VS, 1994 PTD-LAHORE-HIGH-COURT-LAHORE 949 (1993)

Income Tax Ordinance (XXXI of 1979)---

----S. 136---Income-tax Act (XI of 1922), S.4(2D)---Reference---Finding of fact

recorded by Income Tax Appellate Tribunal is binding in proceedings under S.136 of the Ordinance.

Ch. Muhammad Sarwar for Applicant.

Kh. Muhammad Sharif for Respondent.

Date of hearing: 24th April 1993.

JUDGMENT

M. MAHBOOB AHMAD, C.J. ---This judgment shall dispose of Tax Reference No.36 of 1986, P.T.R: No.37/86 and P.T.R. No.30/88, which arise under similar circumstances and pertain to a similar controversy. The respondents in all these eases inter alia had income from the same immovable property in different shares. The Income Tax Officer after proposing assessment sent a draft of the order to the Inspecting Assistant Commissioner, Lahore. It appears that he had sent the case back to the Income Tax Officer who vide his order, dated 6-3-1980 made certain additions under section 4(2D) of the Income Tax Act, 1922. Aggrieved by the order of the Income Tax Officer, the respondents went in appeals, which were accepted by the Appellate Commissioner of Income Tax on 6-5-1980 who took the view that the additions under section 4(2D) could only be made by the Income Tax Officer and not the Inspecting Assistant Commissioner of Income Tax. He consequently directed that the additions made in pursuance to the direction of the Inspecting Assistant Commissioner be deleted. Aggrieved of this order, the Department filed an appeal before the learned Income Tax Appellate Tribunal. This appeal was dismissed by the learned Tribunal on 1-7-1985. The learned Income Tax Appellate Tribunal also rejected the application made by the Department under section 136(1) of the Income Tax Ordinance, 1979 for making reference of all the questions to, this Court vide its order, dated 16-7-1986. The Department therefore came up to this Court under section136(2) of the Income Tax Ordinance, 1979 for answer to the following questions:---

Q.No.1.--Whether on the facts and in the circumstances of the case the Tribunal was justified in upholding that any proposal of malting addition under section 4(2D) of the Repealed Act has to be originated from the assessing officer and not from the Inspecting Assistant Commissioner?

Q.No.2.--Whether on the facts and in the circumstances of the case and in the context of No.l above the Tribunal was justified to observe that instructions deemed fit for the guidance of Income Tax Officer subordinate to the Inspecting Assistant Commissioner, in a matter of any proceeding under the Repealed Act, cannot be issued by the Inspecting Assistant Commissioner even though he is specifically empowered by section 7B of the Repealed Act?

Q.No.3.--Whether in the absence of any prescribed language the Tribunal was justified to uphold that statutory approval granted by the Inspecting Assistant Commissioner for making addition under section 4(2D) of the Repealed Act was not valid?

Q.No.4.--Whether on the facts and in the circumstances of the case the Tribunal was justified in upholding that addition under section 4(2D) without affording reasonable opportunity of hearing to the assessee has to be deleted instead of setting aside the matter on this issue?

2. We have heard the learned counsel for the parties at length and perused the record. The learned counsel for the petitioner has argued that Inspecting Assistant Commissioner is not the Income Tax Officer but under section 7(2) of the Income Tax Ordinance, 1979, he is competent to impart instructions for the guidance of the Income Tax Officer who is bound by the same and in this case, the additions were made by the Income Tax Officer pursuant to the direction of the Inspecting Assistant Commissioner but the same have been directed to be deleted by the Appellate Commissioner of Income Tax.

3. On examination of the order of the Income Tax Appellate Tribunal, we find that a finding of fact has been recorded by the said Tribunal to the effect that Inspecting Assistant Commissioner's letter only contains suggestion for making addition by adopting cost of construction @75 per sq. ft. The sentence inserted by hand in the typed letter is neither in the handwriting of the Inspecting Assistant Commissioner nor contains initials of the person who had added the same. Use of different ink in that sentence supports our conclusion that the same was inserted later on as is obvious from the above. The Income Tax Appellate Tribunal has found for valid reasons that the original letter did not contain any approval or direction by the Inspecting Assistant Commissioner and the relevant words were subsequently interpolated. It needs no gainsaying that a finding of fact recorded by the learned Income Tax Tribunal is binding in proceedings under section 139 of the Income Tax Ordinance, 1979 and 136 of the Ordinance. That being so, the questions posed in this application do not arise as questions of law and need not be answered by this Court. We accordingly dismiss this application with no order as to costs.

M.BA./C-41/LApplication dismissed.