I.T.AS: NOS.1363/HQ OF 1990-91 AND 7270/KB OF 1992-93, DECIDED ON 8TH AUGUST, 1992. VS I.T.AS: NOS.1363/HQ OF 1990-91 AND 7270/KB OF 1992-93, DECIDED ON 8TH AUGUST, 1992., 1992 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 1587 (1992)

(a) Income Tax Ordinance (XXXI of 1979)---

----S.130---Appeal---Limitation---Delay in filing appeal cannot be condoned on compassionate ground---Commissioner condoning delay of about six years, held, had apparently and palbably gone very much out of his way in condoning most inordinate delay of about six years in filing the appeal---Appellant was supposed to explain the delay for each and every day.

1986 PTD 698; AIR 1927 Lah. 717 and AIR 1934 Lah. 647 ref.

(b) Income Tax Ordinance (XXXI of 1979)---

----S.135---Appeal before Appellate Tribunal---Legal plea can be raised for the first time in appeal before The tribunal.

(c) Income---

---- Jurisdiction---"Error of jurisdiction" and "error in jurisdiction"---Distinction and connotation.

In law there are errors of jurisdiction and errors' in jurisdiction. An error of jurisdiction is said to be that which is the result of inherent lack of jurisdiction. If an assessing officer has no jurisdiction to frame an assessment order against an assessee for any reason whatsoever his order would suffer from error of jurisdiction. However, if he has jurisdiction to proceed with the matter and in exercise thereof he commits error in arriving at some finding or decision, it is called an error in jurisdiction. If an assessing officer commits an error of jurisdiction, the proceedings before him are said to be coram non judice (this expression literally means "in the presence of a person who is not a judge") and if he delivers an order or decision or judgment it is called a nullity as it is result of an error of jurisdiction which is merely incurable.

PLD 1963 Lah391; Wharton's Law Lexican, 14th Edn. and Black's Law Dictionary, 5th Ednref.

(d) Income Tax Ordinance (XXXI of 1979)---

----S.130---Appeal---Limitation---If an order is a nullity, an Appellate Authority can ascertain and decide an appeal even if it is time-barred.

Syed Mehmood Alam v. Syed Mehdi Hussain PLD 1970 Lah. 6 ref.

(e) Income-tax---

----Appeal---Merger---Judgment of lower Court merges in the appellate order when the order appealed against is either affirmed or confirmed or overruled---Where the order appealed against is set aside the lower Court is revested with all the powers of deciding it de novo.

1986 PTD 408 ref.

(f) Income-tax---

----Res judicata, doctrine of---Before principle of res judicata is applied the matter should have been finally heard and decided.

PLD 1983 Kar. 269 and 1991 PTD 16 (Trib.) ref.

(g) Income-tax---

----Res judicata---Principle of constructive res judicata---Where a ground of attack or defence which could have been taken but. is not taken, it cannot be subsequently agitated as it is deemed to have been barred by principle of constructive res judicata.

1988 PTD (Trib.) 775 ref.

(h) Income-tax--

----Estoppel---If a person changes his position because of the representation made by another person, such another person is estopped from making a contrary representation-subsequently.

Asrar Rauf and Noor Muhammad, D.Rs. for Appellant.

Aminuddin Ansari for Respondent.

Dates of hearing.: 25th July and 5th August, 1992.

ORDER

Mr. Asrar Rauf, the learned Departmental Representative, supporting the departmental appeal, vehemently attacks the condonation of 6 years' delay in filing appeal.

2. According to him, the learned Commissioner of Income Tax (Appeals) fell in serious error when he ignored the facts that the appellant had not only filed the income-tax returns for assessment years 1984-85 to 1987-88 but also contested the assessment proceedings relating to assessment year 1987-88 not only before the Income Tax Officer but also in appeal. According to him, even the M.D. of the appellant appeared before the learned C.I.T. (A) on 24-5-1988 in appeal relating to assessment year 1987-88. Alternatively, he also argues that the learned C.I.T.(A) was not justified in bringing down the applied G.P. rate of 20% to 15%. He, therefore, concludes that the impugned order recorded on 2nd March, 1991 relating to assessment year 1983-84 be vacated.

3. Mr. Aminuddin Ansari, the learned counsel for the respondent, on the other hand, supports the impugned order for several reasons. Firstly, he argues that since the assessment order was a nullity in law there was no limitation required for filing the appeal. In this connection, he places his reliance on a decision reported as PLD 1970 Lahore 6 -- Syed Mehmood Alam v. Syed Mehdi Hussain. Elaborating his argument, the learned counsel points out that in case of building contractor the profit could be taxed only when at least 1/3 of the whole work has been completed. In this context, he has invited my attention to a decision of this Tribunal reported as 1988 PTD (Trib.) 310. According to him, in assessment year 1983-84, the work was executed at 23.2% only. In his support, the learned counsel has also referred to C.B.R. Circular No.2 of 1975. The learned counsel concludes that since the assessment order was contrary to the decision of this Tribunal mentioned above as well as C.B.R. Circular, which was in any case binding on the Income Tax Officer, the assessment order was a nullity. Advancing second leg of his argument, the learned counsel submits that the respondent had filed appeal in this Tribunal against the assessment order relating to certain add-backs which was disposed of as I.TA. No.987/HQ of 1990-91 on 6-8-1991 by a Division Bench of this Tribunal and the department neither invited the attention to their appeal nor raised objection regarding condonation of delay by the learned Commissioner of Income-tax (Appeals). According to him, now it is not permissible for them to raise this objection in this appeal for the reason that the assessment order stood merged finally in the order of this Tribunal. The learned counsel contends that the fact that the department has again come up in appeal against the order of learned C.I.T. (A) recorded afresh pursuant to the direction of this Tribunal, makes no difference to the merits of his contention.. He fortifies his submission by relying upon a decision of Lahore High Court reported as PLD 1976 Lah. 761. Relying upon a decision of Sindh High Court reported as PLD 1983 Kar. 269 -- Farrukh Chemical Industries v. CIT and a decision of this Tribunal reported as 1991 PTD 16 (Trib.) the learned counsel has also argued that the departmental appeal was barred by res judicata and estoppel. Alternatively, the learned counsel argues that in any case there was sufficient ground supported by medical certificates to justify the condonation of delay. Turning to merits of the appeal, the counsel submits that the assessing officer wrongly rejected the trading results when all the relevant material was produced before him. In any case, the application of 20% G.P. rate was not justifiable, argues Mr. Ansari. He, therefore, concludes that the order of learned CIT(A) is unexceptionably sound and calls for no interference.

4. I have given due consideration to the submissions made at Bar. However, I think that before entering into discussion on merits, let me recapitulate all the relevant facts. From perusal of the assessment order, it is clear that the respondent is a construction company and in the relevant assessment year was engaged in constructing Kashif Chambers. It is also clear from its perusal that it filed its return on 17-1-1984 decraling its income at Rs.30,181. Since the return was late by 2 days the case was selected for detailed scrutiny. The I.T.O. sent notices under section 61 on 14-3-1984, 7-5-1984 and 23-5-1984. The first two notices remained un-responded but in reply to the 3rd notice, some details were filed. The I.T.O., therefore, was constrained to issue other notices on 2-6-1984 and 10-6-1984 which again remained uncomplied with. On 17-6-1984, another notice was issued and the respondent filed some details. The I.T.O. once again issued notices on 12-8-1984, 17-10-1984 and 24-10-1984 but once again failed to elicit any response. However, on 27-1-1984, the respondent sought extension for compliance but the I.T.O. declined to grant any adjournment and finally on 25-11-1984, the M.D. of the respondent appeared before him. While framing assessment order the Income Tax Officer has made the following pertinent remark:---

.....assessee-company has deliberately avoided to produce books of accounts relating to his site work and expenses incurred to continue his contract. The company is supposed to maintain site register, work in progress record, material consumption register, stock register, wages register, receipts and payments register, purchases register. All these registers and b6oks of accounts were required by the undersigned vide' different notices issued under section 61. Assessee never produced any books of accounts or requisite registers to substantiate and support his declared version relating to different expenses claimed in trading and P&L account. Assessee has furnished unaudited copy of balance-sheet and trading and P&L account ...."

The Income Tax Officer finding both the debit and credit side of the accounts of the respondent unreliable for the reasons disclosed in his assessment order not only rejected the trading results but also applied 20% G.P. rate on the strength of two parallel cases bearing NTN 14-10-3371093 and 14-10-3368143.

5. From persual of the impugned order, it appears that the demand notice was admittedly served on the respondent on 25-3-1985 whereas the appeal was filed on 28-1-1991. Since it was patently time-barred, an application under section 5 of the Limitation Act read with section 130(3) of the Income Tax Ordinance, 1979 was also moved. An affidavit of the M.D. of the respondent was also filed wherein it was stated that he was an old heart-patient and underwent by-pass surgery in December, 1985. It was also stated that the son of the M.D. of the respondent was also a heart-patient and he died of heart-failure on 14-9-1990. A letter of Killing. Back Hospital, Leads, U.K. dated 16-1-1986 and a discharge certificate dated 23-12-1985 were also produced. On this material the learned C.I.T.(A) condoned the delay with the following observation:

" ..in view of the foregoing facts and evidence filed, the delay in filing of appeal is condoned is the interest of natural justice and on compassionate ground ."

It also emerges out from the impugned order that the application of 20% G.P. rate to the declared receipts was also disputed before learned C.I.T.(A) on the ground that the assessment order was contradictory inasmuch as at one place he staed that no books of accounts or details were produced but at another place he admitted that details were filed.

6. The next argument advanced before the learned C.I.T.(A) appears to be that the declared results should have been accepted as per C.B.R.s Circular No.2 of 1975. In this connection, the attention of the learned C.I.T.(A) was invited to a decision reported as 1988 PTD (Trib.) 310 and a decision reported in I.TA. No.66/HQ of 1990-91 on 23-12-1990. The case of the respondent before learned C.I.T.(A) also was that provisional G.P. rate at 15% was satisfactory in view of numerous parallel cases. On the basis of this argument, the learned C.I.T.(A) accepted the appeal on merits as well with the following remarks:---

" .The foregoing contentions of the A.R. of the appellant have a lot of force. In majority of similar cases a provisional G.P, rate of 15% is being applied. The declared result was therefore, satisfactory and is, therefore, accepted .."

With this background, let me now revert to the submissions of both the parties.

7. The main thrust of argument of Mr. Asrar Rauf is that the delay of about six years in filing appeal is mala fide inasmuch as the assessment orders for assessment years 1984-85 to 1986-87 were framed under Self-Assessment Scheme and assessment order for 1987-88 was framed on regular basis in which G.P. rate of 20% was applied and the respondent went up in appeal before the learned C.I.T.(A). The pith and substance of the argument of the learned D.R. is that if the returns could be filed in all the assessment years beginning from 1984-85 to 1987-88 and assessment orders have been framed even on regular basis out of which an appeal was also filed before the learned C.I.T.(A) how come that by-pass surgery could prevent the respondent from filing the appeal for this assessment year for about six years. The argument of learned D.R. carries much weight. In my legal career stretching over about 30 years, I have not come across a case in which delay of about six years would have been condoned. Of course, I have read cases in which the delay in filling appeal in Court having the jurisdiction was condoned for the reason that the proceedings were originally initiated in a wrong Court under mistaken legal advice. Readily I can refer to a case from Bombay High Court which is reported as 1986 PTD 698 where the delay of 520 days was condoned for aforesaid reason but the delay of about six years is most unusual which has made me flabbergasted and I could read much in between the lines. I am sorry to observe that I find substantial force in the submission of Mr. Asrar Rauf that if the respondent could file regular appeal in the assessment year 1987-88 how could it be held that it remained prevented by sufficient reasons from filing the appeal in the assessment year under consideration for about six years.

8. It is trite law that in those cases where an appeal is time-barred the appellant has to explain the delay of every day. If an authority is needed for this proposition, reference can be made to two decisions of Lahore High Court reported as AIR 1927 Lah. 717; AIR 1934 Lah 647 which have been reigning fieled for a very long time. However, from perusal of the impugned order, it appears that by-pass surgery was made in December, 1985 on the heart of the M.D. of the respondent. The discharge letter is also dated 23-12-1985. The sad and untimely demise of the young son of the M.D. of the respondent is said to have taken place on 14-9-1990. The heart of every one would go out in sympathy to the M.D. of the respondent. However, the appeal before learned C.I.T.(A) was filed on 28-1-1991. Thus, firstly it was to be explained by the respondent as to why the appeal could not be filed in between 26-3-1985 and 22-12-1985. Again it was the duty of the respondent to explain as to why appeal could not be filed between 23-12-1985 and 28-1-1991. Even if it is assumed that the respondent was prevented by the sickness of the son of the M.D. of the respondent from filing the appeal even this was to be explained as to why the appeal could not be filed between 15-9-1990. and 27-1-1991. It is also trite law that the burden of proof in such matters lies squarely on the shoulders of a person who seeks condonation of delay. Thus, it was the duty of the respondent to explain the delay of each and every day. This burden of proof became all the more heavier in view of the fact that the respondent not only filed appeal before learned C.I.T. (A) in the assessment year 1987-88 on 12-5-1988 but also because its same M.D. even appeared before learned C.I.T.(A) on 24-5-1988. I am really shocked to notice that Commissioner of Income Tax (Appeals) having vast experience of about 33 years could be persuaded to condone the delay of about six years "in the interest of natural justice and on compassionate ground". I am at a loss to understand as to what principle of natural justice was found by learned C.I.T.(A) to have been violated. It is also beyond my comprehension as to how the limitation can be condoned merely on compassionate ground. I do not think that any assessing officer or for that matter C.I.T.(A) or even this Tribunal has powers of acting on one's whims. None of us has been vested with the powers of a monarch whose even impulsive and whimsical action has the support of his regal powers, If under going a bypass surgery or death of a son of an assessee is taken to be a compassionate ground then neither any appeal would ever become time-barred nor any revenue shall be collected for the simple reason that bypass surgery is very common in affluent part of our society and death is a natural phenomena which inevitably strikes every taxpayer and the members of his family. I am, therefore, of the considered view that the learned C.I.T.(A) has apparently and palpably gone very much out of his way in condoning most inordinate delay of about six years in filing the appeal. However, the matter does not end here as Mr. Ansari has vehemently tried to support the impugned order by his forensic knowledge and ability.

9. The learned counsel argues that since the assessment order was a nullity, therefore, no period of limitation was required. It is clear from the impugned order that this plea was not canvassed before the learned C.I.T.(A). However, since it is purely a legal plea, I think that the learned counsel is within his rights to raise it for the first time before me. I, there for, turn to examine its merits.

10. In law there are errors of jurisdiction and errors in jurisdiction. An error of jurisdiction is said to be that which is the result of inherent lack of jurisdiction. If an assessing officer has no jurisdiction to frame an assessment order against an assessee for any reason whatsoever his order would suffer from error of jurisdiction. However, if he has jurisdiction to proceed with the matter and in exercise thereof he commits errors in arriving at some finding or decision, it is called an error in jurisdiction. Mr. Justice Manzur Qadir, an illustrious legal personality of Pakistan, has dealt with this issue in a decision of Lahore High Court reported as PLD 1963 Lah. 391 when his Lordship was its Chief Justice. According to his Lordship objection raised to the proceedings are different from objection raised in the proceedings and thus his Lordship has referred to the error of jurisdiction by the former and error in jurisdiction by the later expression. If an assessing officer commits an error of jurisdiction, the proceedings before him are said coram non judice (this expression literally means "in the presence of a person who is not a Judge") and if he delivers an order or decision or judgment it is called a nullity as it is result of an error of jurisdiction which is merely incurable. (Please see Wharton's Law Lexicon, pith Edition and 13ka:k's Law Dictionary, 5th Edition.)

11. The argument of Mr. Ansari is that the order of the I.T.O was a nullity because as per C.B.R. s Circular and a decision of this Tribunal, the I.T.O. had no jurisdiction to frame an assessment order in case of an assessee deriving his income from construction work if it was not executed to the extent of 1/3. However, from perusal of the assessment order, it is clear that this plea was not raised before the assessing officer. Nevertheless, before the learned C.I.T.(A), reference is made to both C.B.R. Circular 2 of 1975 and a decision of this Tribunal. Let me, therefore, now turn to the Circular and decision of this Tribunal to find out as to whether the I.T.O. suffered from lack of inherent jurisdiction so as to render his assessment order a nullity.

12. For the benefit of all concerned, I am reproducing herein-below C.B.R. Circular No.2.of 1975 and it reads:

(2) Because of changes in the income-tax law in Pakistan and other factors, it has become necessary to modify the instructions of 1946. Board desires that henceforth in making assessment of contractors, the following procedure should be followed for computing profits of a contract which takes more than one year to complete:

(i) Profits may be computed from year to year during the currency of the contract in the normal manner on the basis of actual receipts and accounts for each year.

(ii) When the contract is completed, the total profits of the contract should be computed. The profits already assessed in the earlier years for that contract should be deducted from the total profits in these years of the contract for which assessments have yet to be made.

(iii) Where the contract, on completion, results in loss or profit than what has already been assessed in respect of that contract, the loss or profit may be allocated to the years of the contract. The assessments for the pending years may be made on the amount allocated to each of those years. As for the assessments already completed for earlier years these may be revised by the Commissioner of Income Tax under section 138.

(3) The allocation of profit or loss is to be made on the basis of receipts for each year.

(4) These instructions, which supersede the instructions of 1946, apply only to those contractors who keep regular. accounts and where the total profit of a contract on completion is accounts, subject to such adjustments for inadmissible expenses, as may be necessary."

13. I am afraid, from perusal of aforesaid Circular, I do not find anything in it which-might have taken away the jurisdiction of the I.T.O. On the other hand, its paragraph (1) of clause (2) specifically lays down that in case of companies deriving their income from construction business, the profit may be computed from year to year during the currency of the contracts in the normal manner on the basis of actual receipts and accounts for each year. It is perhaps on the basis of this Circular that the respondent declared its income at Rs.30,181. As such, I do not find anything in aforesaid Circular in view of which the assessment order could be called a nullity.

14. Mr. Aminuddin Ansari has also relied upon a decision of this Tribunal in order to fortify his submission that the order of the I.T.O. is a nullity. However, with due respect to him, I could not persuade myself to accept his contention. In the case reported as 1988 PTD (Trib.) 310 a Division Bench of this Tribunal of which I was also a Member made the following observation:

" ..No definite rule can be laid down as to at what stage of the work it would be safe to take credit for the profit on incomplete contracts, as so much would depend on the nature of the contract and the actual facts and circumstances. The general rule, however, that can safely be laid down is that no profit be ascertained unless at least one-third of the whole work has been completed:'

This observation has been made on the basis of opinions expressed in Batliboi's Advance Accountancy. However, the contention of Mr. Aminuddin Ansari is that since the work done during assessment year 1983-84 was to the extent of 23.2%, therefore, in view of aforesaid decision of this Tribunal, the I.T.O. had no jurisdiction to proceed with the matter. I am afraid, once again I kind no force in the submission of Mr. Ansari for the simple reason that the respondent did not raise this issue before the I.T.O. so that he could have ascertained the percentage of work done during relevant assessment year. On the contrary the respondent itself filed return declaring income at Rs.30,181. When the return was filed, the I.T.O. had to proceed according to law which he did. I am, therefore, unable to find lack of inherent jurisdiction in I.T.O. for this reason as well.

15. Now, turning to the next submission, I agree with the contrition of Mr. Aminuddin Ansari that if an order is a nullity, an appellate authority can ascertain and decide an appeal even if it is time-barred as this contention is fortified by a Division Bench decision of Lahore High Court recorded in Mehmood Alam's case (supra). Nevertheless, I am unable to hold that the assessment order was a nullity for the reasons given above.

16. The next argument of Mr. Aminuddin Ansari, the learned counsel for the respondent is that since an appeal was filed by the appellant against same assessment order, therefore, the assessment order stood merged in the appellate order, dated 6-8-1991 and the present appeal of the department has been rendered redundant. He has filed photo copies of the decision of this Tribunal recorded in ITA No. 987/HQ of 1990-91, dated 6-8-1991. From its perusal, it appears that the appeal was filed against certain add-backs made out of P&L account expenses. It further appears that on the date of hearing, nobody turned up for the appellant of that appeal and the learned Division Bench set aside the order of the learned C.I.T. (A) because his observation that the add-backs were keeping with the past history was found to be "far from the truth". However, with due respect to the learned counsel for the respondent, I find no merit even in his this contention. He has relied upon a decision of Lahore High Court recorded in Begum Mumtaz Jamal's case with which I respectfully agree. The law of merger has also been elaborately dealt with by a Full Bench of this Tribunal in a case reported as 1986 PTD 408. However, it is important to note that a judgment of lower Court merges in the appellate order when the order appealed against is either affirmed or confirmed or over-ruled. In these cases where the order appealed against is set aside the lower Court is re-vested with all the powers of deciding it de novo. As such, the order of learned C.I.T.(A) did not stand merged in the order of this Tribunal. It is pertinent to note that the respondent attacked only that part of the impugned order which was pertaining to the add-backs whereas the department attacked the same order relating to the condonation of delay of about six years. It is also very important to note that on 6-8-1991 when the appeal filed by the respondent was decided by this Tribunal, this appeal was also pending in this Tribunal as it was filed on 25-5-1991. Thus, on 6-8-1991 this Tribunal was seized of both the issues in two separate appeals pertaining to two separate issues. Under these circumstances, I am not prepared to hold that the issue regarding condonation of delay stood merged in the order of this Tribunal recorded on 6-8-1991. This plea of Mr. Ansari also stands rejected accordingly.

17. Taking last resort to the plea of res judicata and estoppel, Mr. Ansari, the learned counsel for the respondent, has tried to make the impugned order survive in this Tribunal. In this connection, his reliance is on an authority reported from Karachi High Court as PLD 1983 Kar. 269 and a decision of this Tribunal reported as 1991 PTD (Trib.) 16. The former deals with the principle of res judicata in tax matters whereas latter applies the principle of estoppel. (sic) of law of res judicta is on the one hand, to make a dispute attain finality and on the other hand to avoid injustice of vexing a person twice in respect of same matter in dispute. The contention of Mr. Ansari is that since this Tribunal heard and decided I.TA. No.987/HQ of 1990-91 on 6-8-1991 the dispute stood finally settled between the assessee and the department. The present appeal, therefore, argues the learned counsel, is barred by principle of res judicata. But with due respect to the learned counsel, before principle of res judicata is applied the matter should have been finally heard and decided. Unfortunately, the dispute regarding condonation of delay has not been heard and finally decided in the decision of this Tribunal recorded on 6-8-1991 although at that point of time it was pending for disposal. As such, the principle of res judicata would not apply. Although Mr. Ansari has not argued it yet I deem it proper to discuss even the principle of constructive res judicata. According to this principle a ground of attack or defence which could have been taken but is not taken cannot be subsequently agitated as it is deemed to have been barred by principle of constructive res judicata. A Full Bench of this J Tribunal agitated this principle in a decision reported as 1988 PTD (Trib.) 775. I am sorry to observe that even this principle of constructive res judicata is not available to the learned counsel for the respondent, for the simple reason that the department has filed this appeal against the order of the learned C.I.T.(Al relating to condonation of delay and the same was pending on 6-8-1991 when the appeal filed by the respondent relating to add-backs only was heard and decided. Thus, the finding of the learned C.I.T.(A) which aggrieved the department has been raised in this appeal and the condition of not raising the ground of attack or defence has not been fulfilled. It is therefore obvious that even the principle of constructive res judicata does not help the respondent and the argument on this point also stands rejected.

18. Now as far as the plea of Mr. Ansari regarding estoppel is concerned, I am sorry to observe that it is also untenable. If a person changes his position because of the representation made by another person, such another person isestopped from making a contrary representation subsequently. A Division Bench of this Tribunal has applied the principle of estoppel in the decision relied upon by Mr. Ansari in a case in which the ground taken by the assessee at the stage of first appeal was not argued at the time of hearing before the first appellate authority. However, under (sic) this appeal, the department cannot be estopped from pressing its appeal against the impugned order relating to condonation of delay for the simple reason that this appeal was pending at the time of disposal of respondent's appeal on 6th August, 1991 and preferably both of them should have been heard together but unfortunately, it could not be done so and for this, both the department as well as the respondent are to be equally blamed. Under Rule 12 of the Income Tax Appellate Tribunal Rules, a person filing an appeal has to serve notice of appeal alongwith grounds of appeal upon the other party and a certificate to that effect is to be filed. Such certificate is on record of this appeal and it shows that the memo. and grounds of appeal were served on the respondent. An acknowledgement receipt dated 21st May, 1991 signed by someone on behalf of the respondent is also on record of this appeal. Thus, on 6th August, 1991, when the respondent's appeal was heard, both the department and the respondent had the notice of appeals tiled by both of them. The respondent should have known that the department had disputed the condonation of delay of about six years and it could have easily invited the attention of the Tribunal to the appeal filed by the department if it wanted to be heard by the same Bench on the same date. However, in spite of satisfactory service of hearing notice, it elected to be absent on 6th August, 1991. On the other hand the Departmental Representative also acted negligently in the bringing to attention of the learned Bench the appeal filed by it. Under these circumstances, I am not prepared to hold that the department is estopped from arguing this appeal filed against the impugned order regarding condonation of delay, Let me also mention here that when the departmental appeal was pending in this Tribunal, it was also our duty to fix it alongwith the appeal filed by the respondent so that both of them could have been heard and disposed of together. Thus, our registry also cannot be exonerated from their inefficiency. Under the facts and circumstances discussed above, I am not prepared to hold that the departmental appeal is barred by estoppel for the simple reason that even if it is held that the department should not have allowed the appeal filed by the respondent to be disposed of without hearing this appeal yet in view of the notice served under rule 12 of the Income Tax Appellate Tribunal Rules, it cannot be said that the respondent in any way changed their position on any sort of representation made by the department.

19. Mr. Aminuddin Ansari produced on the date of hearing the copy of the order of learned C.I.T. (A) dated 12th March, 1992 whereby he has decided the issue afresh pertaining to the add-backs pursuant to the direction of this Tribunal contained in the decision dated 6th August, 1991. Mr. Asrar Raouf, the learned D.R. on the other hand, has pointed out that the department has come up in appeal against that order also. Thus, the Tribunal is seized of both the issues once again which can conveniently be disposed of by this consolidated order. I, therefore, with the consent of both the learned counsel for the respondent as well as learned D.R. heard both of them again on 5th August, 1992. However, since I am of the view that the appeal before learned C.I.T.(A) was hopelessly time-barred and he erred in condoning it, I, therefore, do not enter into merits of both appeals, filed by the Department.

20. In view of discussion made above the departmental appeal filed against the impugned order regarding condonation of delay is allowed and the appeal filed by respondent before learned C.I.T.(A) stands dismissed as hopelessly time-barred. Similarly the other appeal filed by the department relating to the add-backs is also allowed for the same reason but no order on merits is recorded.

21. Both the appeals stand disposed of accordingly

M.BA./1689/T

Order accordingly,