MAS. NOS.11/LB OF 1990-91, 12/LB AND 13/LB OF 1991-92, DECIDED ON 23RD SEPTEMBER, 1991. VS MAS. NOS.11/LB OF 1990-91, 12/LB AND 13/LB OF 1991-92, DECIDED ON 23RD SEPTEMBER, 1991.
1992 P T D (Trib.) 1641
[Income Tax Appellate Tribunal Pakistan]
Before Muhammad Mujibullah Siddiqui, Judicial Member and Mukhtar Ali Khan, Accountant Member
MAs. Nos.11/LB of 1990-91, 12/LB and 13/LB of 1991-92, decided on 23/09/1991.
Wealth Tax Act (XV of 1963)---
----S. 35---Rectification of mistake---Mistake apparent on the record could be rectified by an authority under the Wealth Tax Act, 1963 either of his or its own motion or at the instance of an assessee---Order passed under the provision of S. 35 though could not be rectified on the application of the department, yet notwithstanding an incompetent application on behalf of the department, rectification of order made by the Tribunal would be deemed to be in exercise of suo motu powers vested in the Tribunal under S. 35.
Ashiq Muhammad Khan v. Chairman, Federal Land Commission PLD 1977 Lah. 461 overruled.
Siraj Din v. Sultan PLD 1990 SC 95 applied. .
Muhammad Saleem Chaudhry for Appellant.
S. Roomi Shah, AC/DR for Respondent.
Date of hearing: 23rd September, 1991.
ORDER
MUHAMMAD MUJIBULLAH SIDDIQU, (JUDICIAL MEMBER).---By the above miscellaneous applications, the applicant/assessee seeks direction for re-calling our order dated 29-5-1991 in miscellaneous applications Nos. 58 to 60,/LB of 1990-91.
2. Briefly stated the relevant facts giving rise to these applications are that W.TA. Nos. 13 to 15 of 1990-91 pertaining to the assessment years 1987-88 to 1989-90 at the instance of department were dismissed by a Division Bench of this Tribunal vide order, dated 23-1-1992. The department subsequently submitted Miscellaneous Applications Nos. 58 to 60/LB/1990-91 under section 156 praying for recalling of the order and rehearing of the appeals. The Miscellaneous applications were heard on 29-5-1991 and were disposed of on the same day. The order dated 23-1-1991 dismissing the departmental appeals was recalled with the direction to refix the appeals for hearing on merits. The applicant/assessee is aggrieved with the order, dated 29-5-1991 and hence this application for recalling the order, dated 29-5-1991.
3. Heard Mr. Muhammad Saleem Chaudhry, learned counsel for the applicant and Mr. S. Roomi Shah learned representative for the department. Mr. Saleem Chaudhry, learned counsel for the applicant has raised following objections before us:--
(i) That the application for recalling of the order was submitted under section 156 of the Income Tax Ordinance, 1979 while the provisions of Wealth Tax Act, 1963 were applicable to the appeal and as such the application could have been submitted under section 35 of the Wealth Tax Act, 1963.
(ii) That the provisions contained in section 156 of the Income-tax Ordinance and section 35 of the Wealth Tax Act, 1963 are not similar. Under section 156 of the I.T. Ordinance, 1919, a rectification can be made suo motu by the authority making the order or at the instance of an assessee or department while under the provisions under section 35 of the Wealth Tax Act, 1963 the rectification can be made by the authority making the order under the Wealth Tax Act, 1963 suo motu or at the instance of an assessee. The department has no right of filing any rectification application.
(iii) Once an application has been moved by an aggrieved party, the order made by the authority shall not be deemed to be a suo motu order.
(iv) The rectification application though incompetent ab initio, otherwise merited no consideration because it was at the instance of the departmental representative and not at the instance of Commissioner of Income Tax who is, competent to prefer appeal before the Tribunal.
(v) The rectification application ought to have been beard by the same Bench which originally heard the appeal.
4. On the other hand, the learned D.R. Mr. S. Roomi Shah has submitted that mere wrong citation of section does not vitiate the proceedings and that the rectification of order should be deemed to have been made in exercise of suo motu powers in the wake of application being incompetent in law. He has further submitted that the D.R. being authorised representative of department can submit an application on behalf of the Commissioner of Income Tax and department, as any authorised representative, can move application on behalf of his client. Mr. Roomi Shah has further contended that the objections relating to hearing of rectification application by the same Bench ought to have been raised at the time of hearing of miscellaneous application. No such objection was taken at that time and, therefore, it cannot be raised at this stage.
5. We have carefully considered the contentions raised by the learned representatives for the parties. Mr. Muhammad Saleem Chaudhry learned counsel for the appellant has frankly conceded that mere wrong citation of law does not vitiate the proceedings. His contention is that the objection is being raised because under section 156 of the Income Tax Ordinance, 1979 the rectification can be made at the instance of the assessee as well as department while under section 35 of the Wealth Tax Act, the rectification can be made at the instance of assessee or suo motu at the instance of the authority making the order. Thus according to him in the facts and circumstances of the case, it is not the question of wrong citation of a particular provision of law only, but it is the question of jurisdiction vested in the Appellate Tribunal in rectifying the order under section 35 of the Wealth Tax Act, 1963. Main thrust of the arguments advanced by Mr. Saleem Chaudhry is that under section 35 of the Wealth Tax Act, 1963 no rectification can be made at the instance of the department and once rectification application has been submitted by the department, the rectification cannot be held in exercise of the suo motu powers but shall be deemed to be in pursuance of rectification application which is not competent in law and consequently the rectification order on the basis of such application shall be deemed to be without jurisdiction, illegal, ultra vires and void. All other objections raised by Mr. Saleem Chaudhry have been argued in a lukewarm manner and rightly so because none of other objections are such on the basis of which any mistake apparent from the record may be shown, justifying recalling of the order. In support of his contention by Mr. Saleem Chaudry has placed reliance on section 35 of the Wealth Tax Act, 1963 which is reproduced below:--
"Rectification of mistakes:---At any time within four years from the date of any order passed by him, or it, the Commissioner, the Wealth Tax Officer, (the Appellate Assistant Commissioner) and the Appellate Tribunal may, on his, or its, own motion rectify any mistake apparent from the record and shall, within a like period, rectify any such mistake which has been brought to the notice of the Commissioner, the Wealth Tax Officer, (the Appellate Assistant Commissioner) or the Appellate Tribunal, as the case may be, by an assessee:
Provided that no such rectification shall be made which has the effect of enhancing the assessment unless the assessee has been given a reasonable opportunity of being heard in the matter."
6. A bare perusal of the above section shows that a mistake apparent on the record can be rectified by an authority under the Wealth Tax Act either of his or its own motion or at the instance of an assessee. The contention of Mr. Saleem Chaudhry that no rectification can be made on the application of department is correct. However, the question if the order passed by this Tribunal be treated in exercise of the suo motu powers vested in it under section 35 still remains for consideration. The contention of Mr. Saleem Chaudhry is that once application has been submitted by the Department which is not competent in law, the rectification shall be deemed to have been made in pursuance of that incompetent application and could not be deemed to be in exercise-of suo motu powers vested in the Tribunal and as such the rectification having been made on an incompetent application would be deemed to be illegal and without jurisdiction. In support of his contention he has placed reliance on a judgment of Honourable Lahore High Court in the case of Ashiq Muhammad Khan v. Chairman Federal Land Commission (PLD 1977 Lahore 461). In this case the provision of para. 29 of Land of Reforms Regulation 1972 (MLR 115) came for consideration before Honourable Mr. Justice Mushtaq Hussain, Judge, in writ jurisdiction. Paragraph 29 reads as follows:
"29. Revisional powers of the Federal Government.--The Federal Government, or any person authorised by it in that behalf, may at any time, of its or his own motion or otherwise call for the record of any case or proceeding under this Regulation which is pending or in which a Commission or any other authority appointed under this Regulation, other than the Federal Land Commission constituted under paragraph 4-A, has passed an order,-for the purpose of satisfying itself or himself about the correctness, legality or propriety of such an order, and may pass such order in relation thereto as the Federal Government or, as the case may be, such person thinks fit: Provided that the Federal Government may, from time to time, specify the cases or class of cases in which it desires to pass final orders:
Provided further that no order shall be passed under this paragraph revising or modifying an order affecting any person unless such person has been afforded an opportunity of being heard:
Provided further that the record of any case or proceedings in which a Commission or other authority has passed an order shall not be called for under this paragraph by the Federal Government or the person authorised by it--
(a) of its or his own motion, after the 14th of August 1974, or
(b) on the application of any aggrieved person made after the expiration of sixty days from the date of such order or from the enactment of the Land Reforms (Amendment) Act, 1973, whichever is later, excluding the time requisite for obtaining a copy of such order."
In the facts and circumstances of the above-cited case, various questions were formulated by the Honourable Lahore High Court for consideration, out of which the following three questions are relevant for our purpose:--
"(i) Was in the instant case the authority exercised suo motu;
(ii) If not, was it exercised on the basis of an application of an aggrieved person made within limitation;
(iii) If the period of limitation had expired, would the order be without jurisdiction."
7. Briefly stated the relevant facts were that the Chairman, Federal Land Commission exercised revisional jurisdiction under para. 29 of the 'Land Reforms Regulation, 1972 on application of an aggrieved person which was made after the expiry of period of limitation provided for submission of such application by an aggrieved person while no period of limitation was provided for taking action suo motu. The relevant finding of the Honourable Lahore High Court is reproduced below:--
39. I now come to the question whether the authority purported to have been exercised in passing the impugned order was exercised suo motu or at the instance of an applicant.
40. Paragraph 29 under which the authority is purported to have been exercised lays down in its third proviso that the power may not be exercised either (a) of its or his own motion after the 30th of September, 1975.
(b) On the application of any aggrieved person made after the expiration of sixty days from the date of such order or from the enactment of the Land Reforms (Amendment) Act, 1973, whichever is later excluding the time requisite for obtaining a copy of such order.
41. The expression "of its or his own motion" is not unknown to law. It is a term of art and is meant to cloth an authority with the power to act even when it has not been moved by anybody to do so. Information leading to such action would ordinarily be expected to come to the knowledge of an authority during an inspection of the office of the subordinate authority or during the course of any other proceedings So long as an authority has not been moved by a person to act, the person not being necessarily aggrieved himself, the authority would be deemed to have proceeded of its own motion.
42. When, however, a person, particularly one who is aggrieved, moves an authority in the matter, any action taken by that authority consequent upon such application cannot by any stretch of imagination be dubbed as action of "its or his own motion". The importance of this distinction would partly rest upon whether the circumstances in which an authority can move of its own motion and those in which it moves on an application being presented are subject to different limitations."
8. A perusal of the provisions contained in paragraph 29 of the Land Reforms Regulation, 1972, reproduced above and the findings of the Honourable Lahore High Court, cited above, shows that it is on all fours to facts of the present case.
9. However, Mr. Roomy Shah, learned representative for the department has produced a recent ruling of Honourable Supreme Court of Pakistan in the case of Siraj Din v. Sultan (PLD 1990 SC 95) in which a different view has been taken. In this case also a similar question came for consideration before tile Honourable Lahore High Court in Writ Petition No.3175/75 which was decided on 22-4-1976. In this case also the question for consideration was, if the Land Commission could review the order on the application of appellant if the same was barred by time. In this case the question came for consideration with reference to the power of review vested in the Chief Land Commissioner under Rule 12 of the Punjab Land Reforms Regulation, 1972 which reads as follows:---
"Review---(1) The Chief Land Commissioner, the office to whom the case was transferred for final disposal under rule 5(2)(a), a Land Commissioner, Legal Adviser, a Deputy Land Commissioner, an Assistant Land Commissioner, or a Sub-Assistant Land Commissioner, may at any time, of his own motion or within twenty days from the date of the impugned order; on an application of any party interested therein made to him in that behalf, review and on so reviewing modify, reverse or confirm, any order made by himself or by any of his predecessors-in-office."
10. In this case also the Land Commissioner exercised power of review on the application of an interested party which was barred by time and the Honourable Lahore High Court took the same view as has been taken in the case of Ashiq Muhammad Khan v. Chairman, Federal Land Commission (Supra) relied upon by Mr. Saleem Chaudhry, learned counsel for the applicant. The Honourable Supreme Court of Pakistan did not approve the view taken by the Honourable Lahore High Court and Honourable Mr. Justice Naeem-ud-Din (J) held as follows:--
"7. However, the question is whether the High Court could -interfere with the order passed by the Land Commissioner in exercise of the power of review. There is no doubt that the application for review by an interested party could be made within 20 days. But the Land Commissioner unquestionably had power to review his order own without any time limit. He did so because the order sought to be reviewed was passed in disregard of the statutory provision and injustice was done to the appellant who had superior right and claim to the land qua the respondent. By doing so he had done justice between the parties. His order could not be termed as without lawful authority simply because the appellant had moved beyond time. He could dismiss the application and yet' could act suo motu on the information laid before him. Once he had jurisdiction and passed order in exercise thereof, the High Court could interfere only if the order was without jurisdiction or in other words without lawful authority. At least the High Court should not have exercised its jurisdiction under Article 199 of the Constitution which is discretionary to perpetuate an illegality or injustice done to the appellant. In the case of Mst. Fehmida Khatoon v. Additional Deputy Commissioner (Consolidation), Lahore and another PLD 1975 Lahore 942, the High Court had treated an application for review, which was barred by time, as one under section 151, C.P.C. as the Court was satisfied that there had been a flagrant abuse of its own process and removal of an apparent injustice done to the appellant was found necessary. Reliance was placed on Kawdu v. Berar Ginning Co. Ltd., AIR 1929 Nag. 185. In that case the order was obtained in the absence of a person, named Narayan, whose presence was otherwise necessary for the adjudication of the question involved. When Narayan came to know about the order he made an application for review of the same. His application being time-barred was held to be otherwise liable to be treated as an application under section 151, C.P.C. for removing the apparent injustice done to him on account of his non-impleading as party in-the case.
8. It may be stated that an interested person cannot claim as of right review of an order passed earlier if his application has become barred by time. However, when a statutory functionary is given power to review his own order or revise an order without any tilde limit that power can be equated with inherent power possessed by a Civil Court under section 151, C.P.C., or by a Criminal Court under section 516-A, Cr.P.C., to do complete justice or advance the cause of justice. Therefore, the Land Commissioner could review the order by him or his predecessor-in-office at any time if illegality of the order was apparent on the face of the record and injustice was done to the appellant irrespective of the fact that his application had been barred by time."
11. In view of the above judgment of the Honourable Supreme Court of Pakistan, the view taken by the Honourable Lahore High Court in the case of Ashiq Muhammad Khan v. Chairman, Federal Land Commissioner (Supra) stands overruled and the law prevailing for the time being in force is as pronounced by the Honourable Supreme Court of Pakistan in the case of Siraj Din v. Sultan (Supra). Mr. Saleem Chaudhry, the learned counsel for the applicant has though stated that the ruling of Honourable Supreme Court of Pakistan cited by the learned D.R. is distinguishable but he is not able to substantiate his contention. We are of the considered opinion that the law as propounded by the Honourable Supreme Court of Pakistan in the case cited above, is fully applicable to the facts and circumstances of the present case. It is, therefore, held that although an order passed under the provisions of Wealth Tax Act, 1963 could not be rectified on the application of the department, however, notwithstanding an incompetent application on behalf of the department, the rectification of order made by this Tribunal shall be deemed to be in exercise of the suo motu powers vested in this Tribunal under section 35 of the Wealth Tax Act, 1963 and thus there is no mistake in the order of this Tribunal, dated 29-5-1991 and the question of recalling thereof does not arise. As already observed, the other objections taken by Mr. Saleem Chaudhry, are of no legal consequence and in any case do not warrant the recalling of the order, dated 29-5-1991, therefore, the applications are held to be devoid of substance and stand dismissed accordingly.
M.BA./1721/T ??????????????????????????????????????????????????????????????????????? Applications dismissed.