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

----Ss. 134(3), 135 & 136---Appeal before Appellate Tribunal ---Limitation--- Starting point---Reference to High Court---Tribunal computing period of limitation from date of service of the appellate order on I.T.O. rejected appeal filed by the Department as barred by time---Department contending that time should have been counted from the date of service of order in the office of Commissioner, filed application under S. 136(1), before Appellate Tribunal to refer the question of limitation to High Court for its answer---On Tribunal's refusal to refer the question, Department filed application under S.136(2) before High Court---Held, question of law did arise out of the order of Tribunal dismissing appeal as barred by time---Such dismissal was an order passed in appeal and thus fell within the ambit of S.135 of the Ordinance for which S.136 provides for filing a reference requiring the Tribunal to refer to High Court any question arising out of such order---Appellate Tribunal was accordingly directed to state facts and refer the question formulated in the application to High Court for its answer.

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

----S. 134---Appeal---Connotation---Time-barred appeal---Appeal presented out of time is an appeal and an order dismissing same as time-barred is one passed in appeal---If an appeal is not presented within the prescribed time it does not cease to be an appeal within the meaning of S.134(1).

AIR 1932 PC 165 = (1932) LR 59 IA 283; 1954 SCR 384, 388 = AIR 1955 SC 73 and AIR 1921 Cal. 415 ref.

Nasrullah Awan for Applicant.

Sirajul Haq for Respondent.

Date of hearing: 24th February, 1992 .

JUDGMENT

SYED HAIDER ALI PIRZADA, J.---This is an application by the Commissioner of Income Tax, Central Zone, Karachi, under section 136(2) of the Income Tax Ordinance, 1979 (which will hereafter be referred to as `the Ordinance'), requiring the Income Tax Appellate Tribunal to state a case and refer the following question of law for the decision of this Court: --

"Whether under the facts and circumstances this I.TA.T. was justified in holding the appeal barred by limitation or not."

The relevant facts giving rise to the reference are these--The assessee is a private limited Company engaged in construction business. It filed its return of income for the assessment year 1981-82. It declared a loss of Rs.183,219 which was assessed at loss of Rs.6,445. The Income Tax Officer determined deemed income under section 12(7) and charged on Rs.620,000 which amounted to Rs.74,400. Aggrieved by the decision of the Income Tax Officer, the assessee filed appeal before the Commissioner of Income Tax (Appeals) who deleted the addition under section 12(7) on Rs.600,000 and directed to charge deemed interest on an advance of Rs.20,000 only. The revenue was not satisfied with the order of the CIT (Appeals) and therefore it made an appeal before the Income Tax Appellate Tribunal. The appeal was dismissed by an order dated 14-10-1986. While dismissing the appeal, the learned Tribunal considered period of limitation from the date of receipt of appellate order in office of the Income Tax Officer. The case of the applicant, as set out in the application, is that the period of limitation of sixty days as provided in section 134(3) of the Ordinance, commences from the date when the appellate order is received in the CIT's office. In the instant case, the appellate order was received in CIT's office on 9-10-1983 and the appeal before the Tribunal was filed on 19-11-1983 which was within time. The learned Tribunal erred in treating the appeal barred by time. The applicant was not satisfied with the order of the Tribunal and, therefore, he made an application before the Tribunal for referring the aforesaid question of law of this Court but the Tribunal by its order dated 12-5-1987 rejected the application. Hence this present application under section 136(2) of the Ordinance.

We have heard Mr. Nasrullah Awan, learned counsel for the applicant and Mr. Sirajul Haque, learned counsel appearing for the assessee.

Section 134 of the Ordinance confers on the assessee a right of appeal against certain orders. Subsection (2) of section 134 confers on the Commissioner of Income Tax a right of appeal against certain orders. Then, we come to section 134(3) which exacts a period of limitation within which this right has to be exercised.

If an appeal is not presented within that time, does that cease to be an appeal as provided under section 134(I)? It is well established that rules of limitation pertain to the domain of adjective law and that they operate only to bar the remedy but not to extinguish the right. An appeal preferred in accordance with section 134(1) must, therefore, be an appeal in the eye of law, though having been presented beyond the period mentioned in section 134(3), it is liable to be dismissed in limine. There might be a provision in the statute that at the end of the period of limitation prescribed, the right would be extinguished, as for example, section 28 of the Limitation Act but there is none such here.

In Nagendra Nath Dey and another v. Suresh Chandra Dey and others AIR 1932 PC 165 -- (1932) L.R. 59 IA. 283), Sir Dinshaw Mulla construing the word "appeal" in the third column of Article 182 of the Limitation Act, observed:

'There is no definition of appeal in the Civil Procedure Code, but their Lordships have no doubt that any application by a party to an appellate Court, asking it to set aside or revise a decision of a subordinate Court, is an appeal within the ordinary acceptation of the term, and that it is a less an appeal because it is irregular or incompetent."

These observations were referre2 to with approval and adopted by the Supreme Court of India in Raja Kulkarni and others v. The State of Bombay (1954 SCR 384 - 388, = AIR 1955 SC 73 at 74. In Promotho Nath Roy v. WA. Lee AIR 1921 Calcutta 415 an order dismissing an application as barred by limitation after rejecting an application under section 5 of the Limitation Act to excuse the delay in presentation was held to be one "passed of appeal" within the meaning of section 109, C.P.C. On the principles laid down in these decisions, it must be held that an appeal presented out of time is an appeal, and an order dismissing it as time-barred is one passed in appeal.

The next question is whether it is an order passed under section 135 of the Ordinance. That section is the only provision relating to hearing and disposal of appeals, and if an order dismissing an appeal as barred by limitation is one passed in appeal, it must fall within section 135. And section 136 provides for filing a reference requiring the Appellate Tribunal to refer to the High Court any question arising out of such order. In our opinion, therefore, a question of law does arise out of the order of the Tribunal and we, therefore, direct the Tribunal to state the facts and refer the above question of law set above for answer by this Court.

M.BA./C-284/K Order accordingly