Find a Lawyer

I . T . A . No. 1528/LB/ 1985-86, decided on 4th September, 1986.

---S.33--Appeal--Income-tax Ordinance (XXXI of 1979), S.132 Appellant not appearing at the time of hearing of appeal--Ex parte decision of appeal--Appellate Authority, held, has to pass a speaking order irrespective of the fact that no appearance was made by appellant-- Appeal has to be decided on merits while proceedings ex parts, against appellant.

---S. 33--Income-tax Ordinance (XXXI of 1979), S. 132--Addition- Approval of I.A.C. not obtained by I.T.O.--Effect--Appeal--Ex parte decision against appellant on default in appearance--Procedure--Appeal, held, was to be decided on basis of existing material and if there was any legal flaw in the assessment order, same was not to be allowed to be filled up by affording fresh opportunity to the Income-tax Officer- Order passed without approval of I.A.C. was vacated and matter was remitted to A.A.C. for de novo decision on merits in accordance with law.

Siraj-ud-Din Khalid for Appellant.

Muhammad Munir Qureshi, A.C./D.R. for Respondent.

--In this further appeal relating to assessment year 1976-77 order passed by the learned Appellate Assistant Commissioner of Income-tax, dated 30th March, 1985 has been assailed at the instance of the assessee.

2. The facts of the case that the assessee, an individual, derived income from property and share in Messrs I.P. The Income-tax Office determined the assessee's property income at Rs.13,824 and share income Rs.11,575. There is no dispute to that effect. Over and above that an addition of Rs.45,000 was made by the Income-tax Officer as unexplained investment. On appeal the first appellate authority while passing a combined order for the charge years 1976-77 to.1981-82 vacated the assessments for both the years as none had turned up to pursue the matter on the fixed date of hearing.

3. The assessee's grievance is that addition made at Rs.45,000 under section 4(2) of the Repealed Income-tax, 1922 (hereinafter called the Act) was without jurisdiction having been made without prior approval of the learned Inspecting Assistant Commissioner. Reliance in this behalf was placed on decided case law as well.

4. After hearing the appellant's Authorised Representative as well as the Departmental Representative, I feel that the first appellate authority erred in not passing a speaking order. Irrespective of the fact that no appearance was made by the assessee at the time of hearing of first appeal, the appeal should have been decided on merits while proceeding ex parte against the appellant and on the basis of grounds of appeal as in this case only one issue of addition of Rs.45,000 made under section 4(2) of the Act was agitated. The same should have been decided on merits by the learned Appellate Assistant Commissioner after ascertaining the legal formalities required for making such additions. If addition could be made with prior approval of the learned Inspecting Assistant Commissioner and the same was not forthcoming, the first appellate authority should have deleted the same. In any case there was no justification for setting aside the assessment while giving fresh lever in the hands of the Income-tax Officer to cover up the lacuna omitted in the original assessment made on 28th June, 1979. The law on the point is that appeals are to he decided on the basis of existing material and if there is any legal flaw in the assessment order, the same is not to be allowed to be filled up by affording fresh opportunity to the Income-tax Officer. In this view of the matter, I vacate the impugned order and remit the matter to the learned Appellate Assistant Commissioner for de novo decision on merits in accordance with law. As a result the Appeal succeeds accordingly.

M.B.A./367/T Order accordingly.

Find a Lawyer Near You

Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.