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I. T. A. No. 726/KB of 1980‑81, decided on 27th April, 1982.

‑‑‑ S. 66‑A‑Completion of assessment under S. 23(3), Income‑tax Act (XI of 1922)‑‑‑Assessment set aside by Appellate assistant Commissioner on appeal‑Inspecting Assistant Commissioner on scrutiny of record forming opinion that assesment made by Income‑tax Officer was erroneous in so far as it was prejudicial to interest of revenue and issu ing show cause notice‑None attended office on date fixed by Inspecting Assistant Commissioner‑Inspecting Assistant Commissioner passing order cancelling order of assessment and directing Income‑tax Officer to make fresh assessment‑Held: Assessment order which was set aside by Appellate Assistant Commissioner became non‑existent on day Appellate Assistant Commissioner passed order‑Inspecting Assistant Commissioner, therefore, was not legally competent to issue notice under S. 66‑A, Income‑tax Ordinance, 3979 (or S. 34‑A, Income‑tax Act, 1922) and pass order pursuant to said illegal notice in respect of assessment order passed on by Income‑tax Officer and set aside by Appellate Assistant Commissioner in appeal.

Mahmood A. Hashmey for Appellant.

Abrar Ahmad, D. R. for Respondent.

Date of hearing: 27th April, 1982.

The assessee, an Association of Persons, who is engaged in the business of scooters and rickshaws, has brought this appeal from the order of the learned Inspecting Assistant Commissioner, East Zone, Karachi assailing the legality and propriety of the impugned order. It relates to the charge year 1976‑77.

2. The facts admitted at the bar in so far as they are relevant for this appeal are these. The Income‑tax Officer, Circle P, East Zone, Karachi com pleted the assessment for the year under appeal under section 23(3) on 27‑6‑1978 of the repealed Income‑tax Act, 1922 on an income of Rs. 73,867. The assessee went in appeal against the assessment thus made on it before the learned Appellate Assistant Commissioner, 'E' Range, K... who set aside the assessment by his impugned order, dated 2nd October, 1980. The Inspecting Assistant Commissioner, upon scrutiny of the record, formed an opinion that the assessment, as made by the Income‑tax Officer on 27th June, 1978, was erroneous in so far as it was prejudicial to the interest of revenue. He, therefore, issued a show‑cause notice on 14th October, 1980 fixing the hearing of the case on 23rd October, 1980. None attended on that date before him on behalf of the assessee. He, therefore, passed en order on 25th October, 1980 cancelling the order of assessment and directing the Income‑tax Officer to make fresh assessment.

3. I have heard the parties' representatives. From the facts narrated above, it is evident that it was on 2nd of October, 1980 that the order of assessment was set aside by the Appellate Assistant Commissioner hence it became non‑existent on that date. The Inspecting Assistant Commissioner was, therefore, not legally competent to issue a notice under section 66‑A of the Income‑tax Ordinance, 1979 (or a notice under section 34‑A of the repealed Income‑tax Act, 1922) on 14th. October, 1980, in respect of the assessment order dated 27th June, 1978. Consequently, he was not vested with the legal jurisdiction to pass the impugned order pursuant to the said illegal notice on 25th October, 1980. The learned Departmental Representative was unable to raise any plausible argument in support of the impugned order. I am satisfied that consequent to the passing of the order by the learned Appellate Assistant Commissioner on assessee's appeal earlier than 25th October, 1980, there was no order of assessment then existing so as to enable the Inspecting Assistant Commissioner to exercise jurisdiction under sec tion 66‑A of the Ordinance, or section 34‑A of the repealed Act.

4. In the result, the appeal succeeds and the impugned order of the learned Appellate Assistant Commissioner is cancelled.

M. Z. M Appeal accepted.

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