Hoque & Sons Limited Vs. National Board of Revenue and others 2017 (2) LNJ 151

Case No: Writ Petition No. 6800 of 2013 with Writ Petition No. 6801 of 2013

Judge: A. F. M. Abdur Rahman. J.

Court: High Court Division,

Advocate: Mr. Mosharaf Hossain, Mr. S. Rashed Jahangir,

Citation: 2017 (2) LNJ 151

Case Year: 2014

Appellant: Hoque & Sons Limited

Respondent: National Board of Revenue and others

Subject: Writ Jurisdiction

Delivery Date: 2017-10-17

HIGH COURT DIVISION

(SPECIAL ORIGINAL JURISDICTION)

 

AFM Abdur Rahman, J.

And

Md. Emdadul Haque Azad, J.

Judgment on

01.07.2014 and 02.07.2014

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Hoque & Sons Limited (a private limited company) 1267/A Agrabad Commercial Area, Rumana Hoque Tower, Goshaildanga, Dist-Chittagong represented by it’s Managing Director Mr. Enamul Haque Chowdhury.

...Petitioner.

-Versus-

1.     National Board of Revenue, NBR Building Segunbagicha, Dhaka represented by it’s Chariman.

2.     Commissioner of Taxes, Taxes Zone-03, Chittagong, CGO Building No. 2, Agrabad Police Station Doublemooring, District-Chittagong.

3.     Deputy Commissioner of Taxes, Circle-52(companies), Taxes Zone-03, (10th Storied building) 3rd floor, Agrabad, Police Station Doublemooring, Dist-Chittagong.

...Respondents.

Constitution of Bangladesh, 1972

Article 102

Income Tax Ordinance (XXXVI of 1984)

Sections 83 and 93

Reopening of past and closed assessment of tax liability under this section is burning question of interpretation of law- In order to reopening past and closed transaction under this section, DCT can serve notice upon assessee in case of having definite information of concealment of income which is chargeable to tax in any of the assessment years within 5 years from date. Whether a loan liability is chargeable to tax or not , is question of law as decided in leading case Shaheda Chowdhury Vs. National Board of Revenue & others, 59 DLR (2007) 213 that a bank loan remains always liability, therefore, it cannot be deemed to be an income chargeable to tax. Any money invested in renovation of house of assesseee out of a bank loan shall not income chargeable to tax. Income must be examined whether it is chargeable to tax. Income chargeability to tax is gateway to consider an amount, alleged to have been concealed in order to disclose reopening of any past and closed assessment made earlier from which income either eascaped from assessement or income are too low at rate or has been subject of excessively relief or fund. The treating of the loan amount as chargeable to tax is a palpable illegality being not the intention of law and as such issuance of notice under section 93 of the Ordinance of 1984 is without any lawful authority.     . . . (1 and 16 to 19)

Mr. Mosharaf Hossain, Adv.

... For the petitioner.

Mr. S. Rashed Jahangir, D.A.G. with

Ms. Nasrin Parvin Shefali, A.A.G. with

Mr. Saikat Basu, AAG

...For the Respondents.

JUDGMENT

A.F.M. Abdur Rahman, J: These two rule Nisi, issued by this court on 20.07.2013 under the provision of Article 102 of the Bangladesh Constitution, have been heard analogously as the same involved identical question of law, and both of them are now disposed off by this single judgment.

2.            A very pertinent question as to reopening of past and closed assessment of tax liability under the provision of section 93 of the Income Tax Ordinance 1984, has been raised in these two writ petition No. 6800 of 2013 and 6801 of 2013 relating to the assessment year 2008-2009 respectively, by the Assessee-writ-petitioner ‘Haque & Sons Ltd.’, which obtained both the instant rule Nisi in the following terms;-

Let a Rule Nisi be issued calling upon the respondents to show cause as to why the impugned Notice being e¢b ew-376-200-0852/p¡-52/(Lw)/LxAx-3(QVÊ)/2010-2013/612 under section 93 of the Income Tax Ordinance 1984 issued by the Deputy Commissioner of Taxes, Circle-52(companies) Taxes Zone-03, Chittagong for re-opening of income tax case of the petitioner for the assessment year 208-2009 (annexure-A) and statutory notice i.e. (IT-90) asking the petitioner to submit income tax return for the assessment year 2008-2009 shall not be declared illegal, without lawful authority and are of no legal effect and/or pass such other or further order or orders as to this court may seem fit and proper.

3.            It has been asserted in both the writ petition that the Assessee-writ petitioner is a regular income tax assessee and a private limited company, having Tax Identification Number (TIN): 376-200-0852/p¡-52 (Co.), Chittagong, and engaged in the business of shipping agencies, Commission business, Buying business and Crews recruitment etc. and derives income from those sources. The Assessee-writ petitioner submitted its income tax return for the assessment year 2008-2009 and 2009-2010 along with audited account showing a total income of Tk. 5,18,373.00 and 5,12,427.00 respectively and the DCT concern upon hearing the authorized representative of the Assessee-writ petitioner and considering the documents and evidence supporting the accounts assessed the income of the Assessee-writ petitioner at an amount of tk. 77,30,395.00 and tk. 47,79,935.00 respectively against which the Assessee-writ petitioner preferred an Appeal before the Commissioner of Taxes (Appeal), who reduced the income of the Assessee-writ petitioner at an amount of Tk. 68,13,760.00, for the assessment year 2008-2009 and at tk. 47,99,435.00 for the assessment year 2009-2010 which having prejudiced the Assessee-writ petitioner a second appeal was preferred by the assessee-wrti petitioner before the Taxes Appellate Tribunal, Chittagong, which disposed of the appeal determining the income of the Assessee-writ petitioner at more reduced amount of Tk. 67,56,760.00 for the assessment year 2008-2009 and tk. 44,90,735.00 for the assessment year 2009-2010. Thereafter, the Assessee-writ petitioner preferred income tax reference application No. 24 of 2011 before the High Court Division which is now pending before this court.

4.            Despite such facts, the DCT concern issued two notices under section 93 of the Income Tax Ordinance 1984, being e¢b ew-376-200-0852/p¡-52(®L¡w)/LA-3(Q–)/2012-2013/613 and 613 dated 12.06.2013 upon the Assessee-writ petitioner company, asking to submit fresh income tax return for the assessment year 2008-2009 and 2009-2010 for the purpose of reassessment of income of the Assessee-writ petitioner company, for the said assessment year 2008-2009 and 2009-210 under the provision of section 93 of the income Tax ordinance 1984 on the ground that tax evasion has been found by the DCT concern.

5.            Challenging the said notices, the Assessee-writ petitioner preferred the instant writ petition and obtained the instant two rule Nisi, as aforementioned.

6.            Upon service of the notice of the rule Nisi, the learned Assistant Attorney General Ms. Nasrin Parvin and Mr. Saikat Basu appeared on behalf of the taxes department and submitted affidavit-in-opposition in both the writ-petition, wherein it has been claimed that the Assessee-writ petitioner did not disclose particulars of loan account No. 002900119 maintained with the Exim Bank Ltd. wherein Tk. 4,25,449.00 is the current liability and the petitioner deposited huge amount of money in the said account during the assessment years, which had not been disclosed in the accounts books as well as the audited report and as such the audited report submitted by the writ petitioner appears to be inaccurate. Therefore the assessment as made by the DCT concern for the assessment year 2008-2009 and 2009-2010 are liable to be reopened under the provision of section 93 of the Income Tax Ordinance 1984.

7.            The learned Advocate Mr. Mosharaf Hossain appeared on behalf of the Assessee-writ petitioner, while the learned Assistant Attorney General Mr. Saikat Basu represented the taxes department at the time of hearing of the rule Nisi.

8.            The learned Advocate Mr. Mosharaf Hossain while taken this court to the impugned notice, Annexure-A, i.e., the letter written by the DCT concern, Circle-52(companies), Taxes Zone-03, Chittagong, along with the formatted notice under section 93 of the Income Tax Ordinance 1984, strenuously argued that the past and closed assessment made under section 83 of the Income Tax Ordinance 1984 can only be reopened under the provision of section 93 of the Income Tax Ordinance 1984, when definite information as to concealment of income chargeable to tax is detected by the concerned DCT and in no other way. But in the instant case the DCT concern has discovered so called loan account of the Assessee-writ petitioner, transacted during the period of 1.07.2005, 30.06.2006 in the Exim Bank Ltd. which not being chargeable to tax, cannot treated as the basis for invocation of power available under the provision of section 93 of the Income Tax Ordinance 1984 and therefore the issuance of notice Annexure-A, is a palpable illegality. The learned Advocate Mr. Mosharaf Hossain in this respect relied upon the decision made in the case Shahella Chowdhury –vs- National Board of Revenue, reported in 59 DLR(2007) 213 and also the case of Dr. Mohammad Moniruzzaman –vs- National Board of Revenue in writ petition No. 3460 of 2011.

9.            On the other hand the learned Assistant Attorney General Mr. Saikat Basu while taken this court through the content of the Annexure-A, argued that the DCT concern after completion of the assessment for the assessment year 2008-2009, discovered concealment of income by the Assessee-writ petitioner arising out a loan account, being 00392400000119 with the Exim Bank Ltd. which have outstanding liability of Tk. 43,53,449.00 and therefore the issuance of the notice under section 93 of the Income Tax Ordinance 1984 is quite lawful and therefore the instant rules nisi are liable to be discharged.

10.        We have heard the learned Advocate, perused the materials on record.

11.        It appears that admittedly the assessment for the year 2008-2009 became a past and closed transaction on the date of issuance of Annexure-A, on 12.06.2013, appended to the writ petition No. 6801 of 2013 as appears from paragraph No. 2 of the Annexure-A, which states as follows;

Llc¡a¡ ®L¡Çf¡e£ ¢hNa 01-02-2009 a¡¢l­M 2008-2009 Llh­oÑl SeÉ ®j¡V Bu 5,18,373/- V¡L¡ fËcnÑe f§hÑL A¢XV ¢l­f¡VÑ pq BuLl ¢lV¡eÑ c¡¢Mm L­lz j¡jm¡¢V BuLl AdÉ¡­c­nl 83(2) d¡l¡u ®j¡V Bu 77,30,395/- V¡L¡ ¢el©fe f§hÑL 01-10-2009 Cw a¡¢l­M ¢eÖfæ Ll¡ quz Llc¡a¡ ®L¡Çf¡e£ Eš² B­c­nl ¢hl¦­Ü Bf£m c¡­ul Ll­m Bf£m B­cn ®j¡a¡­hL BuLl AdÉ¡­c­nl 83(2)/156 d¡l¡u ®j¡V Bu 68,13,760/- V¡L¡ ¢el¦fe f§hÑL 11-02-2010 Cw a¡¢l­M ¢eÖfæ Ll¡ quz flhaÑ£­a VÊ¡Ch¤e¡m B­cn ®j¡a¡­hL BuLl AdÉ¡­c­nl 83(2)/156/159 d¡l¡u ®j¡V Bu 67,56,760/- V¡L¡ ¢el¦fe f§hÑL 29-11-2010 Cw a¡¢l­M ¢eÖfæ Ll¡ quz

12.        Similarly the assessment for the year 2009-2010 also became past and closed transaction, as appears from Annexure-A, dated 12.06.2013 paragraph No. 2, which reads as follows;

Llc¡a¡ ®L¡Çf¡e£ ¢hNa 28-02-2010 a¡¢l­M 2009-2010 Llh­oÑl SeÉ ®j¡V Bu 7,47,281/- V¡L¡ fËcnÑe f§hÑL A¢XV ¢l­f¡VÑ pq BuLl ¢lV¡eÑ c¡¢Mm L­lz j¡jm¡¢V BuLl AdÉ¡­c­nl 83(2) d¡l¡u ®j¡V Bu 47,79,935/- V¡L¡ ¢el©fe f§hÑL 30-12-2010 Cw a¡¢l­M ¢eÖfæ Ll¡ quz Llc¡a¡ ®L¡Çf¡e£ Eš² B­c­nl ¢hl¦­Ü Bf£m c¡­ul Ll­m Bf£m B­cn ®j¡a¡­hL BuLl AdÉ¡­c­nl 83(2)/156 d¡l¡u ®j¡V Bu 47,99,453/- V¡L¡ ¢el¦fe f§hÑL 14-06-2010 Cw a¡¢l­M ¢eÖfæ Ll¡ quz flhaÑ£­a VÊ¡Ch¤e¡m B­cn ®j¡a¡­hL BuLl AdÉ¡­c­nl 83(2)/156/159 d¡l¡u ®j¡V Bu 44,90,753/- V¡L¡ ¢el¦fe f§hÑL 10-01-2010 Cw a¡¢l­M ¢eÖfæ Ll¡ quz

13.        Annexure –A, in both the writ petitions have been challenged as has been issued without any lawful authority, the content of which are reproduced below for better appreciation;

Annexure-A, in Writ Petition No. 6800 of 2013

NZfËS¡a¿¹£ h¡wm¡­cn plL¡l

Ef-Ll L¢jne¡­ll L¡kÑ¡mu

p¡­LÑm-52 (­L¡Çf¡e£S), Ll A’m-3, Q–NË¡jz

e¢b ewx 376-200-0852/p¡(®L¡w)/LA-3(Q–)/ 2012-2013/612   a¡¢lM-12/06/2013 Cw

fËd¡e LjÑLaÑ¡

qL Hä p¾p ¢mx

1267/H l¦j¡e¡ qL V¡Ju¡l,

­N¡p¡CmX¡‰¡, BNË¡h¡c h¡/H,

Q–NË¡jz

¢houx Llc¡a¡ ®L¡Çf¡e£ qL Hä p¾p ¢mx (¢V BC Hex 376-200-0852) Hl 2008-2009 Llh­oÑl j¡jm¡ f§ex E­Çj¡Qe fËpw­Nx

------------------------------------------------------

  1. Efk¤š² ¢ho­u Bfe¡l cª¢ÖV BLÑoe Ll¢Rz
  2. Llc¡a¡ ®L¡Çf¡e£ ¢hNa 01-02-2009 a¡¢l­M 2008-2009 Llh­oÑl SeÉ ®j¡V Bu 5,18,373/- V¡L¡ fËcnÑe f§hÑL A¢XV ¢l­f¡VÑ pq BuLl ¢lV¡eÑ c¡¢Mm L­lz j¡jm¡¢V BuLl AdÉ¡­c­nl 83(2) d¡l¡u ®j¡V Bu 77,30,395/- V¡L¡ ¢el¦fe f§hÑL 01-10-2009 Cw a¡¢l­M ¢eÖfæ Ll¡ quz Llc¡a¡ ®L¡Çf¡e£ Eš² B­c­nl ¢hl¦­Ü Bf£m c¡­ul Ll­m Bf£m B­cn ®j¡a¡­hL BuLl AdÉ¡­c­nl 83(2)/156 d¡l¡u ®j¡V Bu 68,13,760/- V¡L¡ ¢el¦fe f§hÑL 11-02-2010 Cw a¡¢l­M ¢eÖfæ Ll¡ quz flhaÑ£­a VÊ¡Ch¤e¡m B­cn ®j¡a¡­hL BuLl AdÉ¡­c­nl 83(2)/156/159 d¡l¡u ®j¡V Bu 67,56,760/- V¡L¡ ¢el¦fe f§hÑL 29,-11-2010 Cw a¡¢l­M ¢eÖfæ Ll¡ quz
  3. ¢hNa 30-04-2012 Cw a¡¢l­M B­m¡QÉ ®L¡Çf¡e£l f¢lQ¡mL Se¡h Hjc¡c¤m qL ®Q±d¤l£l hÉ¡wL ¢qp¡h pwNË­ql SeÉ ­fË¢la f­œl f¢l­fË¢r­a H¢„j hÉ¡wL BNË¡h¡c n¡M¡ Hhw Lj¡¢nÑu¡m hÉ¡wL Ah ¢pme, BNË¡h¡c n¡M¡ q­a f¢lQ¡m­Ll p¡­b pw¢nÔÖVa¡l p§­œ qL Hä p¾p ¢mx Hl ¢LR¤ hÉ¡wL ¢hhle£l L¢fJ ®fËlZ L­lez hÉ¡wL ¢hhle£ fkÑ¡­m¡Qe¡u ®cM¡ k¡u ®k, Llc¡a¡ ®L¡Çf¡e£ 01-07-2005 Cw q­a 30-06-2006 Cw fkÑ¿¹ pj­u H¢„j hÉ¡w­L ®j¡V 2 ¢V Hhw Lj¡¢nÑu¡m Ah ¢pme hÉ¡w­L 1 ¢V GZ ¢qp¡h f¢lQ¡me¡ L­l­R k¡l phL¢V­a 30-06-2006 Cw a¡¢l­Ml ¢Øb¢a/c¡u ¢ejÀl¦fx-

œ²¢jL ew

hÉ¡wL ¢qp¡h ew

Sj¡

Ge¡aÄL ¢Øb¢a

j¿¹hÉ

H¢„j hÉ¡wL ¢mx

1.

00392400000119

21,80,000/-

42,53,449/-

fËc¢nÑa qu¢e Hhw BC ¢V-88 ®a ¢h­h¢Qa qu¢ez

2.

00391700000630

1,76,00,000/-

2,40,23,7000/-

fËc¢nÑa q­u­R J BC¢V-88 ®a ¢h­h¢a q­u­Rz

Lj¡¢nÑu¡m hÉ¡wL ¢mx

3.

1803000399

40,40,51,979/-

39,99,552/-

fËc¢nÑa q­u­R J BC¢V-88­a ¢h­h¢Qa q­u­Rz

 

­j¡V

42,38,31,979/-

3,22,76,701/-

 

 

B­m¡QÉ pLm GZ ¢qp¡­h ®j¡V Sj¡l f¢lj¡e= 42,38,31,979/- V¡L¡z

  1. Ef­l¡š² fkÑ¡­m¡Qe¡ qC­a ®cM¡ k¡u ®k, Llc¡a¡ ®L¡Çf¡e£ a¡l hÉ¡­m¾p n£­Vl Aw­n Ge ®c¢M­u­Rz H¢„j hÉ¡w­Ll ¢qp¡h ew 630 ®a 2,40,23,700/- V¡L¡ Hhw Lj¡¢nÑu¡m hÉ¡wL Ah ¢p­m¡e Hl 339 ¢qp¡­h 39,99,552/- V¡L¡ pq ®j¡V 2,80,23,253/- V¡L¡z k¡ 01-10-2009 Cw a¡¢l­M pÇf¡¢ca BC ¢V-88­a B­m¡¢Qa J ¢h­h¢Qa q­u­Rz ¢L¿º H¢„j hÉ¡w­Ll AeÉ 1¢V ¢qp¡­hl Ah¢nÖV GZ hÉ¡­m¾p 42,53,449/- V¡L¡ fËcnÑe Ll¡ qu¢e Hhw BC ¢V-88­a a¡ B­m¡¢Qa h¡ ¢h­h¢QaJ qu¢ez AbÑ¡v Eš² Aw­Ll c¡u AfËc¢nÑa  ®l­M j¤ma pj f¢lj¡e pÇfc ab¡  Bu ®N¡fe Ll¡ q­u­Rz

Bh¡l ®L¡Çf¡e£l ®VÊ¢Xw ¢qp¡h fkÑ¡­m¡Qe¡u ®cM¡ k¡u ®k, ®j¡V ¢l¢pÃV ®cM¡­e¡ q­u­R 3,26,31,530/- V¡L¡z hÉ¡wL Sj¡ ®kje ¢lV¡­eÑ k¡ A¢XV ¢l­f¡­VÑ ®L¡e hÉ¡MÉ¡ ®ce¢e ®aj¢e Ll ¢edÑ¡le£ B­c­nJ H Sj¡ ¢ho­u ®L¡e B­m¡Qe¡ Ll¡ qu¢e, ¢h­h¢QaJ qu¢ez

  1. Hja¡hØb¡u, GZ ¢Øb¢a 42,53,449/- V¡L¡ c¡u ¢qp¡­h fËcnÑe e¡ L­l j¤ma pj f¢lj¡e Bu ®N¡f­el j¡dÉ­j Hhw fËL«a ®l¢i¢eE ¢l¢pÃV ®N¡fe L­l fËL«a Bu ®N¡f­el j¡dÉ­j fË­cu Ll gy¡¢L ®cu¡u EÜaÑe La«Ñf­rl Ae¤­j¡cœ²­j Bfe¡­cl 2008-2009 Llh­oÑl j¡jm¡ BuLl AdÉ¡­c­nl 93 d¡l¡u f§Zx E­Çj¡Qe Llax Hacpw­N 93 d¡l¡l ®e¡¢Vn ®fËlZ Ll¡ q­m¡z

(j¤l¡c Bq­jc)

Ef-Ll L¢jne¡l

p¡­LÑm-52 (­L¡Çf¡e£S), Ll A’m-3,

Q–NË¡jz

Annexure-A in Writ Petition No. 6801 of 2013.

NZfËS¡a¿¹£ h¡wm¡­cn plL¡l

Ef-Ll L¢jne¡­ll L¡kÑ¡mu

p¡­LÑm-52 (­L¡Çf¡e£S), Ll A’m-3, Q–NË¡jz

e¢b ewx 376-200-0852/p¡(®L¡w)/LA-3(Q–)/2012-2013/613   a¡¢lM-12/06/2013 Cw

fËd¡e LjÑLaÑ¡

qL Hä p¾p ¢mx

1267/H l¦j¡e¡ qL V¡Ju¡l,

­N¡p¡CmX¡‰¡, BNË¡h¡c h¡/H,

Q–NË¡jz

¢houx Llc¡a¡ ®L¡Çf¡e£ qL Hä p¾p ¢mx (¢V BC Hex 376-200-0852) Hl 2009-2010 Llh­oÑl j¡jm¡ f§ex E­Çj¡Qe fËpw­Nx

---------------------------------------------------------------

Efk¤š² ¢ho­u Bfe¡l cª¢ÖV BLÑoe Ll¢Rz

  1. Llc¡a¡ ®L¡Çf¡e£ ¢hNa 28-02-2010 a¡¢l­M 2009-2010 Llh­oÑl SeÉ ®j¡V Bu 7,47,281/- V¡L¡ fËcnÑe f§hÑL A¢XV ¢l­f¡VÑ pq BuLl ¢lV¡eÑ c¡¢Mm L­lz j¡jm¡¢V BuLl AdÉ¡­c­nl 83(2) d¡l¡u ®j¡V Bu 47,79,935/- V¡L¡ ¢el¦fe f§hÑL 30-12-2010 Cw a¡¢l­M ¢eÖfæ Ll¡ quz Llc¡a¡ ®L¡Çf¡e£ Eš² B­c­nl ¢hl¦­Ü Bf£m c¡­ul Ll­m Bf£m B­cn ®j¡a¡­hL BuLl AdÉ¡­c­nl 83(2)/156 d¡l¡u ®j¡V Bu 47,99,453/- V¡L¡ ¢el¦fe f§hÑL 14-06-2010 Cw a¡¢l­M ¢eÖfæ Ll¡ quz flhaÑ£­a VÊ¡Ch¤e¡m B­cn ®j¡a¡­hL BuLl AdÉ¡­c­nl 83(2)/156/159 d¡l¡u ®j¡V Bu 44,90,753/- V¡L¡ ¢el¦fe f§hÑL 10-01-2012 Cw a¡¢l­M ¢eÖfæ Ll¡ quz
  2. ¢hNa 30-04-2012 Cw a¡¢l­M B­m¡QÉ ®L¡Çf¡e£l f¢lQ¡mL Se¡h Hjc¡c¤m qL ®Q±d¤l£l hÉ¡wL ¢qp¡h pwNË­ql SeÉ ­fË¢la f­œl f¢l­fË¢r­a H¢„j hÉ¡wL BNË¡h¡c n¡M¡ Hhw Lj¡¢nÑu¡m hÉ¡wL Ah ¢pme, BNË¡h¡c n¡M¡ q­a f¢lQ¡m­Ll p¡­b pw¢nÔÖVa¡l p§­œ qL Hä p¾p ¢mx Hl ¢LR¤ hÉ¡wL ¢hhle£l L¢fJ ®fËlZ L­lez hÉ¡wL ¢hhle£ fkÑ¡­m¡Qe¡u ®cM¡ k¡u ®k, Llc¡a¡ ®L¡Çf¡e£ 01-07-2005 Cw q­a 30-06-2006 Cw fkÑ¿¹ pj­u H¢„j hÉ¡w­L ®j¡V 2 ¢V Hhw Lj¡¢nÑu¡m Ah ¢pme hÉ¡w­L 1 ¢V GZ ¢qp¡h f¢lQ¡me¡ L­l­R k¡l phL¢V­a 30-06-2006 Cw a¡¢l­Ml ¢Øb¢a/c¡u ¢ejÀl¦fx-

œ²¢jL ew

hÉ¡wL ¢qp¡h ew

Sj¡

Ge¡aÄL ¢Øb¢a

j¿¹hÉ

H¢„j hÉ¡L ¢mx

1.

00392400000119

47,66,205/-

000

fËc¢nÑa qu¢e Hhw BC ¢V-88 ®a ¢h­h¢Qa qu¢ez

2.

00391700000630

1,21,00,000/-

000

fËc¢nÑa qu¢e Hhw BC ¢V-88 ®a ¢h­h¢Qa qu¢ez

3.

00391700000231

50,66,666/-

000

 

Lj¡¢nÑu¡m hÉ¡wL Ah ¢pme

4.

1803000399

58,78,16,471/-

000

fËc¢nÑa q­u­R J BC¢V-88­a ¢h­h¢Qa q­u­Rz

 

­j¡V

60,97,49,342/-

000

 

           

B­m¡QÉ pLm GZ ¢qp¡­h ®j¡V Sj¡l f¢lj¡e=60,97,49,342/- V¡L¡z

  1. Ef­l¡š² fkÑ¡­m¡Qe¡ qC­a ®cM¡ k¡u ®k, Llc¡a¡ ®L¡Çf¡e£l H¢„h hÉ¡wL ¢mx Hl ®j¡V Sj¡ 2,19,32,871/- V¡L¡ ¢lV¡­eÑ fËcnÑe Ll¡ qu¢e Hhw BC ¢V-88­a a¡ B­m¡¢Qa h¡ ¢h­h¢Qa qu¢ez AbÑ¡v Eš² Aw­Ll Sj¡ AfËc¢nÑa  ®l­M fËL«a ®l¢i¢eE ¢l¢pÃV ®N¡fe L­l fËL«a Bu ®N¡f­el j¡dÉ­j fË­cu Ll gy¡¢L ®cu¡u EÜaÑe La«Ñf­rl Ae¤­j¡ceœ²­j Bfe¡­cl 2009-2010 Llh­oÑl j¡jm¡ BuLl AdÉ¡­c­nl 93 d¡l¡u f§Zx E­Çj¡Qe Llax Hacpw­N 93 d¡l¡l ®e¡¢Vn ®fËlZ Ll¡ q­m¡z

(j¤l¡c Bq­jc)

Ef-Ll L¢jne¡l

p¡­LÑm-52 (­L¡Çf¡e£S), Ll A’m-3,

Q–NË¡jz

14.        Annexure-A, states that the DCT concern while directed the Exim Bank and Commercial Bank of Ceyloan, Agrabad Branch, Chittagong, to furnish bank statement of the Director of the Assessee-writ petitioner company Mr. Emdadul Haque Chowdhury maintained with the bank, both the bank furnished statements wherefrom it appears that the petitioner maintained three bank accounts, being No. 00392400000119 with the Exim Bank wherein the loan liability of Tk. 42,53,449.00 was not disclosed and accordingly not considered in IT-88, although two different accounts maintained with the Exim Bank Ltd. being No. 00391700000630 and with the Commercial Bank of Ceyloan Ltd. being No. 1803000339 were disclosed and considered in the IT-88.

15.        Upon considering the Annexure-A, it appears that the DCT concern has found the bank account No. 00392400000119 of the Exim bank Ltd. to be a loan account, having a loan liability of Tk. 42,53,449.00 in the name of the Assessee-writ petitioner company as on 30.06.2006.

16.        In order to reopen a past and closed transaction the provision of section 93 of the Income Tax Ordinance 1984 empowered the DCT concern to serve a notice upon the Assessee-writ petitioner, if definite information has come to his possession as to any concealment of income which is chargeable to tax in any of the assessment years within five years from date. The said provision of section 93 of the Income Tax Ordinance 1984 reads as follows;

Income Tax Ordinance 1984

Section 93:  Assessment in case of income escaping

assessment, etc.—

1)      If, for any reason income chargeable to tax for any assessment year has escaped assessment or has been under assessed or has been assessed at too low a rate or has been the subject of excessive relief or refund under issue a notice to the assessee containing all or any of the requirements which may be included in a notice under an order in writing, the total income of the assessee or the tax payable by him, as the case may be, and all the provisions of this Ordinance shall, so far as may be, apply accordingly:

2)      No proceeding under sub-section (1) shall be initiated unless definite information has come into the possession of the Deputy Commissioner of Taxes and he has obtained the previous approval of the Inspecting Joint Commissioner in writing to do so, except in a case where a return has not been filed under section 75 or 77.

3)      A notice under sub-section (1) may be issued by the Deputy Commissioner of Taxes,-

a)      In any case in which he has reason to believe that the assessee or any other person on his behalf has not filed a return under section 75 or 77, at any time.

b)      In any case in which he has reason to believe that the assessee has for any assessment year concealed the particulars of his income or furnished inaccurate particulars thereof or omitted or failed to disclose all material facts necessary for the assessment for such year, within five years from the end of the assessment year for which the assessment is to be made:

Provided that in a case where a fresh assessment is made for any assessment year in pursuance of an order [sections 120, 121A, 156 or 159], the period of five years referred to in this clause shall commence from the end of the year in which the fresh assessment is made.

c)      In any other case, within two years from the end of the assessment year for which the assessment is to be made.

4)      In computing the period of limitation for the purpose of making an assessment or taking any other proceedings under this Ordinance, the period, if any, for which such assessment or other proceedings has been stayed by any Court, tribunal or any other authority, shall be exclude.

5)      Notwithstanding anything contained in sub-section (3), where an assessment or any order has been annulled, set aside, cancelled or modified, the concerned income tax authority may start the proceedings from the stage next preceding the stage at which such annulment, setting aside, cancellation or modification took place, and nothing contained in this Ordinance shall render necessary the re-issue of any notice which has already been issued or the re-furnishing or refilling or any return, statement or other particulars which has already been furnished or filed, as the case may be.

17.        Whether a loan liability is chargeable to tax has been considered in the referred case of Shahella Chowdhury –vs- National Board of Revenue and others, reported in 59 DLR(2007) 213, wherein this bench, differently constituted by their lordships Mr. Justice Abdur Rashid and Mr. Justice Miftahuddin Chowdhury, while considering the issue as to the chargeability to tax of any loan account, held in paragraph No. 22 and  24 as under;

“22.  It is needless to note that a bank loan remains always a liability and therefore shall never be deemed to be an income chargeable to tax. Any money spent and/or invested in the renovation of house of the assessee out of a bank loan shall not deem to be income chargeable to tax. Such money out of the bank loan may cause increase cost of the house originally shown in the asset side of the statement of assets and liabilities, but shall have to be deducted as liability to work  out the net worth of the assets in the period in question. The fund to be used in future for repayment of such bank loan if not accounted for then so much of the fund that is used in the repayment of the bank loan and not accounted for may be included as “income from other sources”

24.    The Deputy Commissioner of Taxes therefore acted beyond his jurisdiction to work out the money used and invested out of a bank loan in the renovation of house as an increase of assets and ultimately, in assessing so-called increase as “income from other sources” under sub-section (1) of section 19 read with section 33 of the Ordinance. Upon such wrong view of the law, he equally acted in excess of his jurisdiction in imposing penalty for so-called concealment of income under section 128 of the Ordinance. Learned Additional Commissioner of Taxes, Inspection Directorate, Dhaka, who appeared at our request, also could not support the impugned orders of the Deputy Commissioner of Taxes.”

18.        Further in the case of Dr. Mohammad. Moniruzzaman –vs- National Board of Revenue in writ petition No. 3460 of 2011, this bench differently constituted, wherein one of us is a partly decided also as to the same point, in the following language.

“The aforesaid clause-(a) includes in the definition of income an amount which is “chargeable to tax under any provision of the Ordinance” which implies that to treat any amount to be an ‘income’ it must be examined first whether it is chargeable to tax. Therefore, it appears that the ‘chargeability to tax’ is the gateway to consider an amount, alleged to have been concealed in order to decided the re-opening of any past and closed assessment made earlier, from which an income either escaped from the assessment or the income has been at too low a rate or has been the subject of excessive relief or refund.    

19.        It appears that the impugned notice itself shows that the undisclosed loan account maintained with the Exim Bank is the basis for issuing the notice under section 93 of the Income Tax Ordinance 1984. But that being not the intention of law, the treating of the loan amount as chargeable to tax is a palpable illegality and as such issuance of notice under section 93 of the Income Tax Ordinance 1984 on such basis is nothing but without any lawful authority.

20.        Under the reasoning and discussion as above, this court finds merit in this two rules Nisi and as such the same are required to be made absolute.

21.        In the result the rules Nisi are made absolute.

22.        The impugned notices being No. e¢b ew-376-200-0852/p¡-52/(Lw)/LxAx-3(QVÊ)/2012-2013/612 and e¢b ew-376-200-0852/p¡-52/(Lw)/ LxAx-3(QVÊ)/2012-2013/613| under section 93 of the Income Tax Ordinance 1984 issued by the Deputy Commissioner of Taxes, Circle 52(Companies) Taxes Zone-03, Chittagong for re-opening of income tax case of the petitioner for the assessment year 2008-2009 and 2009-2010, and the issuance of the statutory notice i.e. (IT-90) asking the petitioner to submit income tax return for the assessment year 2008-2009 and 2009-2010 are hereby declared to have been issued any lawful authority and are of no legal effect.

23.        However, there shall be no order as to cost.

Ed.