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I.T.A. No.447/LB of 2014, decided on 7th April, 204.

----S. 122(5)(i)---Amendment of assessment---Limitation---Taxpayer contended that original assessment was made on 30-9-2007 while notice under S.122(1) of the Income Tax Ordinance, 2001 was issued on 5-11-2012; that assessment framed under S.122 of the Income Tax Ordinance, 2001 was not maintainable being framed after lapse of statutory limitation as envisaged by subsection (2) of S.122 of the Income Tax Ordinance, 2001; and that Assessing Officer was bound to amend the assessment on or before 30-9-2012 under the law---Validity---Admittedly, deemed assessment was completed on 30-9-2007 while notice under S.122(1) read with S.122(5) & (9) of the Income Tax Ordinance, 2001 was issued on 5-11-2012---Assessing Officer was bound to amend the deemed assessment on or before 30-9-2012 which he failed to do---Even otherwise the proceedings for amending deemed assessment was also initiated by issuing show-cause notice on 5-11-2012 which was also after the prescribed time limit---Amended assessment order was time barred and was not maintainable in the eye of law---Order passed by the First Appellate Authority was vacated by the Appellate Tribunal and amended assessment order dated 30-06-2013 was cancelled. 2013 PTD (Trib.) 1169 rel. Niaz Ahmad Khan for Appellant. Mrs. Zahida Sarfraz, D.R. for Respondent. Date of hearing: 7th April, 2014.

Titled appeal has been filed at the instance of the taxpayer calling in question the impugned order dated 4-11-2013 passed by the learned CIR(A) Multan. The sole grievance of the taxpayer is that the learned CIR(A) was not justified to dismiss the appeal for lack of prosecution. The taxpayer also challenged the amended order under section 122 of the Income Tax Ordinance, 2001 passed by the Deputy Commissioner (IR) being time barred. 2. Facts in brief are that the taxpayer is an individual, filed her income tax return for the tax year 2007 declaring business income at Rs.200,000. It was observed by the assessing officer that the taxpayer invested Rs.20,80,000 for the purchase of immovable property. Therefore, on the basis of said information, a show-cause notice under section 122(1) and with 122(5) & (9) of the Income Tax Ordinance, 2001 dated 5-11-2012 was issued. The notice was duly complied with and written arguments along with relevant documents were provided. The explanation submitted by the taxpayer was found unsatisfactory, hence the learned DCIR amended the assessment order under section 122(1) read with section 122(5)(i) of the Income Tax Ordinance, 2001 and total income was assessed at Rs.26,30,000 against the declared/already assessed income of Rs.2,00,000. Being aggrieved with the above treatment, the taxpayer approached the learned first appellate authority who vide an order dated 4-11-2013 dismissed the appeal of the taxpayer on the basis of non-prosecution. Hence the instant appeal by the taxpayer. 3. Both the parties have been heard and relevant orders perused. At the very outset the learned counsel of the taxpayer raised a preliminary objection that the assessment made under section 122(5)(i) is badly time barred. It was submitted by the learned counsel that original assessment in the present case was made on 30-9-2007 while notice under section 122(1) read with section 122(5) and (9) of the Income Tax Ordinance, 2001 was issued on 5-11-2012. It was argued that assessment framed under section 122 is not maintainable being framed after laps of statutory limitation as envisaged in subsection (2) of section 122 of the Income Tax Ordinance, 2001. It was submitted that as per provisions of law the DCIR was bound to amend the assessment on or before 30-9-2012. In this regard reference was made to the reported judgment cited as 2013 PTD (Trib.) 1169. 4. The learned D.R. on the other hand opposed the arguments advanced by the learned CIR(A) and submitted that a number of opportunities have been provided to the taxpayer but the taxpayer has failed to avail the same. He prayed for maintaining of the impugned findings recorded by both the authorities below. 5. After hearing the rival parties and going through the record available with us, we are of the considered view that the contention of the taxpayer is correct. Admittedly, the deemed assessment in this case was completed on 30-9-2007 while notice under section 122(1) read with sections 122(5) and (9) of the Income Tax Ordinance, 2001 was issued on 5-11-2012. As per law the Assessing Officer was bound to amend the deemed assessment on or before 30-9-2012 in which he failed to do so and amended assessment was 30-9-2013. Even otherwise the proceedings for amending deemed assessment was also initiated by issuing show-cause" notice on 5-11-2012 which is also after the prescribed time limit. The reported judgment cited as 2013 PTD (Trib.) 1169 is also on all fours to the case of the taxpayer. The relevant extract of the said judgment is reproduced for sake of convenience as under:-- "Notice under section 122(9) of the Ordinance was issued on 13-5-2010 which was duly responded by the taxpayer with the contention that deemed assessment in the case stood made on the date of filing of return (29th September, 2009) and as per law prevailing at that point of time, amended assessment could only be made within five years i.e. upto 29th September, 2009 and that amendment brought to subsection (2) of section 122 of the Ordinance by Finance Act, 2009, whereby limitation was extended upto the expiry of five years from the end of the financial year in which the Commissioner has issued the assessment order to the taxpayer would not be applicable in the case." 6. For the foregoing reasons and in view of the supra judgement, we are constrained to observe that the amended assessment order is time barred, hence not maintianble in the eye of law. Therefore, the order passed by the learned CIR(A) is hereby vacated and the amended assessment order dated 30-6-2013 is cancelled. 7. Since we have decided the case purely on the legal ground hence other grounds need not to be discussed. 8. It is ordered accordingly. CMA/112/Tax(Trib.) Appeal accepted.

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