I.T.A. NO. 250/IB OF 1989-90, DECIDED ON 14TH SEPTEMBER, 1992. VS I.T.A. NO. 250/IB OF 1989-90, DECIDED ON 14TH SEPTEMBER, 1992.
1993 P T D (Trib.) 1116
[Income-tax Appellate Tribunal Pakistan]
Before Ch. Irshad Ahmad, Judicial Member
ITA No. 104/113 of 1992-93, decided on 21/12/1992.
Income Tax Ordinance (XXXI of 1979)---
----Ss.129 & 134---Assessee's right of appeal under S.129 or 134 when arises-- Principles illustrated---Right of appeal does not extend to raising objection to procedural decisions unless any such decision has affected the determination of the right of party aggrieved by the decision of the lower forum---Unless assessee objects to the assessment made by the Income Tax officer, he cannot file an appeal against I.T.O.'s order only on the ground that while making the assessment the I.T.O. did not adopt correct procedure ;---Right of appeal arises only if the decision of the lower forum has adversely affected the party filing appeal.
Hassan Mehdi Rizvi for Appellant.
Mrs. Zareen Saleem Ansari, D.R. for Respondent.
Date of hearing: 14th December, 1992.
ORDER
In the return of income for the assessment year 1990-91 the assessee declared his net income at Rs.28,116. The assessing officer called upon the assessee to furnish necessary documents in support of the declared income but the assessee did not respond to any notice. Accordingly, the Income Tax Officer (ITO) by an ex parte order under section 63 of the Income Tax Ordinance, 1979 (the Ordinance) made the assessment on the assessee at the net income of Rs.42,868 which was computed as below:---
(1)Commission from State Life Insurance Corporation
| As per certificate the assessee received total commission from SLIC at .. | Rs.29,503 |
| Less incidental @ 50% | Rs.14,751 |
| Net commission income | Rs.14,752 |
| (2) Income from salary (as declared) | Rs.28,116 |
| Total net income. | Rs.42,868 |
The assessee objected to ex parte action taken by the assessing officer through an appeal before the Commissioner of Income Tax (Appeals) but his appeal was rejected. Through this further appeal the assessee has objected to the orders of the Tax authorities on the ground that the Income Tax Officer was not justified to pass an ex parte order against the assessee as no notice was served on him. It is pertinent to point out that the assessee does not contest the assessment (i.e. the computation of income and levy of tax) made by the assessing officer.
I have heard Mr. Hassan Mehdi Rizvi, Advocate for the assessee and Mrs. Zareen Saleem Ansari, DR for the Department.
The appeal raises a question of some importance whether an assessee who does not challenge the correctness of the assessment made by the Income Tax Officer can file an appeal against assessment order? To find answer to the above question the most convenient starting point would be to refer to section 129 of the Ordinance under which an assessee objecting to an order by which an ITO has made assessment on him can appeal to the Appellate Assistant Commissioner (AAC) and section 134 of the Ordinance under which an assessee objecting to an order passed by an AAC can appeal to the Income Tax Appellate Tribunal. The above sections so far as material read as below:---
"129.--(1) Appeal to the Appellate Assistant commissioner. --Any assessee objecting to an order made by an Income Tax Officer under section 59 or 59A where any adjustment has been made under subsection (3) or subsection (2), respectively, of those sections 62, 63, 65, 75, 80, 80A, 91, 98, 99, 105 to 112 inclusive, 114 or subsection (21 of section 148, or an order under section 52, treating a person to be an assessee in default or an order under section 78, treating the assessee as an agent of a non-resident, or an order under section 156 refusing to rectify the mistake either in full or in part, as claimed by the assessee or having the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the assessee may appeal to the Appellate Assistant Commissioner against such order.
(2) ..
134.--(1) Appeal to the Appellate Tribunal,--An assessee objecting to an order passed by an' Appellate Assistant Commissioner under section-Ill or 132, or subsection (2) of section 148 or an order made by the Appellate Assistant Commissioner under section 156, or an order made by an Inspecting Assistant Commissioner under section 66A having the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the assesee may appeal to the Appellate Tribunal against such order.
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The cursory reading of the provisions of section 129 of the Ordinance gives an impression that an assessee can appeal to the AAC if he has any objection to the order made by the Income Tax Officer. But the right to object being right of appeal a question arises does that right not imply that the objection to an assessment order made by the Income Tax Officer must relate to the charge or levy of tax and not to any holding which does not effect such charge or levy? And, if there is no charge or levy of tax on the assessee he would have no right of appeal (cases of assessment involving losses that can be sent off or carried forward are excepted from discussion in this case). Can an assessee object to an assessment order made by the Income Tax Officer which is in English on the ground that the order is `not good English'? As stated earlier the plain language of section 129 ibid does not appear to inhibit the assessee from objecting to an order made by the Income Tax Officer even on the above ground. But in approaching the matter in the above manner one will have to ignore the accepted connotation of the right of appeal. Although the expression "appeal" has neither been defined in the Income Tax Ordinance nor in the Code of Civil Procedure but its accepted meanings are "the removal of cause from a lower Court to a higher Court for the purpose of testing the soundness of the decision of the lower Court so far as it determined the rig-fits of parties with regard to all or any of the matters in controversy in the cause. In seeking answer to the question it would be advantageous to take analogy from the provisions of the Code of Civil Procedure relating to right of appeal. ' Section 96 of the Code of Civil Procedure provides that an appeal shall lie from every decree passed by a Court exercising original jurisdiction to the Court authorised to hear an appeal from the decision of such Court. Although section 96 of the Civil Procedure Code like section 129 of the Ordinance does not inhibit the plaintiff whose suit has been decreed in its entirety or the defendant against whom the suit has been dismissed in its entirety to file appeal against the decree if the plaintiff, or as the case may be, the defendant has any objection to the findings of the Court recorded on certain issues, but the judicial authority is firm and established that a plaintiff whose suit has been decreed in its entirety or a defendant against whom the suit has been dismissed in entirety cannot appeal against the decree on the grounds that the Court decreeing the suit or, as case may be, dismissing the suit committed certain procedural illegalities or irregularities. A legal principle has established that right of appeal arises only if the decision of the lower Court has determined the rights of the party with regard to all or any of the matters in controversy in the proceedings and the said determination has adversely effected the party filing the appeal. The right of appeal does not extend to raising objection to procedural decisions unless any procedural decision has effected the determination of the right of the party aggrieved by the decision of the lower Court. Let me illustrate what I have said above. A suit is brought by `A' against B'. When the suit is called for hearing B' does not appear in Court and is proceeded ex parte. But `A's suit is dismissed on the ground that `A' had no right to relief claimed in the suit. B' cannot file appeal against the determination by which `A's suit was dismissed on the ground that the Court was wrong when it proceeded ex parte against him. 1n the proceedings under the Ordinance the real point in controversy between the Income Tax Officer and an assessee is: what is the income of the assessee and what amount of tax is leviable on assessee's income? The words "right of parties with regard to all or any of the matters in controversy in a suit" used in the definition of "decree" as given in the Code of Civil Procedure can, for the purposes of the proceedings under the Ordinance, shall be equated to the provisions of section 129 of the Ordinance which provide for the charge and levy of tax on the yearly income of every person. The rest of the provisions of the Ordinance are codal provisions to determine quantum of the charge and to effect its levy and recovery. It is also an established principle that an appeal which, even if successful, would be entirely fruitless, should be dismissed as incompetent. Similarly, the principle is that appeal would lie only in such cases in which the determination of a lower Court will operate as res judicata in any subsequent litigation between the parties.
In view of the above legal principles, I am of the view that unless an assessee objects to the determination of income made by an ITO he cannot file an appeal against an order made by the ITO making the assessment only on the ground that while making the assessment, the ITO did not adopt correct procedure. No determination of an Income Tax Officer shall operate as an estoppel or res judicata unless the assessee against whom it is sought to be set up as such would have the right to object to that determination. In this case in which the assessee neither objects to the computation of his income nor the amount of tax his appeal before the AAC was incompetent. Similarly, his appeal before this Tribunal in which he neither objects to his liability to the charge nor to the computation of his chargeable income is incompetent. The assessee's appeal is accordingly dismissed.
M.B.A./2350/T Appeal dismissed.