FAIZ MUHAMMAD VS KARAM-ABBAS SHAH
1993 PTD 623
[Lahore High Court]
Before Irshad Hasan Khan and Muhammad Arif, JJ
Messrs CH. MUHAMMAD DIN
versus
COMMISSIONER OF INCOME-TAX, ZONE `B', LAHORE
P.T.R. No. 39 of 1988, decided on 23/02/1993.
(a) Income Tax Ordinance (XXXI of 1979)---
----S.136---Reference---Failure to file certified copy of the order of Income Tax Appellate Tribunal with the reference is of no consequence.
Subsection (1) of section 136 of the Ordinance provides that within ninety days of the date upon which he is served with notice of an order under section 135, he or the Commissioner may, by application in such form and accompanied by such documents as may be prescribed, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order, and the Appellate Tribunal, shall within ninety days of the receipt of such application draw up a statement of the case and refer to it to the High Court. Subsection (1) of section 136 of the Ordinance requires that the application is to be in such form accompanied by such documents as may be prescribed.
The requirement for filing application and documents is the same under subsection (2) as they apply to a reference made under subsection (1) before the Income Tax Appellate Tribunal. In the absence of any specific provisions requiring the applicant to file a certified copy of the documents as contained in section 66(2) of the Income Tax Act, 1922, it cannot be held that failure to file certified copies of the documents has rendered the Reference as not maintainable. Failure to file the certified copy of the order of Income Tax Appellate Tribunal with the Reference application is of no consequence.
Commissioner of Income Tax, Lahore v. Fazal Muhammad (1992) 65 Tax 167 (H.C. Lah.) distinguished.
Commissioner of Income Tax, Rawalpindi Zone, Rawalpindi v. Mian Javid A. Sheikh 1989 PTD 525 and Commissioner of Income Tax and others v. Mst. Surriya Farooq and others 1987 SCMR 1297 held not applicable.
(b) Income-tax Act (XI of 1922)---
----Ss.22(4) & 23(2)---Reassessment proceedings initiated under Ss. 22(4) & 23(2) of the Act---Limitation---Reassessment, held, could be made by the Income Tax Officer at any time in the absence of any period of limitation having been provided under the Act.
Dr. Ilyas Zafar for Petitioner.
Ch. Muhammad Ishaque for Respondent.
Date of hearing: 21st February, 1993.
JUDGMENT
MUHAMMAD ARIF, J.---This judgment shall dispose of T.R. No.39 of 1988.
2. Briefly the facts of the case are that Income Tax Assessment of the petitioner was made in June, 1973. He preferred an appeal which was accepted by the Income Tax Appellate Tribunal on 13-2-1975 and the matter was remanded to the Income Tax Officer for reconsideration in the light of the observations made therein. Re-assessment was made by the Income Tax Officer on 30-6-1985. This was challenged by the applicant before the Appellate Assistant Commissioner but his appeal was dismissed on 31-10 1985. The appeal filed by the applicant before the Income Tax Appellate Tribunal was also rejected on 21-12-1986. Thereafter the applicant filed a reference application before the Income Tax Appellate Tribunal praying for referring the following questions of law to this Court:
"(i) Whether in the facts and circumstances of this case, the learned Income Tax Appellate Tribunal was right in holding provisions relating to re-assessment of set aside assessment pending under Repealed Income Tax Act, 1922 were saved by section 166-A of the Income Tax Ordinance, 1979.
(ii) Whether in the facts and circumstances of this case, reassessment proceedings initiated under section 23(3)/33 of the Income-tax Act, 1922 were illegal having been barred by coming into force of the Income Ordinance, 1979, limiting the period for making assessment of a set aside case.
(iii) Whether in the facts and circumstances of this case., the learned Income Tax Appellate Tribunal erred in law in holding in a procedural matter that the provisions of Repealed Income-tax Act, 1922 were applicable:"
The Income Tax Appellate Tribunal dismissed the application inter alia with the following observations:
"3. All the three questions posed by the applicant do not contain any proposition of law requiring interpretation by the High Court. The applicant having filed return under provisions of the Repealed Income Tax Act, assessment/re-assessment had to be made under sub-clause (a), subsection (2) of section 166 of the I.T. Ordinance, 1979 under the provisions of the Repealed Income Tax Act. It is pertinent to bring on record the relevant provision which runs as under:
Where a return of income has been filed before the commencement of the Ordinance by any person for any assessment year, proceedings for the assessment of that person for that year may be taken and continued as if this Ordinance had not come into force.'
As period for completion of assessment has been prescribed in the I.T. Ordinance, 1979 that provision is applicable in the cases wherein the returns are filed under the Ordinance. In the applicant's case, the return having been filed under the provisions of Act, re-assessment had to be made under the provisions of the Act totally ignoring the period of limitation prescribed for re-assessment in the Ordinance."
2.This application was admitted to a regular hearing on 13-12-1988 to consider the following questions of law:
"(1) Whether in the facts and circumstances of this case the learned Income Tax Appellate Tribunal has erred in law in holding that provisions of the Repealed Income Tax Act continue to be applicable in the matter of limitation?
(2) Whether in the facts and circumstances of this case Circular No.3 of 1962, C. No. 83 (1) S.O. (T)-4/62, dated 20-1-1962 issued by the Central Board of Revenue is directory in nature and that it does not preclude the Income Tax Officer to make re-assessment after the expiry of the period provided therein."
3. Ch. Muhammad Ishaque, learned counsel for the Income Tax Department relying on Commissioner of Income Tax, Lahore v. Fazal Muhammad (1992) 65 Tax 167 (H.C. Lah.) contended that the present application was not maintainable in that the applicant failed to file the certified copy of the order of the Income Tax Appellate Tribunal. The contention is devoid of any force. The precedent case relates to Reference under section 62 of the Income Tax Act (No. XI of 1922) which has been repealed with effect from 1-7-1979. At the relevant time Income Tax Ordinance (NOXXXI of 1979), hereinafter to be referred as the Ordinance, held the field. The question of maintainability of the Reference application is to be decided in the light of the provisions of section 136 of the Ordinance. Subsection (1) of section 136 of the Ordinance provides that within ninety days of the date upon which he is served with notice of an order under section 135, he or the Commissioner may, by application in such form and accompanied by such documents as may be prescribed, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order, and the Appellate Tribunal, shall within ninety days of the receipt of such application draw up a statement of the tease and refer it to the High Court. Subsection (1) of section 136 of the Ordinance requires that the application is to be in such form accompanied by such documents as may be prescribed. Ch. Muhammad Ishaque, learned counsel for the Income Tax Department, has been unable to show that any form or other requirement has been prescribed for filing certified copy for the purpose of filing Reference under this provision. Here the Income Tax Appellate Tribunal refused to make the reference on the ground stated in his order and, therefore, the applicant filed an application under subsection (2) of section 136 of the Ordinance. The requirement for filing application and documents is the same under this subsection as they apply to a reference made under subsection (1) before the Income Tax Appellate Tribunal. In the absence of any specific provisions requiring the applicant to file a certified copy of the documents as contained in section 66(2) of the Income Tax Act, 1922, it cannot be held that failure to file certified copies of the documents has rendered the Reference as not maintainable. Thus visualized failure to file the certified copy of the order of Income Tax Appellate Tribunal with the Reference application is of no consequence. The ratio laid down in the cases of Commissioner of Income Tax, Rawalpindi Zone, Rawalpindi v. Mian Javid A. Sheikh 1989 PTD 525 and the Commissioner of Income Tax and others v. Mst. Surriya Farooq and others 1987 SCMR 1297 are not applicable to References under section 136 of the Ordinance.
4. As regards questions Nos. 1 and 2, Dr. Ilyas Zafar, the learned counsel (or the applicant has argued that in view of Circular No.3 of 1962, C. No. 83(1) S.().(T)-.1; b-,, dated 2,0-1-192 issued by the Central Board of Revenue directing that all assessments stated in appeal should be disposed of within six months from the date of the appellate order has since not been followed in letter and spirit in the instant case, therefore, the reassessment made on 30-6-1985 by the Income Tax Officer in pursuance of the order of the Income Tax Appellate Tribunal dated 13-2-1975 was not justified. In the absence of any specific period having been prescribed either in the Act of 1922 or even in the remand order of the Income Tax Appellate Tribunal, dated 13-2-1975, it was open to Income Tax Officer to proceed with the reassessment, as directed by the former. Here, the Income Tax Officer initiated proceedings for re -assessment under sections 22(4) and 23(2) of the Act to which no exception can be taken. The Tribunal was, therefore, right in holding that the re -assessment could be made by the Income Tax Officer at any time in the absence of any period of limitation having been provided under the Repealed Act.
5. For the foregoing reasons we are of the opinion that questions reproduced above do not strictly arise out of the Tribunal's order. The Reference is, therefore, answered as above with no order as to-costs.
M.BA./M-889/L Reference answered.