This Income Tax Reference Application pertaining to tax year 2009 has been filed under section 133(1) of theIncome Tax Ordinance, 2001(the "Ordinance"), seeking opinion of this Court on the question of law, which is said to has arisen from order dated 10.05.2016 (Impugned Order) passed by Appellate Tribunal Inland Revenue, Lahore ("Tribunal"):

"Whether on the facts and in the circumstances of the case, the learned Tribunal has erred in law in holding that the department should have amended the first amended assessment order passed u/s 122(5) and not the earlier deemed order u/s 120(1) whereas the law under sub-section (4) of the Section 122 clearly provides that where an assessment order referred to as the "original assessment" has been amended, the Commissioner may further amend as many times as may be necessary the original assessment subject to limitation provided under the sub- section?"

2.Learned counsel for the applicant department submits that the Tribunal has erred in law while concluding that the reassessment ought to have been made in the amended assessment made under Section 122(5) of the Ordinance and not in the assessment made under Section 120(1) of the Ordinance. He has referred to sub-section (4) of Section 122 of the Ordinance to argue that the words ‘original assessment' occurring in the said provision ineluctably concludes that if an amendment has already been made under sub-section (1), (3) or (5A) of Section 122 of the Ordinance and the assessing officer seeks to make further amendments, the said amendments shall be brought about in the original assessment and not in the amended assessment, as erroneously held by the Tribunal. Learned counsel has placed reliance onCommissioner Inland Revenue v. Ch. Muhammad Akram(2013 PTD 1578) to support his contentions.

3.Conversely, learned counsel for the respondent taxpayer submits that provisions contained in sub-section (6) of Section 114, read with Section

120 and sub section (3) of Section 122 of the Ordinance, makes it abundantly clear that the only assessment order available for further amendment would be the amended assessment as once the deemed assessment order in terms of Section 120(1) is amended, the only order susceptible to further amendment is the amended order. Placed reliance uponCommissioner Inland Revenue, Faislabad v. M/s. Zahid Jee Fabrics Ltd.(2021 PTD 1705) and unreported order dated 22.03.2022 passed inPTR No. 210 of 2021titledCommissioner Inland Revenue, Lahore v. M/s. Azgard Nine Limited, Lahore.

4.We have heard the learned counsels for the parties and perused the available record.

5.At the outset, we have considered the judgment in the case ofCh. Muhammad Akram supra,relied upon by the learned counsel for the applicant. A perusal of theratio decidendiof the judgment would reveal that the referred case revolves around and settles the issue of limitation for the purpose of amendment of an assessment order and has no direct bearing for the issue in hand, therefore, the reliance placed on the said judgment by learned counsel for the applicant is of no help to his cause.

6.On the other hand, a collective reading of sub-section (6) of Section 114, read with Section 120 and sub-section (3) of Section 122 of the Ordinance would lead to an ineluctable conclusion that once amended, the deemed assessment order1merges into the amended order and as a natural corollary, the only assessment which remains in field is the amended assessment. This also finds support from the law that furnishing of complete return of income under Section 120 of the Ordinance (other than a revised return under sub section (6) of Section 114), is always construed as a deemed assessment and being such, the same would remain a fictional assessment unless amended and once amended, the fictional element dilutes and the amended assessment becomes the ‘original assessment'. In the normal parlance, the return of income filed by a taxpayer is not clothed with any order of assessment conferring any validity as this is merely a self- assessment, however, such assessment is deemed as an assessment order under Section 120(1) of the Ordinance, although, in reality it is not so but by fiction encapsulated under the said Section, the Ordinance requires it to be treated as such with all inevitable corollaries. ‘Deem' is to treat (something) as if it were really something else, or it has qualities that it does not have; "'Deem' has been traditionally considered to be a useful word when it is necessary to establish a legal fiction either positively by 'deeming' something to be what it is not or negatively by 'deeming' otherwise2. Nonetheless, the other inseparable inevitability is that the fictions are limited for a definite purpose for which they are created and once embraced with any tangible action, the deemed or fictional element will dilute as the purpose for which such fiction was created, will come to an end. When applied the same to the proposition in hand, the return of income/assessment filed under Section 120(1) of the Ordinance is a fictional assessment order and once the same is revised in terms of sub-section (6) of Section 114 or amended by the Commissioner in terms of the provisions contained in Section 122, the

1Under Section 120(1) of the Income Tax Ordinance, 2001

2Dr. Abdul Nabi, Professor, Department of Chemistry, University of Balochistan, Sariab Road, Quetta v. Executive Officer, Cantonment Board, Quetta(2023 SCMR 1267);All Pakistan Newspaper Society and others v. Federation of Pakistan and others(PLD 2012 SC 01);M/s. Elahi Cotton Mills Ltd. and others v. Federation of Pakistan and 6 others(PLD 1997 SC 582) fictional element goes abegging. In view of the foregoing, the analogy sought to be drawn by the learned counsel for the respondent on the touchstone of sub section (6) of Section 114 read with Section 120 and sub section (3) of Section 122 of the Ordinance is well founded for the reason that a revised return under sub-section (6) of Section 114 of the Ordinance, if competently filed, is reckoned as amended assessment order for all intents and purposes in terms of sub-section (3) of Section 122 of the Ordinance; as this revised/amended assessment is clothed with twofold approvals of the Commissioner; first, in terms of clause (ba) of sub-section (6) of Section 114, which mandates that the revised return is required to be accompanied by a written approval of the Commissioner for revision of the return; second, in terms of clause (a) of sub-section (3) of Section 122 of the Ordinance, which envisages that the ‘Commissioner shall be treated as having made an amended assessment of the taxable income'. The perusal of clause (b) of sub-section (3) of Section 122 of the Ordinance would further substantiate this position, which is to the effect that ‘revised return shall be taken for all purposes of this Ordinance to be an amended assessment order issued to the taxpayer by the Commissioner'.

7.The upshot of the above discussion is that if the Commissioner intends to further amend the assessment order, the only available assessment would be the revised/amended assessment as the return already filed under Section 120(1) of the Ordinance loses its efficacy and becomes irrelevant to the extent of the omission/wrong statement3. On the same analogy, the amended assessment order will be the only available assessment, which may be subjected to any further amendment in terms of sub section (5A) of Section 122 of the Ordinance.

8.In view of the foregoing, there is no substance in the question sought to be raised through this Reference Application, the same is accordingly answered in negative and this Reference Application is herebydismissed.

3Commissioner Inland Revenue v. Ch. Muhammad Akram(2013 PTD 1578)

9.Office shall send a copy of this order under seal of the Court to the Appellate Tribunal as per section 133(8) of the Ordinance.

(Hassan Nawaz Makhdoom) Judge

(Khalid Ishaq) Judge

APPROVED FOR REPORTING.