National Board of Revenue & others Vs. Al-Haj Mohammad Sufian

Case No: Civil Petition for Leave to Appeal No. 869 of 2001

Judge: Mohammad Fazlul Karim ,

Court: Appellate Division ,,

Advocate: Md. Nawab Ali,Mr. B. Hossain,,

Citation: Civil Petition for Leave to Appeal No. 869 of 2001

Case Year: 2005

Appellant: National Board of Revenue

Respondent: Al-Haj Mohammad Sufian

Subject: Fiscal Law,

Delivery Date: 2005-8-3

 
Supreme Court
Appellate Division
(Civil)
 
Present:
Syed J.R. Mudassir Hussain CJ
Mohammad Fazlul Karim J
Amirul Kabir Chowdhury J
 
National Board of Revenue and others
………………………....Petitioners
Vs
Al-Haj Mohammad Sufian
………………………....Respondent
 
Judgment
August 3, 2005.
 
Lawyers Involved:
B. Hossain, Advocate-on-Record-For the Petitioners  
Md. Nawab Ali, Advocate-on-Record- For the Respondent
 
Civil Petition for Leave to Appeal No. 869 of 2001
 
JUDGMENT
Mohammad Fazlul Karim J.
 
1. The Secretary. Internal Resources Division, Ministry of Finance and Chairman, National Board of Revenue, Dhaka along with others seek leave to appeal against the judgment and order dated 4.3.2001 passed by the High Court Division in Writ Petition No. 4004 of 1998 making the Rule absolute declaring the order dated 26.10.1998 (Annexure-F to the writ petition) passed by the Tax Settlement Commission, writ-respondent No. 2 in Tax Settlement Application Nos.830-834 of 1998 wrongly written in the rule as 832-834 partly modifying the order of writ-respondent No.3 (Annexure-C series to the writ petition) and finally revised demand notice (Annexure-G series to the writ petition) served upon the writ petitioner by the writ-respondent No.4 to have been made without lawful authority and is of no legal effect and further directed the Taxes Settlement Commission (writ- respondent No.2) to hear the application Nos.830-834 of 1998 afresh in accordance with law affording reasonable opportunity to both the parties to represent the case in accordance with law.
 
2. The writ-petitioner-respondent moved the High Court Division under Article 102 of the Constitution against the order dated 26.10.1998 under section 152E (2) of the Income Tax Ordinance 1984 passed by the Taxes Settlement Commission Bench No. 51, Dilkusha Commercial Area in application Nos.830-834 of 1998 (Annexure-F to the writ petition) partly modifying the order of assessment made by the Deputy Commissioner of Taxes Boitonik Circle-1.Taxes Zone-1, Chittagong (Annexure-C series to the writ petition) in respect of the assessment year 1992-1993, 1993-94, 1995-96, 1996-97,1997-98 under TIN 309-101-5913 in the name of Mohammad Sufian.
 
3. Facts relevant for disposal of the case are that the writ-petitioner submitted self assessment return of his income taxes for the assessment year 1992-93, 1993-94, 1994-95, 1995-96, 1996-97 and 1997-98 under the self assessment scheme under section 83(A) of the Income Tax Ordinance, 1984 and paid tax as per statement. The petitioner asserted that he transferred some property in the year 1992-93 and 1993-94 by registered sale deeds for Tk.25,000/- on 2.3.92 and some property at Tk. 1(one) lac. The petitioner further asserted that he transferred some property at considerations of Tk.3 (three) lacs by a registered kabala dated 10.1.1993. In view of the said transfers, the Assistant Commissioner of Taxes re-opened the assessment of income taxes for the year of 1992-93 and 1993-94 and being of the view that the transfers were made at a considerable low price enhanced the price of the transfers from Tk. 1,25,000/- to Tk. 3,12,000/-for the assessment year 1992-93. The Assistant Commissioner of Taxes also assessed family expenditure at Tk.96, 000/- for the said year. The Assistant Commissioner of Taxes further enhanced the price of the transfer for the assessment year 1993-94 at Tk.606, 250/- from Tk.3 (three) lacs. The Assistant Commissioner of Taxes assessed family expenditure at Tk.1 (one) lac against Tk.38,000/-.That it was assessed by the writ petitioner that though the assessee submitted income tax return under self assessment scheme for the year 1995-96, 1996-97 and 1997-98 and the same was accepted and the case was disposed of but ultimately the Assistant Commissioner of Taxes re-opened the assessment for the aforesaid years on the ground that the assessee did not include the income derived from the house rent received by him. Assistant Commissioner of taxes assessed the house rent for 9 units building at Tk.5,65,000/- against the house rent received by the Assessee for assessment year 1995-96 an amount of Tk.2,62,000/-. The Assistant Commissioner of Taxes enhanced the family expenditure at Tk. 1,10,000/- from Tk. 40,500/- as shown in the Assessment return. The Assistant Commissioner of Taxes then re-opened and enhanced total house rent income for the year 1996-97 at Tk.6,66,000/- for 7 (seven) units building including a garage against the income of Tk.1,85,900/- as shown by the assessee in his self assessment return. That being aggrieved thereby the petitioner assessee waived his right of appeal or revision and filed application No.830-834 of 1998 before the Tax Settlement Commission (Respondent No.2) and by the impugned order dated 26.10.98 (Annexure-F) the. Tax Settlement Commission reduced the assessment at Tk.2,25,000/- from Tk.3,12,000/- for transfer of the land in respect of assessment year 1992-93 and enhanced the family expenditure from 36,000/- to 60,000/- for the said year. The Tax Settlement Commission reduced the assessment for the transfer of the land in 1993-94 assessment year to Tk.4,00,000/- from Tk.6,06,250/- and assessed family expenditure at Tk.62,000/- from the Tk. 38,000/-as assessed by the Assistant Commissioner of Taxes.
 
4. Mr. B. Hossain, the learned Advocate-on-Record appearing for the petitioners submitted that the assessments of the writ petitioners having being re-opened according to law as per report of the competent authority within the compliance of the proper Income Tax authorities, the High Court Division erred in law in making the rule absolute.
 
5. The High Court Division arrived at a finding of fact that:
 
"It is not disputed that the assessee-petitioner submits his return on the basis of self assessment scheme showing his income for the period of 1992-93, 1993-94,1994-95, 1995-96, 1996-97 and 1997-98. It is further submitted that the self-assessment returns submitted by the assessee were accepted by the income tax authority. It appears from Annexure-C series, the order of the Assistant Commissioner of Taxes, that the assessment order of all the aforesaid assessment years were re-opened. We do not find any mention of any approval of the Inspecting Joint Commissioner as required under section 93A of the Income Tax Ordinance for re-opening the assessment order. From a perusal of the order of Assistant Commissioner of Taxes (Annexure-C series) we do not find any reason as to why the assessment of the income tax of the petitioner for all the aforesaid years, which were accepted by the income tax authority, were re- -opened and the basis of the assessment made by the Assistant Commissioner of Taxes. There is reference of the report in Annexure-C series but there is no disclosure as to why contains in the said report."
 
The High Court Division further observed that:
 
"We have perused the order of the Settlement Commission and we are of clear opinion that the Taxes Settlement Commission assessed the income taxes on more surmises and conjectures. The learned Advocate for both the parties failed to point out any reason assigned by the Commission in making the assessment. A perusal of the order of the commission it appears that the Commission allowed the application in part section 1.52E(2) of Income Tax Ordinance 1984 provides that when the application is allowed, the Commission is required to examine the relevant records and other evidence, if any, and the order of the Commission shall provide the terms of settlement. The aforesaid provision of law has not been complied with. The impugned order of the Commission thus suffers from non-application of mind and non-compliance of law and the impugned order apparently appears to have been made without any lawful authority and is of no legal effect the same being based on surmises and conjectures. The learned Advocates for both the parties having regard to the facts of the case have agreed that the order of the taxes Settlement Commission is not legally sustainable and should be re­considered."
 
6. In view of the fact that the statutory authority is required to act in accordance with law and in the instant case under 152E (2) of the Income Tax Ordinance which provides that when an application is allowed the Commission is required to examine the relevant records and other evidences, if any, and that the order of the Commission shall provide the terms of settlement but the impugned order did not manifest to have been passed by the Commissioner in compliance with the provision of the said law and as such the High Court Division has declared the same to have been done without any lawful authority and directed the Taxes Settlement Commission (writ-respondent No.2) to hear the application Nos.830-834 of 1998 afresh in accordance with law after affording reasonable opportunity to both the parties to represent their respective case.
 
7. In view of the above, we do not find any substance in the submission of the learned Advocate-on-Record for the petitioners.
 
The petition is dismissed.
 
Ed.