M.A. NO. 211/LB OF 1991-92, DECIDED ON 2ND DECEMBER, 1992. VS M.A. NO. 211/LB OF 1991-92, DECIDED ON 2ND DECEMBER, 1992., 1993 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 964 (1992)

(a) Income Tax Appellate Tribunal Rules, 1981---

----R. 13---Where a fact which cannot be borne out by or is contrary to the record is alleged it has to be stated clearly and concisely by duly sworn affidavit---In absence of any such affidavit Tribunal will not permit the applicant to state anything which is not available on record.

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

----S. 156---Rectification of mistake---Power vested in Income Tax Appellate Tribunal under S.156 only extends to a mistake which is apparent from the record---Where not a single infirmity or mistake had been pointed out by the applicant, Tribunal could not accede to the request for rectification.

Alwaye v. Asok Textiles Ltd. 41 ITR 732; Sidhramapa Andannapa Manvi v. CIT, Bombay 21 ITR 333; Blue Star Engineering Co. Ltd. v. CIT, Bombay 73 ITR 283; 1980 PTD (Trib.) 74; 1986 PTD 100; 1983 PTD 246; 1986 PTD 100 and PLD 1987 Lab. 280; PLD 1987 Lab. 555 and PLD 1987 SC (AJK) 118 distinguished.

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

----S. 156---Essential conditions for exercise of powers under S.156---Power of rectification of mistake under S.156 cannot be extended or stretched to authorise Income Tax Authority/Tribunal to sit in judgment as an Appellate Court against its own order and reverse the same by finding faults in it or by taking additional grounds to come to a conclusion in favour of the applicant-- "Mistake" and "finding" are not only two different words but also connote two absolutely different situations.

Section 156 of the Income Tax Ordinance confers a power to rectify any mistake in the order which is apparent from the record. Such power can be exercised suo motu or if it is brought to the notice by an assessee. Therefore, essential condition for exercise of such power is that the mistake should be apparent on the face of record; mistake which may be seen floating on the surface and does not require investigation or further evidence. The mistake should be so obvious that on mere reading the order it may immediately strike on the face of it. Where an officer exercising power of rectification under the section enters into the controversy, investigates into the matter, reassesses the evidence or takes into consideration additional evidence and on the basis thereof interprets the provision of law and forms an opinion different from the order, then it will not amount to "rectification" of the order. Any mistake which is not patent and obvious on the record, cannot be termed to be an order which can be corrected by exercising power under the section.

The power of rectification of mistakes under the erstwhile Income Tax Act, 1922 and now under section 156 of the Income Tax Ordinance, 1979 cannot be extended or allowed to be stretched to authorise an Income Tax Authority or Tribunal to sit in judgment as an Appellate Court against its own order and reverse the same by finding faults in it or by taking additional grounds to come to a conclusion in favour of the applicant. There can be no end to litigation and no Court or Tribunal can ever claim a complete disposal of a suit, application, appeal or a lis in any other form if it keeps on changing its order by letting similar applications or objections to creep in against the order passed by it. A finding and a mistake are not only two different words but also connote two absolutely different situations. And, a "mistake apparent from record" implies yet another situation.

Commissioner of Income Tax, Companies-2, Karachi v. National Food Laboratories (1992) 65 Tax 257; Sheikh Muhammad Iftikharul Haq v. Income Tax Officer, Bahawalpur PLD 1966 SC 524 and Pakistan River Steamer Limited v. Commissioner of Income Tax 1971 PTD 204 ref.

Dr. Ilyas Zafar for Applicant.

F.D. Qaiser, D.R. for Respondent.

Date of hearing: 30th November, 1992.

ORDER

NASIM SIKANDAR (JUDICIAL MEMBER): --By way of this miscellaneous application in ITA No.743/LB/1/1990-91 (assessment year 1988-89) decided on 29-2-1992 the applicant seeks "recalling of the order and rectification of mistakes".

2. The facts leading to this application are that the applicant, a registered firm, deriving income from sizing plant was assessed at a total income of Rs.233,000 for the assessment year 1988-89. This included an addition under section 13(1)(c) of the Ordinance on account of purchase of a generator which was not disclosed. The contention of the assessee that he was not owner of the generator was rejected by the assessing officer as well as by the first appellate authority by way of his order dated 14-1-1991. This order was impugned before this Tribunal and we agreed with the findings of both the authorities below in making of the aforesaid addition at Rs.150,000. Now the assessee-applicant, vide paras. 2 and 3 of this application submits that on receipt of the order of this Tribunal some important points were noticed to have escaped the attention of this Tribunal. These alleged important points included that the Inspector's report relied upon by the assessing officer was vague; the Inspector was not competent to record statement of any of the partners; copies of lease agreement and affidavits of the lessee of the factory and the real owner of the generator were submitted before this Tribunal which were ignored, and that the alternate plea regarding valuation of the generator could be taken before the Tribunal even now. In the last sub-para. of the application the assessee-applicant has also raised some legal objections to the vires of the notice served by the assessing officer and subsequently the assessment framed by him.

3. We have heard the parties. At the very outset we would like to point out that the learned counsel for the' applicant did not refer to any part or sentence of the order of this Tribunal in the perspective of his application for rectification of alleged mistakes. The fact of the matter is that he was fully conscious that he was basically seeking a reversal of the order on the basis that some of his contentions were allegedly not considered by this Tribunal while deciding his appeal. In this attempt he tried to make out a case that he was approaching this Tribunal for rectification of mistakes under section 156 of the Ordinance and not under Order 47, Rule 1 of the Civil Procedure Code which pertains to the review of judgments. And, in support of his contention he placed reliance upon a number of reported cases of local as well as foreign jurisdiction. The contention that he was not seeking review but only rectification of alleged mistake is fallacious and incorrect. The very words of paras. 2 and 3 of his application make it abundantly clear that he would like us to review our order and reverse the same by taking into consideration certain additional facts which statedly were net taken into consideration although these were allegedly argued at the tune of hearing of the appeal.

4. The applicant is agitating something which is not apparent from the record in this case. His contention that certain points were duly raised but were ignored by this Court in the first instance has not been supported by an affidavit as contemplated under Rule 13 of the Rules of this Tribunal. According to this Rule where a fact which cannot be borne out by or is contrary to the record is alleged it shall

be stated clearly and concisely by a duly sworn affidavit. In absence of any such affidavit we will not permit him to state anything which is not available on record. The contention regarding alternate plea is also misconceived as no such plea was either stated in the grounds of appeal nor otherwise raised before this Tribunal at the time of hearing of the appeal. The alleged important points as stated in sub-paras. (a) to (f) of para 3 of the application are in tact arguments which the applicant would like us to consider now. This cannot be done under any provision of law much less to say about section 156 of the Ordinance which relates only to rectification of mistakes apparent from record From these alleged important points the assesses-applicant in fact would like us to believe that the aforesaid order passed in appeal was mistaken as a whole and, therefore, ought to be revised by taking into consideration some grounds either as additional arguments or as he has tried to put them, those which were duly argued at the time of appeal but were ignored. A bare reading of section 156 of the Ordinance relating to rectification of `mistakes makes it abundantly clear that the power vested in this Tribunal only extends to a mistake which is apparent from the record. As pointed out above not a single infirmity or mistake has been pointed out by the applicant in the order which it seeks to be rectified.

5. The precedents of the Superior Courts cited in this regard are not at all relevant to the point in issue in this application. In 41 ITR 732 re: ITO Alwaye v. Asok Textiles Ltd. it was held that an ITO had power under section 35 of the Act to examine the record and if he discovered that he had made a mistake he could rectify the error and that the error which could be rectified might be an error of fact or law. It was further held that restrictive operation of the powers of review under Order. 47, Rule 1 of the Civil Procedure Code was not applicable in the case of section 35 of the Income Tax Act, 1922. In this case the assessee was liable to payment of additional Income Tax and this fact was overlooked by the ITO, who after giving a notice under section 35 of the Act, rectified his error and imposed additional tax at the rate prescribed by law. The revision of the assessee before the Commissioner of Income Tax against such rectification was rejected. And, upon a Constitutional petition before the High Court of Kerala it was held that the order of the ITO was without jurisdiction as section 35 of the Act did not apply. By wax of the aforesaid judgment the Supreme Court of India vacated the order of the High Court. The facts of this case are entirely different and the main reason that weighed with the learned Judges of the Supreme Court of India while quashing the order of the High Court was either disapproval of the opinion of the High Court in equating the language and scope of section 35 of the Act with that of Order XLVII, Rule' l of the Civil Procedure Code. The next case relied upon by the learned counsel for the applicant is 21 I'FR 333. In this case re: Sidhramapa Andannapa Manvi v. CIT Bombay, on the contentions of the appellant, inter alia, it was decided that in asking the Tribunal to come to a different conclusion on a consideration of the alleged fact the assessee was really asking the Tribunal to revise or review its own decision and not to rectify an apparent error on the face of the record. It was, therefore, held by the learned Judges of the Bombay High Court that the Tribunal was right in refusing to rectify its order at the instance of the, assessee. In 73 ITR 283 re: Blue Star Engineering Co. Ltd. v. CIT Bombay a Division Bench of the Bombay High Court, inter alia, held that under section 154 of the Indian Income Tax Act, 1961 the power to rectify the error extended to the elimination of the error even though the error might be such as to go to the root of the order and its elimination may result in the whole order falling to the ground. In this case the assessee applied to the ITO for rectification of error apparent on the face of the record on the ground that the assessment framed by him had been declared to be barred by limitation by the High Court of Bombay. The ITO rejected the application. The appellate Tribunal upheld the contention of the assessee and directed the ITO to rectify the order accordingly. On a reference to the High Court it was contended by the department that it was not within the power of the ITO to rectify the order by cancelling the order of assessment itself under section 154 of the Indian Income Tax Act. 1961. As slated above it was held by the learned Division Bench of the High Court that it was competent for the ITO to rectify the order under section 154 as the order of assessment for the relevant order was admittedly invalid and without jurisdiction. The facts of this case are also not relevant to the preposition before us.

6. The learned counsel has also relied upon 1980 PTD (Trib.) 74 and 1986 PTD 100 to support his contention that this Tribunal could recall the original order if the appeal was decided without considering material facts on record. Also, he referred to 1983 PTD 246 to contend that the power under section 35 of the Income Tax Act was much wider in scope than the powers available to a Civil Court under Order XLVII, rule 1 of C.P.C. Again to lend support to his submissions that this Tribunal is competent to look at evidence to ascertain if a mistake had been committed he referred to 1986 PTD 100 and requested for reconsideration of the alleged material that he relied upon before this Tribunal. Then, assuming that all of his contentions were not considered by this Tribunal, he placed reliance on PLD 1987 Lah. 280 and 555 and PLD 1987 SC (AJK) 118 to stress that all contentions urged before a Court or Tribunal should be specifically mentioned and ruled upon in the judgment.

7. The dictums and legal prepositions as finally settled byway of the abovesaid authorities hardly have any relevance to the matter in issue before us. The reason simply being that the applicant wants us to revise our order on the basis of certain contentions which allegedly were not ruled upon and considered while disposing of his appeal. The applicant has presupposed one thing and then built up a myraid of assumptions which are even more presumptive. As stated earlier, neither the application nor the learned counsel for the applicant refers to any mistake in the order passed by this Tribunal. None of the aforecited cases lends him any support so far as his prayer before us is concerned. The power of rectification of mistakes under the erstwhile Income Tax Act, 1922 and now under section 156 of the Income Tax Ordinance, 1979 has never been extended or allowed to be stretched by any Superior Court either in Pakistan or India to authorise an Income Tax Authority or this Tribunal to sit in judgment as an Appellate Court against its own order and reverse the same by finding faults in it or by taking additional grounds to come to a conclusion in favour of the applicant. There can be no end to litigation and no Court or Tribunal can ever claim a complete disposal of a suit, application, appeal or a lis in any other form if it keeps on changing its order by letting similar applications or objections to creep in against the order passed by it. A finding and a mistake are not only two different words but also connote two absolutely different situations. And, a "mistake apparent I from record" implies yet another situation.

8. The Supreme Court of Pakistan in a case recently decided and reported as (1992) 65 Tax 257 re: Commissioner of Income Tax Companies-2, Karachi v. National Food Laboratories, authoritatively ruled upon the scope of section 35 of the repealed Income Tax Act, 1922 which is equivalent to section 156 of the Ordinance. In this case a Division Bench of the Supreme Court refused to grant leave to the Department and upheld the order of the High Court by rejecting the contentions that the assessing officer could rectify the original assessment order passed by his predecessors by taking the view that `Masalajat' (spices) could not be termed as food and, therefore, entitled to rebate in super tax as was held earlier by his predecessor in the original assessment order. The relevant portion of this judgment is reproduced to highlight the view of the Supreme Court of Pakistan with regard to the powers available to an Income Tax Authority (or this Tribunal) for rectification of mistakes under section 35 of the repealed Act, 1922 (which is equivalent to section 156 of the Income Tax Ordinance, 1979).

"Section 35 of the repealed Income Tax Act, 1922 hereinafter referred to as `The Act' confers a power to rectify and mistake in the order which is apparent from the record. Such power can be exercised suo motu or if it is brought to the notice by an assessee. Therefore, essential condition for exercise of such power is that the mistake should be apparent on the face of record; mistake which may be seen floating on the surface and does not require investigation or further evidence. The mistake should be so obvious that on mere reading the order it may immediately strike on the face of it. Where an officer exercising rower under section 35 enters into the controversy investigates into the matter reassesses the evidence or 'takes into consideration additional evidence and on that basis interprets the provision of law and forms an opinion different from the order, then it will not amount to `rectification' of the order. Any mistake which is not patent and obvious on the record, cannot be termed to be an order which can be corrected by exercising power under section 35. In this regard reference can be made to Sheikh Muhammad Iftikharul Haq v. Income Tax Officer, Bahawalpur, PLD 1966 SC 524 and Pakistan River Steamer Limited v. Commissioner of Income Tax 1971 PTD 204.

9. In view of what has been stated above we find this application to be necessarily for review of the order and not for rectification of mistakes as none has been pointed but in the order passed by this Tribunal. The scope and significance of rectification of mistakes as contemplated in section 156 of the Ordinance being altogether different and not attracted in this case we will dismiss this application.

M.B.A./2290/T Application dismissed.