| Case ID |
0c12f718-9ea8-4479-9967-d062cdb8b782 |
| Body |
View case body. Login to View |
| Case Number |
|
| Decision Date |
Jun 14, 1997 |
| Hearing Date |
Jun 07, 1997 |
| Decision |
The Appellate Tribunal Inland Revenue upheld the Income Tax Department's assessment against the appellant, Khawaja Farooq Saeed, confirming that the appellant was the true owner of the properties in question. The tribunal found that the appellant had not adequately disclosed income from real estate transactions and failed to provide necessary documentation to support his claims of acting in a representative capacity for cooperative societies. The tribunal rejected the appellant's arguments concerning the legitimacy of the transactions and the validity of the notices served. Key legal provisions under the Income Tax Ordinance, 1979, specifically sections 65, 154(6), and 148, were applied to justify the reopening of the assessment and the subsequent tax liabilities. The tribunal also dismissed the appellant's contentions regarding the lack of confrontation of evidence and the alleged procedural irregularities in serving notices. Ultimately, the tribunal ordered the confirmation of the tax assessments for the relevant years, reinforcing the department's stance on the appellant's undisclosed income and the improper handling of the cooperative societies' transactions. |
| Summary |
In the landmark case reported as 1998 SLD 203 and 1998 PTD 1396, the Appellate Tribunal Inland Revenue adjudicated a significant tax dispute involving the Income Tax Ordinance, 1979. The appellant, Khawaja Farooq Saeed, who served as the Chief Executive of Sun Shine Cotton Mills, faced severe tax assessments for undisclosed real estate income spanning multiple assessment years (1989-90, 1990-91, 1991-92, and 1992-93). Represented by Muhammad Saleem Ch. and Muhammad Iqbal Khawaja, the appellant challenged the Income Tax Department's (ITO) findings, arguing that the properties were acquired in his capacity as President of cooperative societies, rather than personally. Key legal arguments centered around sections 65, 154(6), and 148 of the Income Tax Ordinance, 1979, addressing the reopening of assessments, proper service of notices, and the validity of evidence on oath, respectively.
The tribunal meticulously examined the appellant's claims, uncovering discrepancies in the wealth statements and the absence of essential cooperative society documentation, such as registers of members and minutes books. Despite the appellant's assertions of acting on behalf of the societies, the tribunal found compelling evidence of personal involvement in property transactions, including the purchase and sale of multiple plots in Lahore. The lack of original documents, reliance on affidavits with dubious evidential value, and contradictory statements from society members further weakened the appellant's position.
Key citations influencing the tribunal's decision included PLD 1996 SC 1, PLD 1989 SC 503, and 1992 PTD 1672, which reinforced the principles surrounding the proper application of tax laws, the importance of independent assessment by tax authorities, and the limitations of relying solely on affidavits without corroborative evidence. The tribunal also addressed procedural challenges, such as the legitimacy of serving notices through the appellant's assistant and the timing of the final decision relative to statutory limitations.
Ultimately, the tribunal affirmed the ITO's tax assessments, emphasizing the appellant's failure to adequately disclose taxable income and the sufficiency of the evidence presented against him. The case underscores the critical importance of transparent financial disclosures and the rigorous application of tax laws by authorities. It serves as a pivotal reference for future cases involving complex transactions and the use of corporate entities to obscure personal income, highlighting the judiciary's role in ensuring compliance and integrity within the tax system. |
| Court |
Appellate Tribunal Inland Revenue
|
| Entities Involved |
Sun Shine Cotton Mills,
Housing Building Cooperative Society,
Gold Star Cooperative Society,
Chung Punjgrain, Lahore,
Cooperative Housing Building Society No.3,
Cooperative Housing Building Cooperative Society,
M/s. Gold Star Cooperative Housing Society
|
| Judges |
Khawaja Farooq Saeed,
Mansoor Ahmad
|
| Lawyers |
Muhammad Saleem Ch.,
Muhammad Iqbal Khawaja,
Shahbaz Butt,
Farooq Tahir
|
| Petitioners |
Muhammad Saleem Ch.,
Muhammad Iqbal Khawaja
|
| Respondents |
Shahbaz Butt,
Farooq Tahir
|
| Citations |
1998 SLD 203,
1998 PTD 1396
|
| Other Citations |
1992 PTD 1672,
PLD 1996 SC 1,
PLD 1989 SC 503,
1993 SCMR 956,
1991 PTD 2300,
1954 ITR 349,
1991 PLD 368 SC,
1996 PTD 905,
1996 PTD 130,
209 ITR 52,
1995 PTD 1675,
PLD 1997 SC 32,
PLD 1979 SC 949,
1993 PTD 1172,
1991 PTD 758,
1989 PTD 1671,
1987 PTD 249,
1995 PTD 72 Tax 197 Trib,
1995 PTD 71 Tax 269,
1991 PLD 1990 SC 99
|
| Laws Involved |
Income Tax Ordinance, 1979
|
| Sections |
65,
154(6),
148
|