BEFORE THE HONORABLE COMMISSIONER APPEALS ( ) KARACHI
MISCELLENIOUS APPLICATION NO. /2024
Mohammad Sajid
R/o: PLOT# D-3 KDA No.1,
Defence Housing Authority, Karachi APPLICANT
V/S
Assistant/ Deputy Commissioner
Inland Revenue, Unit-01, Range-C, Zone-III
Regional Tax Office -I, Karachi.
RESPONDENT
TAX YEAR 2018
SUBJECT: PRAYER FOR THE 2nd GRANT OF STAY U/S 128(1)(A) AGAINST
THE DEMAND LEVIED U/S 122(1) OF THE INCOME TAX
ORDINANCE, 2001
On behalf of the Applicant, it is most respectfully submitted as under:
The applicant respectfully submits that the recovery notice vide bearing IRIS code
No.100000189607523 dated 11th March, 2024 has been issued against the order passed under
section 122(1) of the Income Tax Ordinance, 2001 [hereinafter referred as “the Ordinance”]
vide Iris Bar code No. 100000160876898 dated September 22nd, 2023 passed by learned
Assistant Commissioner Inland Revenue, Unit-I Range-C, Zone-III, Regional Tax Office-I,
Karachi [hereinafter referred as ACIR]. whereas the Ist Stay application was already granted
by your good-self.
The legal aspects and facts of the case are stated below for kind perusal: -
1. That the impugned order passed by the learned ACIR Vide Iris Code No.
100000160876898, dated September 22nd, 2023 is bad in law and facts of the case.
The respondent decides the matter wrongly and arbitrarily without considering the
factual position of the case in violation of principle of natural justice.
2. That the Demanded Income Tax of Rs. 18,040,085/- against the impugned under
Section 122(1) of the Income Tax Ordinance, 2001 was determined by the Learned
Assistant/Deputy Commissioner Inland Revenue, Unit-I Range-C, Zone-III, Regional
Tax Office-I, Karachi, (hereinafter referred to as ACIR) against the Appellant.
3. That the impugned order is baseless on many counts having no value in the eyes of
law, due to learned ACIR have failed to finalize the case on technicalities rather on
the merit as no any chance was given to the appellant to prove his version regard the
said property so it is the clear violation of the (Audi Alteram Partem) as no fair
chance was given to appellant to prove his case on the merit.
4. That the ACIR was not provided the hearing opportunity to the appellant and
concluding the proceedings which was predetermined to create demand just for
penalizing the appellant in speedy manner and discarding the facts of the case without
opportunity of hearing to be heard which is not justified.
5. That the Applicant have already been declared the properties in question in their
wealth statement and have declared all his assets rightly and submitted his revised
wealth Statement under section 116(3) of the Ordinance on IRIS bearing E-ticket #
100000094623183 dated March 18, 2021. That the Learned ACIR in his impugned
order does not consider the wealth statement submitted by the appellant.
6. That the applicant has correctly declared all his property, however, the learned ACIR
has taken up the issue of the paid challan of 236(K) but didn't mention in his order
against which property, or the name and address of the property as stated in the notice
were not disclosed, which is against the law. Additionally, the omission of this crucial
information raises questions about the legality and fairness of the process. However it
is essential for such details to be clearly outlined in order to ensure transparency and
accountability. But the learned ACIR fail to do so which undermines the integrity of
the legal proceedings and could potentially lead to misinterpretation or misuse of
learned ACIR authority.
7. That subsection (8) of section 122 contains an inclusive definition of "definite
information", which provides in material part that such information includes
“information. On the acquisition, possession or disposal of any money, asset, valuable
article or investment made or expenditure incurred by the taxpayer" At the relevant
time, subsection (5) required that the deemed assessment order could only be
amended "where, on the basis of definite information acquired from an audit or
otherwise" the Commissioner was satisfied that any one of three clauses of the
subsection was applicable. In the present case, there was of course no audit involved.
8. That in this regard Supreme court of Pakistan held in the case of Commissioner Inland
Revenue Zone Bahawalpur, Regional Tax office, Bahawalpur Vs Messrs Bashir
Ahmed (Deceased) through LRs. 2021 SCMR 1290 held as under:-
8. As noted above, a notice under
section 111 was issued to the respondent. However, the
sequence of the notices was crucial. The notice under
section 122, subsections (1), (5) and (9) was issued first, on
24.09.2011 and it was only later, on 07.12.2011, that the
notice under section 111 was issued. Now, and this is
crucial and determinative for present purposes, the first
notice purported to state that "the department is in
possession of definite information" regarding the
investment allegedly made in immoveable property. That
claim was repeated in the notice under section 111. In other
words, the respondent was not given an opportunity, as is
mandatorily required by section 111, to satisfy the tax
authorities as to the source etc. of the funds by which the
immoveable property was acquired. Rather, the department
from inception, and throughout, proceeded on the basis that
it already had definite information with it in this regard,
such as was sufficient to allow the amendment of the
deemed assessment order However, that could not be so
until first the proceedings under section 111 had
culminated in an appropriate order. That order could have
constituted the definite information as would allow the
amendment of the deemed assessment order, and indeed,
subsection (2) of section 111 contains elaborate statutory
instructions as to which is the tax year in which the
concealed income is to be added. It is possible for both
steps, ie, the finding under section 111 and the amendment
of the deemed assessment order to be done together, and
for the notice under section 111 to be issued along with the
notice to amend. However, in such a case, the proceedings
and notice(s) must expressly so state on the face of it. Here,
the proceedings under section 111 were, as it were, "short
circuited" altogether since the department began with the
premise that it already had definite information available
with it, and the concerned officer proceeded accordingly.
That, in law, could not be so. Therefore, in our view, there
was no definite information available within the
contemplation of the statute. The conclusions arrived at by
the learned Tribunal and learned High Court were correct
and did not warrant interference by this Court.
9. That the recovery amount which is claimed by the respondent is against the law and
having no any value in the eyes of law and order is passed only on technicalities
rather on the merit as no any chance was given to the appellant to prove his version
regard the said property so it is the clear violation of the (Audi Alteram Partem) as
no fair chance was given to appellant to prove his case on the merit.
10. That the order has been passed without considering the facts of the appellant and
passed in speedy manner just too complete the monthly targets of the respondent, and
didn’t consider the version of appellant, which seems clear violation of merit of the
case and violation of the law.
11. That the attachment of the accounts of applicant by the department cause prolonged
delay in customs clearance not only affects the applicant financial stability but also
disrupts the business operations. The goods contained in the containers are essential
for ongoing projects and customer orders, and any further delay will lead to
contractual penalties and loss of business opportunities.
12. That the department is pressing hard for recovery of demand of Rs. 18,040,085/- is
arbitrary, harsh and discriminatory, as such, not sustainable.
13. That the demanded income tax is exorbitantly high and surpasses the financial
capacity of the Applicant.
14. The Applicant has a strong prima facie case, and the balance of convenience is in their
favor.
15. The Counsel for applicant craves permission for add, alter any ground at the time of
argument.
PRAYER
In view of the above submissions, it is respectfully prayed that your good-
self may, in exercise of the power conferred under section 128(1)(A) of the
ordinance to grant stay of recovery of the disputed tax and restrain the
Department from taking any coercive action for its recovery. This
application is made in the interest of justice.
Karachi
Dated: 27-06-2024
_________________________________
(Counsel for the applicant)
