QAZI CARPETS vs The ITO, SERVICE UNIT NO — 2025 PTD 174 KARACHI-HIGH-COURT-SINDH

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QAZI CARPETS VS The ITO, SERVICE UNIT NO.2, CIRCLE 4, HYDERABAD Ss. 55 & 57---Self-assessment Scheme---Income tax return---Revised return, non-filing of---Scope---Whether writing a letter to the Income Tax Officer (letter-in-question) by taxpayer while making certain corrections in the columns of the Income Tax Form would ipso facto amount to filing a revised return as envisaged under S. 57 of the Ordinance 1979?---Held, that under the prevalent scheme of law at relevant time as stipulated as per the Income Tax Ordinance, 1979 ('the Ordinance, 1979'), the applicant / taxpayer was required to file a return of total income under S. 55 of the Ordinance, 1979, whereas, S.59 of the Ordinance, 1979 deals with Self-assessment Scheme as may be notified by CBR from time to time---Section 59 of the Ordinance, 1979 further provides that a return of total income furnished under S.55 does not include a return of a total income furnished under said S. 57 of the Ordinance, 1979 which provides a revised return of total income---Perusal of the provision of S. 57 of the Ordinance, 1979 reflects that if a person having furnished a return, discovers any omission or wrong statement therein, he may, without prejudice to any liability incurred by him under any provision of the Ordinance, 1979 or the repealed act, may furnish a return, at any time before the assessment is made---assessing Officer while passing his order under S. 61 of the Ordinance, 1979 came to the conclusion that the applicant had filed a revised return which was done after the extended date of filing of return; hence it was not qualified under the Self-assessment Scheme and was not immune from total audit as well---Though if there is any return which falls within the ambit of S.57 of the Ordinance, 1979, (a revised return or a return which had not been filed in accordance with the Ordinance) it may not qualify under the Self-assessment Scheme as excluded under S. 59, read with CBR Circular No. 9/1987---In the present case, the applicant / taxpayer had not filed any revised return of its total income which could disqualify its claim under the Self-assessment Scheme---applicant had never altered the total amount of income or the tax so payable, and it was only by way of a letter that the applicant approached the Income Tax Officer by stating that the mistake, if at all, was in respect of placing the correct figures in relevant columns---It had no effect on the liability of tax; nor any income was revised upwards or downwards---Income in both the situations was shown as higher by 20% from the income so assessed in the immediate past assessment year; hence, qualified under the Self-assessment Scheme---Letter-in-question could not be treated as a revision of income or a revised return, without having any direct impact on the total income of the applicant as there was no material on record to treat the said letter or information furnished to the Income Tax Officer, as being a complete revised return falling within the ambit of S. 57 of the Income Tax Ordinance, 1979---admittedly, the figures shown in the original return as well as in the purported revised return were substantially the same, whereas, the revision was only to the extent of form and not any substance as correctly held by the Commissioner (appeals)---If there was failure on the part of an assessee to submit documents within a prescribed period of time for availing a Self assessment Scheme, either due to circumstances beyond his control or for sufficient grounds, this by itself could not be made basis to deprive him of the benefit of the said scheme---In essence, the scheme being initiated for benefit of a taxpayer as well as seeking collection of higher taxes with a minimum increase of 20% of income in favour of the Department, has to be construed liberally and not strictly, or in the manner as had been done in the present case---Thus, proposed questions were answered in negative i.e. in favor of the applicant / taxpayer and against the department---High Court set-aside the order of the Tribunal and the order of the Commissioner (appeals) stood restored---Reference application, filed by taxpayer, was allowed accordingly.

QAZI CARPETS vs The ITO, SERVICE UNIT NO — 2025 PTD 174 KARACHI-HIGH-COURT-SINDH

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