified and against the law . 5. The CIR (Appeals) at page 7, sub-para (ii) failed to recognize the fact that definite information was obtained from FIA that taxpayer visited Dubai 6 times which taxpayer also admitted and that the taxpayer was duly confronted on the issue who offered no explanation, hence, deleting the addition in toto on this account is in violation of provisions of subsections (5) and (8) of section 122 of the Income Tax Ordinance, 2001. 6. The CIR (Appeals) at page 7, sub-par a No. (iii), failed to quote any provision of law under which he remanded back the addition on account of Peak Balance at Rs.51,526,674 and directed to seek explanation on total credited amount found in all bank accounts. 7. The taxpayer was provided 11 opportunities of being heard along with complete access to his impounded hard drives/data/record to extract necessary information for making compliance, even then the taxpayer failed to prove his stance with concrete evidence which indicates that taxpayer has nothing to offer in his defense and just played delaying tactics. Based on the above facts, the assessment of the DCIR was strictly in accordance with law and may be upheld. 8. That the appellant may be allowed to alter , amend, or add more grounds of appeal at the time of hearing. 5. The department has filed three appeal against the penalty orders on the grounds which are reproduced hereunder Tax Department Grounds of Appeal T .Y. 2014 under section 182(1) I.T .A. No. 1078 1. The order of CIR (Appeals) is bad in law and against the facts of the case. 2. That the Learned CIR (Appeals) was not justified to remand the case to the officer for re-assessment as after the substitution of clause (a) of subsection (1) of Section 129 of the Income Tax Ordina nce, 2001 through Finance Act, 2005 the CIR (A) has been divested of the power to set aside the assessment for re-assessment. This dispensation was specifically provided for disposing the appeal lodged under section 127 of the Income Tax Ordinance, 2001 to bring relief of the taxpayer and also to stop unnecessary deferment of revenue. 3. That the Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because after amendment through Finance Act, 2005, CIR (A) can only modify , confirm or annul the assessment after making (or getting conducted) enquiries or examine the books of accounts etc as he deems fit. 4. That Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because the Larger Bench of the Learned ATIR has already given its verdict that the CIR (A) lacks jurisdiction to remand the case to the Assessing Officer for new Assessment vide order ITAs Nos. 1078 and 1079/LB/2010 dated 16-03-2012. 5. That the appellant may be allowed to alter , amend or add more grounds of appeal at the time of hearing. Tax Department Grounds of Appeal T .Y. 2015 under section 182(1) I.T .A. No.1071 1. The order of CIR (Appeals) is bad in law and against the facts of the case. 2. That the Learned CIR (Appeals) was not justified to remand the case to the Officer for re-assessment as after the substitution of clause (a) of subsection (1) of Section 129 of the Income Tax Ordinance, 2001 through Finance Act, 2005 the CIR (A) has been divested of the power to set aside the asses sment for re-assessment. This dispensation was specifically provided for disposing the appeal lodged under section 127 of the Income Tax Ordinance, 2001 to bring relief of the taxpayer and also to stop unnecessary deferment of revenue. 3. That the Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because after amendment through Finance Act, 2005, CIR(A) can only modify , confirm or annul the assessment after making (or getting conducted) enquiries or examine the books of accounts etc. as he deems fit. 4. That Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because the Larger Bench of the Learned ATIR has already given its verdict that the CIR (A) lacks
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jurisdiction to remand the case to the Assessing Officer for new Assessment vide order ITAs Nos.1078 and 1079/LB/2010 dated 16-03-2012. 5. That the appellant may be allowed to alter , amend or add more grounds of appeal at the time of hearing. Tax Department Grounds of Appeal T .Y. 2016 under Section 182(1) I.T .A. No. 1072 1. The order of CIR (Appeals) is bad in law and against the facts of the case. 2. That the Learned CIR (Appeals) was not justified to remand the case to the Officer for re-assessment as after the substitution of clause (a) of subsection (1) of Section 129 of the Income Tax Ordinance, 2001 through Finance Act, 2005 the CIR(A) has been divested of the power to set aside the asses sment for re-assessment. This dispensation was specifically provided for disposing the appeal lodged under section 127 of the Income Tax Ordinance, 2001 to bring relief of the taxpayer and also to stop unnecessary deferment of revenue. 3. That the Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because after amendment through Finance Act, 2005, CIR(A) can only modify , confirm or annul the assessment after making, (or getting conducted) enquiries or examine the books of accounts etc. as he deems fit. 4. That Learned CIR (Appeals) was not justified in remanding the order to the Assessing Officer for reframing assessment because the Larger Bench of the Learned ATIR has already given its verdict that the CIR (A) lacks jurisdiction to remand the case to the Assessing Officer for new Assessment vide order ITAs Nos.1078 and 1079/LB/2010 dated 16-03-2012. 5. That the appellant may be allowed to alter , amend or add more grounds of appeal at the time of hearing. 6. Out of nine appeals titled above six are cross appeals for all the three years in a manner that where first appellate authority remanded the case back with certain directions the revenue feels aggrieved against the remand order and findings thereof whereas on the issues where the treatment of the learned Deputy Commissioner has been upheld or remanded back the taxpayer challenged such findings of the first appellate authority before this Tribunal. Regarding Ground No.B of taxpayer appeal for the tax year 2014, the learned AR contended that the learned CIR (A) confirm the addition of payment made for purchase of plot from M/s. Mari Petroleum Ltd without going through the case record. The learned AR submitted that during the assessment proceeding taxpayer submitted affidavit and solemnly declared that he has 1/3rd share in the said plot. Whereas department taxed whole amount against the appellant. It is submitted that the said property has been declared in the wealth statement of tax year 2016 before raid as well as before the initiation of proceedings. It is submitted that the source of purchase of said share is investment of different investors, which can be verified from the impounded records of the taxpayer , which is still in the custody of department. According to the learned AR, he filed request for revision of said declarations/wealth statement, which was not allowed by the Respondent/Department. It is contended that it is admitted fact that all the record is in the custody of Respondent/Department, which became the reason for non-submission of documentary evidence. On the other hand the learned D.R on behalf of department supported the orders of assessing officer and the learned CIR(A) and submitted that taxpa yer failed to declare the said plot in the relevant tax year i.e. 2014. He further submitted that declaration of said plot in the Tax Year 2016 is irrelevant.…
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