This order is intended to dispose of the above appeals by this Full Bench constituted for the resolution of an important question of law in respect of issuance of notice under section 114 of the new Income Tax Ordinance, 2001 (hereinafter called the new Ordinance, 2001) and A consequential framing of assessment under section 62 or 63 of the late Income Tax Ordinance, 1979 (hereinafter called the old Ordinance, 1979) in respect of an income year ending on or' before 30-6-2002 in the context of `Savings' provided in section 239 of the new Ordinance, 2001.

2. The department in the appeals at Serial Nos.1 and 2/ITA Nos.1418 and 1419(IB)2005 has assailed the combined order, dated 30-6-2005 of the learned CIT(A), Sialkot on the common grounds as under:

(i) that the order of the learned CIT(A) was bad in law and contrary to the facts and circumstances of the case;

(ii) that the learned CIT(A) was not justified to annul the assessment without any cogent reasons;

(iii) that the assessment completed by the Taxation Officer (T.O.) was not lawful because notice under section 114(4) of the Income Tax Ordinance, 2001 was rightly issued as protection to section 56 of the repealed Income Tax Ordinance, 1979 has not been provided in the Income Tax Ordinance, 2001; and

(iv) that the assessment was rightly completed under section 63 of the repealed Income Tax Ordinance, 1979 as said section has been protected in section 239(2) of the Income Tax Ordinance, 2001 and thus the learned CIT(A) was not justified to annul the assessment.

3. In the appeals at serial Nos.3 and 4/I.T.As. Nos.152 and 153(IB)2006, the department has contested the combined order, dated 24-9-2005 of learned CIT(A), Islamabad on the following common grounds for both the years:

(i) that the order of learned CIT(A) was against the facts and circumstances of the case;

(ii) that the learned CIT(A) was not justified to cancel the assessment without any cogent reason; and

(iii) that the assessment was made after providing proper opportunity and after issuing specific notice under section 62 and hence the leaned CIT(A) was not justified in cancelling the assessment without any basis.

4. The department, in the appeals at serials Nos.5 and 6/I.T.As. Nos.351 and 352(IB)2006, has disputed the combined order, dated 28-12-2005 of learned CIT(A), Islamabad on the common ground for both the years as under:-.

(i) that the order of learned CIT(A) was bad in law and facts of the case;

(ii) that the learned CIT(A) was not justified. to annul the assessment by simply observing that the assessment made by drawing powers from two different legislations was not lawful whereas section 114 and Saving provided in terms of section 239 of the Income Tax Ordinance, 2001 clearly empower the Commissioner to call for return of income and make assessment under section 62 of the repealed Income Tax Ordinance, 1979 for the years prior to July 1st, 2002.

5. In the appeals at serials Nos.7 to 9/ITAs Nos. 491 to 493(IB)2006, the department has assailed the order, dated 27-10-2005 of learned CIT(A), Islamabad on the following common grounds for all the years:

(i) that the order of the learned CIT(A) was against facts and circumstances of the case;

(ii) that the learned CIT(A) was not justified to annul the assessment without any basis ;and

(iii) that the learned CIT(A) was not justified to annul the assessment observing that the Assessing Officer drew his powers from two different legislations i.e. Income Tax Ordinance, 2001 and Income Tax Ordinance, 1979, as the department was already in appeal on the same issue.

6. Hence all the above departmental appeals with the prayer for vacating the impugned orders of the learned CIT(A) and restoring that of the Assessing Officer.

7. Briefly the common relevant facts in all the above cases are that the assessments in the cases at serial Nos.1 to 6 and cases at serials 7 to 9 were completed respectively under sections 63 and 62 of the late Income Tax Ordinance, 1979 (hereinafter called the Ordinance, 1979) in respect of assessment years for the period falling prior to 1-7-2002. In the cases at serial Nos. 1 to 6, the assessee failed to file their returns within time and the Assessing Officer issued statutory notices under section 114(4) of the Ordinance, 2001 but that remained without any compliance. Thereafter, in all the said cases, the statutory notices under section 61 were issued but to no response. Therefore, the Assessing Officer finalized the assessments ex parse under section 63 of the old Ordinance, 1979 as per details in the respective assessment orders of the said cases.

8. In the cases at Serial Nos. 6 to 9/ITAs Nos.491 to 493(IB)2006, the assessee filed their returns in response to notice under section 114(4) of the Ordinance, 2001 and the case was processed under normal law because of not qualifying for SAS. Then statutory notice under section 61 was issued and the AR of the assessee attended and filed wealth statement but did not produce books of accounts in support of declared version. The Assessing Officer, after conducting spot inquiries and discussing the case with the AR of the assessee, finalized the assessment under section 62 of the old Ordinance, 1979 as per details in the assessment order.

9. Against the said assessment orders, the assessees preferred their appeals before the first appellate forum and the learned CIT(A) vide impugned separate orders by following a case of Lahore Bench of the Tribunal reported as 2005 PTD (Trib.) 490 annulled/cancelled the assessments.

10. Now the department has assailed the said orders of the learned CIT(A) before us on the grounds enumerated above.

11. These cases were involving an important legal question based on interpretation of the provisions of new Income Tax Law in the context of `Savings' provided in section 239 of the new Ordinance, 2001 regarding some provisions like that of framing of assessments under sections 62 and 63 etc. of the old Ordinance, 1979 in respect of cases falling within the period prior to 1-7-2002. Therefore, this Full Bench has been constituted to decide the legal proposition in the presence of earlier view of the Division Bench of the Tribunal in the case reported as 2005 PTD (Trib.) 490.

12. For the proper assistance of the Bench, learned members of the Lahore Tax Bar Association and the Rawalpindi/Islamabad Tax Bar Association were invited as amicus curiae and learned Advocates, Dr. Ikram-ul-Haq and Hafiz Muhammad Idrees appeared to assist the Court and we are thankful to them for their taking pains for rendering their valuable assistance to us.

13. We have heard the learned representatives of both the parties except in cases at Serial Nos. 1 to 4 and 7 to 9 where the cases on account of absence of the respondents/assessee were proceeded ex paste and only the learned DR/LA were heard. The learned Advocates who appeared as amicus curiae were also heard.

14. First of all Mrs. Shahina Akbar/the learned L.A. of the department, argued the case. She started her arguments with the contention that if an existing statute/law was repealed by re-enactment then the rights/liabilities, and obligations which already stood created under the repealed law could be processed by having recourse to the new enactment. She contended that section 24 of the General Clauses Act, 1897 also saved the rights/liabilities already/stood created under the repealed law which would be enforced as if the old Act had not been repealed. She then referred subsection (2) of section 166 of the repealed Income Tax Ordinance, 1979 and contended that there was a Saving clause in respect of certain provisions of old Income Tax Act 1922. She then contended that in the same context the new Income Tax Ordinance, 2001 also contained `Savings' in its section 239 with regard to certain provisions of assessment etc. under the old Income Tax Ordinance, 1979 to keep alive the matter of assessments in the cases falling prior to 1-7-2002. She then placed reliance on the cases reported as PTD 1985 (Trib.)' 255 and also PLD 1960 Lahore 770. She then read out section 114(3) of the new Ordinance, 2001 for laying emphasis on the point that the Commissioner has also been authorised to call for the return of income for any assessment/tax year prior to enforcement of the new Ordinance, 2001.

15. On the other hand, Mr. C.A. Habib, FCA/learned AR of the assessee in the case I.T.As. Nos.351 to 352(IB)2006 contended that the assessment was made under the old Ordinance, but the notice was issued under the new Ordinance which was not legally justified because the provisions of new Ordinance were not providing for an assessment to be completed under the old Ordinance. He further contended that the assessment was time barred but the assessee could not avail the said relief due to the new Law. He then contended that the assessment was completed under section 63 of the old Ordinance, 1979 which could not be done on account of enforcement of new Ordinance, 2001. He relied upon the case of the. Tribunal reported as 2005 PTD (Trib.) 490 to support the view taken by the learned CIT(A) in the impugned order.

16. Mr. Hafiz Muhammad Idrees, learned Advocate appearing as amicus curiae pointed out about' the various aspects of jurisdiction of the Courts and Tribunals like that of territorial jurisdiction and case ,jurisdiction and jurisdiction after issuance of specific notice. He stated that the Taxation Officer assumed jurisdiction in the instant cases by issuing notice under section 114(4) of the new Ordinance, 2001 but passed assessment orders under section 62 and under section 63 of the old Ordinance, 1979 whereas now the whole of the new Ordinance, 2001 became operative. He then referred the provisions of sections 120, 121, 122 and 123 of the new Ordinance which were dealing with the assessments under the new Ordinance for a tax year ending on or after 1-7-2002. He then contended that best assessment could be framed under section 121(1) by the Commissioner in case of failure to furnish return of income as required by notice under subsection (3) or subsection (4) of section 114 but the assessments in the instant cases have not been framed by the Commissioner as prescribed in section 121 of the new Ordinance, 2001. He tried to explain the effect of Repeal of an enactment and referred section 6 of the General Clauses Act with specific reference to its clause (c) and the `Savings' provided in section 239 of new Ordinance, 2001. His point of view was that only certain acts were saved in section 239 in respect of assessments relating to the assessment years for the period on or before 30-6-2002. He contended that section 56 of the old Ordinance, 1979 has not been saved under section 239 of the Ordinance, 2001 and as such the return could not be called under section 114 of the new Ordinance. He specifically pointed out that jurisdiction assumed under one law could not finally be culminated under another law/repealed law. He gave an example that if a case was registered under Pakistan Penal Code (P.P.C.) then conviction cannot be made under the Hadood Laws. He also referred a case of recovery of wealth tax by a notice of recovery under the Income Tax Ordinance, 1979 and stated that the Hon'ble Lahore High Court, Lahore nullified the recovery proceedings in respect of recovery of wealth tax where notice of recovery was issued under section 92(3) of the Income Tax Ordinance, 1979. He stated that the assessment proceedings along with making of additions and imposing of penalty were different in old and new Ordinances. He further pointed out that if notice under section 114 was issued then the assessment was to be completed under new Ordinance and no addition could be made under section 13(1)(aa) of the old Ordinance. He referred case laws, in respect of pending proceedings and effect of repeal of old law and applicability of the old law to pending cases and effect of an enactment in general, as follows:--

(1) 2004 PTD 1173, (2) 1985 PTD (Trib.) 255, (3) 1997 PTD 821 (Lahore High Court), (4) PLD 1985 SC 376 (Idrees Ahmed and others v. Hafiz Fida Khan), (5) PLD 1964 SC 266 and (6) 2005 PTD (Trib.) 490.

He finally contended that if notice was issued under section 114 then order was to be passed under section 121 of the Ordinance, 2001.

17. Dr. Ikramul Haq, learned Advocate, also appearing on Court call, stated that section 6 of General Clauses Act, 1897 was containing the words `Unless a different intention appears' in its opening para which were also to be kept in view while considering the effect of repeal of an enactment and then its re-enactment. He stated that fiscal law was having specific stature and General Clauses Act was not always strictly applicable to the fiscal statutes. He then referred section 166(1) of the Ordinance, 1979 containing repeal of Income Tax Act, 1922 and section 166(2) containing saving of certain provisions of the old Income Tax Act, 1922 with the words, i.e. "Notwithstanding the repeal of the Income Tax Act, 1922 and without prejudice to the provisions of section 6 or section 24 of the General Clauses Act, 1897." He then referred sections 238 and 239 of the new Ordinance containing the provisions of repeal of the Income Tax Ordinance, 1979 without expressing and `Savings' of certain provisions of the repealed Income Tax Ordinance, 1979 without expressing the words specifically as expressed and stated above in the provisions of section 166 of the. Income Tax Ordinance, 1979. He explained that section 6 of the General Clauses Act will not apply in the situations where the re-enacted law was contained such words but would apply it such words were not expressed in the `Savings' provided in the re-enacted law. He then in the context of section 239 of the new Ordinance, 2001 with regard to framing of assessments in the cases falling within period on or before 30th June, 2002, stated that assessment could be made under section 59 or 59A or 62 or 63 of the repealed Ordinance, 1979 and for the pending proceedings under the old Ordinance, it would be assumed as if the old Ordinance has not been repealed or come into force. He then referred the case of the Allied Motors reported as 2004 PTD 1173 (H.C. Kar.) to support his contentions. He emphasized that the return could be called under section 114 of the new Ordinance in respect of any assessment year for the period falling before 1-7-2002 and then assessment could be framed while applying the provisions of sections 59, 59A, 61, 62, 63 as. the case may be of the old Ordinance, 1979 which have been specifically saved under subsection (2) of section 239 of the new Ordinance, 2001. He further referred a case of the Hon'ble Sindh High Court reported as 2006 PTD 734 (H.C. Kar.). He then contended that section 120 of the new Ordinance, 2001 will not come to the rescue of the taxpayer in respect of any assessment years falling before 1-7-2002 because the assessment under section 120 were relating to tax years ending on or after 1-7-2002. He then referred subsection 4 of section 209 of the new Ordinance and contended that the Taxation Officer shall for the purpose of the Ordinance be treated as the Commissioner and the Taxation Officer has also been defined in Clause (65) of section 2 of the new Ordinance, 2001. He contended that section 209(2) of the new Ordinance, 2001 would solve the issue of continuation of jurisdiction of the Income Tax Authorities. He then contended that the obligations once created will not lapse till the limitation period did not expire and as such notices under section 114(4) could be issued for any previous assessment years even if the assessment of the same was falling within the assessment provisions of old Ordinance, 1979. He referred the case law reported as 1986 PTD (Trib.) 141, PLD 1974 SC 284, PLD .1982 SC 247, 88 Taxation 145 (Trib.), (2003) 87 Tax 230 (H.C. Lahore) 2002 PTD 3106 (H.C. Lahore). He then contended that no vested right could accrue to a person by not filing the return. He also referred 2005 PTR 17 (HC Lah.). He stated that redundancy could not be attributed to a statute and he in that regard referred 2005 PTD 108 (H.C. Lah) and 1960 PTD 574 (H.C. Kar.).

18. We have considered the respective contentions reproduced above of the parties and also points raised by the learned Advocates who appeared as amicus curiae.

19. First of all, it would be appropriate to have a view of the relevant provision of the new Ordinance and the old Ordinance and of the General Clauses Act, 1897 which are reproduced as under:--

Income Tax Ordinance, 2001:--

Section 2(13). "Commissioner" means a person appointed as a Commissioner of Income Tax under section 208, and includes a taxation officer vested with all or any of the powers and , functions of the Commissioner;

Section 2(13A). "Commissioner (Appeals)" means a person appointed as a Commissioner of Income Tax (Appeals) under section 208;

Section 2(65). "taxation officer" means any Additional Commissioner of Income Tax, Deputy Commissioner of Income Tax, Assistant Commissioner of Income Tax, Income Tax Officer, Special Officer or any officer however designated appointed by the Central Board of Revenue for the purpose of this Ordinance;

Section 114(4). Subject to subsection (5), the Commissioner may by notice in writing, require any person who in the Commissioner's opinion, is required to file a return of income under this section for a tax year or assessment year but who has failed to do so to furnish a return of income for that year within thirty day from the date of service of such notice or such longer period as may be specified in such notice or as the Commissioner may allow.

(5) A notice under subsection (4) may be issued in respect of one or more last five completed tax years or assessment years.

Section 238: Repeal-The Income Tax Ordinance, 1979 (XXX1 of 1979), shall stand repealed on the date this Ordinance comes into force in pursuance of subsection (3) of section 1;

Section 239: Saving.---(1) Subject to subsection (2), in making any assessment in respect of any income year ending on or before the 30th day of June, 2002, the provisions of the repealed Ordinance in so far as these relate to computation of total income and tax payable thereon shall apply as if this Ordinance had not come into force.

(2) The assessment, referred to in subsection (1), shall be made by an income tax authority which is competent under this Ordinance to make an assessment in respect of a tax year ending on any date after the 30th day of June, 2002, and in accordance with the procedure specified in section 59 or 59A or 61 or 62 or 63, as the case may be, of the repealed Ordinance,

(3) The provisions of subsections (1) and (2) shall apply, in like Manner, to the imposition or charge of any penalty, additional tax or any other amount, under the repealed Ordinance, as these apply to the assessment, so however that procedure for such imposition or charge shall be in accordance with the corresponding provisions of this Ordinance.

(4) Any proceeding under the repealed Ordinance pending on the commencement of this Ordinance before any income tax authority, the Appellate Tribunal or any Court by way of appeal, reference, revision or proposition shall be continued and disposed of as if this Ordinance has not come into force.

Income Tax Ordinance, 1979:

Section 166. Repeal and savings.---(1) The Income Tax Act, 1922 (XI of 1992) is hereby repealed.

(2) Notwithstanding the repeal of the Income Tax Act, 1922 (XI of 1922) and without prejudice to the provisions of section 6 or section 24 of the General Clauses Act, 1897 (X of 1897).

(a)xxxxxxxxxxx

(b)xxxxxxxxxxx

(c) where in respect of any assessment year,-.

(i) xxxxxxxxx

(iii) any income chargeable to tax had escaped assessment or had been under assessed or assessed at too low a rate, or had been the subject of excessive relief or refund or the total income or the total world income and the tax payable had been determined under subsection (1) of section 23 of the repealed Act and no proceedings under section 34 of the said Act in respect of any such income are pending at the commencement of this Ordinance a notice under section 65 may be issued with respect to that assessment year and all the provisions of this Ordinance shall apply accordingly;

(d) in making any assessment for any year ending on or before the thirtieth day of June, 1979, the provisions of the repealed Act relating to the computation of total income, and the tax payable shall apply as if this Ordinance has not come into force;

General Clauses Act, 1897;

Section 6. Effect of repeal. Where this Act, or any (Central Act) or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not:

(a) revive anything not in force or existing at the time at which the repeal takes effect; or

(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or

(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or

(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or

(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture, or punishment as aforesaid;

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.

Section 6A: Repeal of the Act making textual amendment in Act or Regulation.---Where any Central Act or Regulation made after the commencement of this Act repeals any enactment by which the text of any (Central Act) or Regulation was amended by the express omission, insertion, or substitution of any matter, then, unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal.

Section 24: Continuation of orders etc. issued under enactments repealed and re-enacted.---Where any (Central Act) or Regulation is, after the commencement of this Act, repealed and re-enacted without modification, then unless it is otherwise expressly provided, any (appointment, notification), order, scheme, rule, form or bye-law, (made or) issued under the provisions so re-enacted (and when any) (Central Act) or Regulation, which, by a notification under section 5 or 5A of the Scheduled Districts Act, 1874 (XIV of 1874), or any like law, has been extended to any local area, has, by a subsequent notification been withdrawn from and re-extended to such area or any part thereof, the provisions of such Act or Regulation shall be deemed to have been repealed and re-enacted in such area or part within the meaning of this section."

20. Now we will describe certain broad principles of interpretation o