Case No: Writ Petition No. 1952 of 2012
Judge: Sheikh Hassan Arif. J.
Court: High Court Division,
Advocate: Mr. M.A. Noor, Mr. S. Rashed Jahangir,
Citation: 2017 (2) LNJ 369
Case Year: 2016
Appellant: Swiss Colours Bangladesh Ltd.
Respondent: The Commissioner of Taxes and others
Subject: Income Tax
Delivery Date: 2018-01-17
HIGH COURT DIVISION
(SPECIAL ORIGINAL JURISDICTION)
Sheikh Hassan Arif, J.
Bhishmadev Chakrabortty, J.
Swiss Colours Bangladesh Ltd. House No. 54/1, Road No. 4/A (New), Dhanmondi Residential Area, Dhaka, represented by its Managing Director Mr. Akhter Hossain.
. . . Petitioner.
The Commissioner of Taxes, Taxes Zone-2, 2nd 12th Storied Building, Segunbagicha, Dhaka and others
. . . Respondents.
Income Tax Ordinance (XXXVI of 1984)
As the return of the petitioner was in fact listed by the concerned Tax Commissioner for the purposes of audit in the manner provided by the Board. Thus since the respondents have selected the return of the petitioner in accordance with the provisions of sub section 3 of section 82BB of the said ordinance. This court does not find any substance in the arguments put forward by the learned advocates for the petitioner as regards the issue of jurisdiction for selecting the said return. . . . (11)
Mr. M.A. Noor, Advocate
. . . For the petitioner
Mr. S. Rashed Jahangir, D.A.G with
Ms. Nurun Nahar, A.A.G.
. . . For the respondent No. 01.
Sheikh Hassan Arif, J: Rule Nisi was initially issued calling upon the respondents to show cause as to why the order dated 06.01.2011 passed by the Commissioner of Taxes, Taxes Zone-2, Dhaka(respondent no.1) in Nothi No. LA-2/B¢h/¢l¢iE-10/2010-2011 relating to the assessment year 2009-2010 of the petitioner, should not be declared to have been passed without lawful authority. Subsequently, on an application by the petitioner, a Supplementary Rule was issued calling upon the respondents to show cause as to why the recommendation given by the concerned Deputy Commissioner of Taxes (respondent no.2) for selection of the petitioner’s income tax return for the assessment year 2009-2010 for audit, selection of the said return for audit purportedly under Section 82BB(3) of the Income Tax Ordinance, 1984 pursuant to such recommendation and consequent assessment order dated 31.10.2010 passed by the respondent no.2 (Annexure A to the writ petition), should not be declared to be without lawful authority and are of no legal effect.
2. Short facts, relevant for the disposal of the Rule, are that, the petitioner, being a private limited company, is engaged in the business of agency of a foreign company for marketing the products of the same and, thus, receives commissions on sales through remittances as per an agency agreement between them. Accordingly, it is stated, the petitioner pays tax on the commissions received by it. In the course of such business, the petitioner submitted income tax return for the assessment year 2009-2010 under the Universal Self-Assessment Scheme as provided by Section 82BB of the Income Tax Ordinance 1984 (“the said Ordinance”) showing an income of Tk. 1,02,06,968.00 along with audited accounts, bank certificate etc. Accordingly, it is stated, upon receiving the said return, the concerned DCT issued receipt in favour of the petitioner and then deemed assessment order was passed in respect of the said return in view of the provisions under sub-section (1) of Section 82BB. It is stated further that, subsequently, the said return was selected for audit by the NBR in exercise of its power under sub-section (3) of Section 82BB on the basis of recommendation given by the concerned DCT (respondent No. 2). Thereupon, the DCT passed an assessment order afresh under Sections 82BB(1)/ 82BB (3)/83(2) of the said Ordinance and thereby computed income of the assessee at Tk. 10,34,73,100.00 vide order dated 31.10.2010 followed by demand notice demanding an additional tax for an amount of Tk. 4,40,22,774.00. Being aggrieved by such assessment order, the petitioner filed a revisional application before the concerned Commissioner of Taxes under Section 121A of the said Ordinance, whereupon, the Commissioner, vide impugned order dated 06.01.2011, rejected the same and, accordingly, affirmed the said order of assessment passed by the DCT. Being aggrieved by such actions of the respondents, the petitioner moved this Court and obtained the aforesaid Rule and Supplementary Rule.
3. The Rule and Supplementary Rule are opposed by the concerned Commissioner of Taxes (respondent No. 1) by filing three affidavits-in- opposition.
4. Mr. M.A. Noor, learned advocate for the petitioner, initially made submissions as regards the legal propriety of the impugned order dated 06.01.2011 passed by the Commissioner of Tax. However, after issuance of Supplementary Rule, he has mainly concentrated his arguments and submissions on the jurisdiction of the concerned respondents in selecting the return of the petitioner for audit under sub-section (3) of Section 82BB. Drawing this Court’s attention to the very assessment order dated 31.10.2010 (Annexure-A), Mr. Noor submits that, it is evident from the said order that the DCT himself recommended the said return for selection for audit by the Board and, on the basis of such recommendation, the Board selected the same for audit. This being so, learned advocate submits that, the very selection of the return as submitted by the petitioner under universal self-assessment scheme was without jurisdiction as the Legislature has only given such power for selection on the Board itself to be exercised independently. According to the learned advocate, in selecting such returns submitted under the Universal Self Assessment Scheme, the Board has to act independently and as such cannot exercise such power of selection on the basis of recommendation given by the DCT. Learned advocate further argues that, provisions under sub-section (3) of Section 82BB having provided specific procedure assigning the specific authorities for selecting the returns as submitted under Universal Self Assessment Scheme, the concerned DCT acted beyond his jurisdiction in recommending the return of the petitioner for such selection for audit. This being so, according to him, this Court should interfere and knock-down the said assessment order which was passed pursuant to such unauthorized selection process. Learned advocate then submits that, since the Commissioner in disposing of the petitioner’s application under Section 121A of the said Ordinance has not considered this jurisdictional aspect of selecting a return for audit, the said order also suffers from gross illegality and as such should be knocked-down by this Court.
5. As against above submissions, Mr. S. Rashed Jahangir, learned Deputy Attorney General, along with Ms. Mahfuza Begum, learned Assistant Attorney General, has put extensive weight on the words “in the manner to be determined by the Board” as occurring under sub-section (3) of Section 82BB of the said Ordinance. Drawing this Court’s attention to the averments in the affidavit-in-oppositions as well as the papers annexed to the affidavit-in-opposition dated 19.05.2016 as Annexure-A, learned DAG submits that these papers categorically show that the Board has provided a particular manner for selection of returns for the purpose of audit as mandated by the Legislature under sub-section (3) of Section 82BB and as such no illegality, or act of without jurisdiction, has been committed by the respondents either by selecting the return of the petitioner for audit and/or by passing the impugned orders thereon. Further referring to the specific features for selection of returns for audit as supplied by the Board to the concerned Commissioner of Taxes, learned DAG submits that the Board has adopted an objective manner and some objective criteria for selection of such returns for the purpose of audit as the same being the mandate of the law inasmuch as that such selection method or manner adopted by the Board will prevent any sort of arbitrary selection or malafide selection from taking place. This being so, learned DAG submits that, since the Board as well as the concerned Commissioner and DCT have acted in accordance with the provisions under sub-section (3) of Section 82BB, no illegality has been committed in selecting the return of the petitioner for audit as well as in passing the impugned orders thereon. As regards specific statement of the petitioner that the return of the petitioner has been selected on the basis of the recommendation of the DCT, the respondent, in the affidavit-in-opposition dated 19.05.2016, has narrated the said manner and procedure as to how the said return has been selected.
6. To appreciate the submissions of the learned advocates, let us first examine the relevant provisions under Section 82BB of the said Ordinance. Sub-section (1) of Section 82BB has allowed an assessee to furnish a correct and complete return of income tax under Universal Self Assessment Scheme, whereupon the concerned Deputy Commissioner of Taxes, or other official authorized by him, will issue a receipt of such return, either manually or electronically. It has further been provided that, such receipt shall be deemed to be an order of assessment for the assessment year for which the said return was filed. Some other requirements under sub-section (2) of Section 82BB have been provided by the statute to determine as to when a return can be taken as complete return. Now, sub-section (3) of Section 82BB, as prevailing at the relevant time of concerned assessment years, is quoted below as the provisions under this sub-section is the bone of contention between the parties:
“82BB. Universal Self Assessment.-
(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) Notwithstanding anything contained in sub-section (1) and section 93, the Board or any authority subordinate to the Board, if so autherised by the Board in this behalf, may select, in the manner to be determined by the Board, a number of these returns filed under sub-section (1) and refer the returns so selected to the Deputy Commissioner of Taxes for the purpose of audit and the Deputy Commissioner of Taxes shall thereupon proceed, if so required, to make the assessment under Section 83 or Section 84, as the case may be.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. It appears from above provisions under sub-section (3) of Section 82BB that, in spite of the deemed assessment order in view of sub-section (1) of Section 82BB, the Board or any authority subordinate to Board, has been authorized by the Legislature to select a number of such returns filed under the Universal Self Assessment Scheme and refer the said returns so selected to the concerned Deputy Commissioner of Taxes for the purpose of audit and, thereupon, the said DCT shall proceed, if so required, to make assessment under Sections 83 or 84, as the case may be. However, it appears that, in giving such authority to the Board, the Legislature was very much careful that such selection process might be fraught with arbitrariness and mala-fide of the Board members or that the Board might adopt a practice of ‘pick and choose’ amongst several returns submitted under sub- section (1) of Section 82BB. To check such arbitrariness and pick & choose practice, the Legislature incorporated therein the following words:
“in the manner to be determined by the Board”
8. Therefore, combined reading of the entire relevant provisions of sub-section (3) reveals that, the Board first will have to determine a manner in accordance with which such returns submitted under Universal Self Assessment Scheme shall be or may be selected. By providing this condition, the Board has been prevented by the statute from adopting any sort of pick and choose approach in respect of selecting the returns submitted by the assessees.
9. As against above law, we have examined the specific case of the respondent-Tax Authority, in particular the Annexure-1 to the affidavit-in-opposition dated 19.05.2006 along with the averments therein. It appears from the said Annexure-1, by which the respondent has tried to disclose the manner adopted by the Board for selecting such returns, that the Board, vide Nothi dated 31.10.2010, asked the concerned Commissioner of Taxes to send the information about returns in the table provided therein. Along with the said nothi, the Board further provided some features on the basis of which those returns have to be listed by the concerned Commissioner for sending the said list in another table to the Board. It has further been stated in the enclosures thereto containing the said features that the Board would approve the selection proposal on the basis of such table. The features on the basis of which the Commissioner is required to select returns are quoted below:-
(L) ®L¡Çf¡¢e hÉa£a Llc¡a¡®cl SeÉx
(1) k¤¢š²pwNa L¡lZ R¡s¡ phÑ®no ¢el¦¢fa A¡®ul a¥me¡u AaÉ¢dL Lj A¡u fÐcnÑe Ll¡ q®m;
(2) k¤¢š²pwNa L¡lZ R¡s¡ hÉhp¡u œ²j¡Na ®m¡Lp¡e fÐcnÑe Ll¡/Llj¤š² p£j¡l e£®Q A¡u fÐcnÑe Ll¡ q®m;
(3) ®hae A¡u, p¥c/miÉ¡wn J L«¢o A¡u hÉa£a AeÉ ®r®œ k¤¢š²pwNa L¡lZ R¡s¡ ¢lg¡ä c¡h£ Ll¡ q®m;
(4) fÐj¡e hÉa£a fÐc¢nÑa ®j¡V A¡®ul ®Qu ®hn£ Llj¤š² A¡u c¡h£ Ll¡ q®m;
(5) p¤¢e¢cÑø abÉ fÐj¡Z hÉa£a ®L¡e c¡e fÐ¡¢ç fÐcnÑe Ll¡ q®m;
(6) HC hRl Eá¥a fÐjvZ¢hq£e fÐ¡¢aù¡¢eL/5.0 mr V¡L¡l A¢dL AfÐ¡¢aù¡¢eL GZ fÐcnÑe Ll¡ q®m;
(7) p¤¢e¢cÑø fÐj¡Zfœ hÉa£a AeÉ hÉ¢š² Abh¡ fÐ¢aù¡e q®a Foreign Remittance fÐ¡¢ç fÐcnÑe Ll¡ q®m;
(8) pÇf®cl f¢lhª¢Ü ®O¡¢oa ®j¡V Ev®pl p¢qa pwN¢af§ZÑ e¡ q®m;
(9) gÓÉ¡V/h¡s£ ¢ejÑ¡Z Hhw N¡s£ œ²u CaÉ¡¢c®a pw¢nÔø hvpl ¢h¢e®u¡N b¡L®m Hhw Hl¦f ¢h¢e®u¡®Nl Evp pÇf®LÑ k®b¡fk¤š² J k¡Q¡C®k¡NÉ fÐj¡Zfœ c¡¢Mm e¡ Ll¡ q®m;
(10) hÉhp¡ A¡®ul ®r®œ k¤¢š²pwNa L¡lZ R¡s¡ f§hÑhaÑ£ hR®ll ®Q®u AaÉ¢dL Lj ¢hœ²u/ÙÛ¤m j¤e¡g¡ fÐcnÑe Ll¡ q®m;
(12) A®k±¢š²Li¡®h Lj f¡¢lh¡¢lL hÉu fÐc¢nÑa q®m;
(13) A¡CeNa ®L¡e ¢hQ¤É¢a b¡L®mz
(M) ®L¡Çf¡¢e Llc¡a¡®cl ®r®œx
(1) phÑ®no ¢el¦¢fa A¡u A®fr¡ Lj A¡u/ ®m¡Lp¡e/¢lg¡ä fÐcnÑe Ll¡ q®m;
(2) m¡i ®m¡Lp¡e/h¡¢Z¢SÉL ¢qp¡h AdÉ¡®c®nl 29 d¡l¡u NËqZ®k¡NÉ eu Hje fÊL«¢al MlQ/®lu¡a c¡h£ Ll¡ q®m;
(3) AdÉ¡®c®nl 50 d¡l¡ q®a 56 d¡l¡u fÐ®k¡SÉ ®r®œ Evp Ll LaÑe Ll®a hÉbÑ q®m;
(4) fÐj¡Z ¢hq£e Llj¤š² A¡u/AfÐ¢aù¡¢eL GZ c¡h£ Ll¡ q®m;
(5) k¤¢š²pwNa L¡lZ hÉa£a ¢hNa hR®ll a¥me¡u (ÙÛ¤m j¤e¡g¡x ¢hœ²u) Hhw (e£V j¤e¡g¡x ¢hœ²u) Hl Ae¤f¡a ¢hNa hR®ll a¥em¡u E®õM®k¡NÉ Lj cM¡e¡ q®m;
(6) k¤¢š²pwNa L¡lZ hÉa£a h¡¢Z¢SÉL m¡i ®m¡Lp¡e ¢qp¡®hl ®L¡e M¡®al MlQ f§hÑhaÑ£ hR®ll a¥me¡u Aü¡i¡¢hL ®hn£ f¢lj¡Z c¡h£ Ll¡ q®m;
(8) œ²j¡Na ®m¡Lp¡e ®cM¡®e¡ q®m;
(9) A¡CeNa ®L¡e ¢hQ¤É¢a b¡L®m''z
10. It appears from the above features that, the Board has in fact adopted an objective test for selection of returns filed under Universal Self-assessment Scheme irrespective of the identity of the assessee. The said features further reveals that the office of Commissioner will only check the reruns submitted by the assessees under Universal Self Assessment Scheme to find out which of such returns attract the said one or more of such features. Once such one or more features are attracted to a particular return, that return will be listed in the list to be provided in the table to the Board and then the Board will approve for audit of such returns and then send such selected returns to the concerned DCT to act accordingly. It appears that, this communication of the fact of selection of the concerned return in this case has been made vide e¢b ew-S¡l¡h¡/Ll-7/BxBx¢hx/ 82¢h¢h (A¢XV) /2009-2010/66, a¡w-06/05/2010Cw and e¢b ew 4H-44/LA-2/Bp¡/82¢h¢h (A¢XV)/2009-2010/ 1383, a¡w 11/05/2010 Cw, which has been mentioned in the very assessment order dated 31.10.2010 (Annexure-A to the writ petition).
11. It may further be mentioned here that, the case of the petitioner mainly stands on a comment of the concerned DCT in the said assessment order, which is quoted below:-
“Eõ¢Ma H²¤¢Vl L¡l®Z BuLl ¢lV¡ZÑ¢V A¢X®Vl SeÉ p¤f¡¢ln Ll¡ quz A¢XV p¤f¡¢l®nl ®fË¢r®a S¡a£u l¡Sü ®h¡XÑ, Y¡L¡l e¢b ew-S¡l¡h¡/Ll-7/BxBx¢hx/82¢h¢h(A¢XV)/2009-2010/66, a¡w-06/05/2010Cw Hhw Ll L¢jne¡l, Ll A’m-2, Y¡L¡l e¢b ew 4H-44/LA-2/Bp¡/ 82¢h¢h(A¢XV)/2009-2010/1383, a¡w 11/05/2010 Cw à¡l¡ BuLl ¢lV¡ZÑ¢V A¢X®Vl SeÉ ¢ehÑ¡¢Qa quz
12. On the basis of the above underlined comment of the DCT, learned advocate for the petitioner has strenuously argued that the said return of the petitioner was recommended for selection by the DCT. However, upon reading the said comment of the DCT as well as other materials on record, in particular Annexure-1 to the said affidavit in opposition, this Court is of the view that, there is no such fact that the DCT himself recommended the said return for selection for the purpose of audit. On the other hand, the documents submitted vide Annexure-1 to the affidavit-in-opposition clearly reveal that, the return of the petitioner was in fact listed by the concerned Tax Commissioner for the purpose of audit in the manner provided by the Board. Thus, since the respondents have selected the return of the petitioner in accordance with the provisions of sub- section (3) of Section 82BB of the said Ordinance, this Court does not find any substance in the arguments put forward by the learned advocate for the petitioner as regards the issue of jurisdiction for selecting the said return.
13. Regard being had to the above facts and circumstances of the case, we do not find any merit in the Rules and as such the same should be discharged.
14. In the result, the Rules are discharged without any order as to costs. The ad-interim order, if any, thus stands recalled and vacated.