The COMMISSIONER INLAND REVENUE, MULTAN ZONE vs MUHAMMAD IQBAL RIND & SONS D

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The COMMISSIONER INLAND REVENUE, MULTAN ZONE VS MUHAMMAD IQBAL RIND & SONS D.G. KHAN Ss.122(5a) & 133 (1)---amendment of assessment---Preconditions---amendment of assessment under S.122(5-a) of Income Tax Ordinance, 2001 can be made only in cases where twin conditions namely, (i) assessment Order is erroneous; and (ii) it is prejudicial to the interest of revenue, are satisfied---If one of the two pre-requisites is absent i.e. if assessment Order is not erroneous but prejudicial to revenue or if it is erroneous but not prejudicial to revenue, recourse cannot be had to S.122(5-a) of Income Tax Ordinance, 2001 and it cannot be invoked to correct each and every type of mistake or error in assessment Order---Incorrect assumption of facts or incorrect application of law satisfies requirement of order being 'erroneous'---Phrase 'prejudicial to interest of revenue' has to be read in conjunction with erroneous assessment Order---Every loss of revenue as a consequence of assessment Order cannot be treated as prejudicial to interest of revenue---When assessment Order is based on one of the courses permissible in law and it has resulted in loss of revenue or where two views are possible and view taken in assessment Order is the one with which Commissioner does not agree, it cannot be treated as erroneous order prejudicial to the interests of revenue, unless view taken in assessment Order is unsustainable in law. Ss.120(1), 122(5a) (9), 133(1) & 231-a---Reference---amendment of assessment---Calculation of cash withdrawal and tax deduction---Erroneous and prejudicial order---Proof---authorities amended assessment order of respondent taxpayer on the plea that it was erroneous and prejudicial to the interest of revenue---appellate authority annulled amended assessment order which was maintained by appellate Tribunal Inland Revenue---Validity---Jurisdiction under Ss.122(5a) & (9) of Income Tax Ordinance, 2001, was assumed while treating assessment of taxpayer under S.120(1) of Income Tax Ordinance, 2001, to be erroneous---assessment of taxpayer could not be prejudicial to the interest of revenue merely on the ground that figure of total cash withdrawal when worked back on the basis of tax deduction under S.231-a of Income Tax Ordinance, 2001, did not commensurate with declared net sales/gross profit---assumption that such worked back figure reflected sales or gross profit of taxpayer was nothing more than a conjecture and surmise based on arithmetic calculation of Taxation Officer---High Court declined to interfere in orders passed by two forums below as it was rightly held in appeal that it was not sufficient for treating assessment Order under S.120(1) of Income Tax Ordinance, 2001, to be erroneous in so for as prejudicial to the interest of revenue---Reference was dismissed, in circumstances.

The COMMISSIONER INLAND REVENUE, MULTAN ZONE vs MUHAMMAD IQBAL RIND & SONS D — 2022 PTD 1411 LAHORE-HIGH-COURT-LAHORE

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