I.TAS. NOS. 452/LB OF 1993 AND 1128/LB OF 1994, DECIDED ON 10TH OCTOBER, 1994. VS I.TAS. NOS. 452/LB OF 1993 AND 1128/LB OF 1994, DECIDED ON 10TH OCTOBER, 1994.
1995 P T D (Trib.) 1053
[Income-tax Appellate Tribunal Pakistan]
Before Nasim Sikandar, Judicial Member and Khalid Mahmood, Accountant Member
I.TAs. Nos. 452/LB of 1993 and 1128/LB of 1994, decided on 10/10/1994.
(a) Income Tax Ordinance (XXXI of 1979)---
----Ss.134 (4) & 130(3)---Limitation Act (IX of 1908), S.5---Appeal to Appellate Tribunal ---Limitation---Condonation of delay---Power to condone delay conferred upon Income Tax Appellate Tribunal under S.134 (4) of Income Tax Ordinance, 1979 as also the First Appellate Authority viz. Commissioner of Income tax (Appeals) and Appellate Assistant Commissioner under S.130 (3) of the Income Tax Ordinance, 1979 is wider than the power contained in S.5, Limitation Act, 1908---Reasons stated.
The power to condone delay conferred upon Income Tax Appellate Tribunal under section 134(4) of the Ordinance (as also the First Appellate Authority under section 130(3), is wider than the one contained in section 5 of the Limitation Act, 1908. One reason for this can be stated to be the in application of the notion of accrual of valuable right to an adversary after the lapse of limitation in ordinary cases of civil nature. In Revenue matters, undoubtedly since it is always the State against a citizen or assessee, the interest of immediate recovery cannot be described as accrual of valuable right. Even otherwise the kind of right coming into being by reason of default of a party to approach a particular forum within a specified time is not an absolute right nor does it frustrate exercise of judicial discretion wherever a condonation is provided for in a statute. Tax in whatever form is an exaction for money from the subject. Its recovery or payment when it has become due does contain an element of public interest. However, such interest cannot be equated with the accrual of a valuable right which an individual may normally acquire against another.
The second reason for a liberal interpretation of section 134(4) is the distinctive nature of the proceedings under the Ordinance. In matters of civil nature primary purpose behind prescribing limitation for an action is to bring the proceedings to an end and to clothe them with finality so that people may feel secure in rights to their person and property when the prescribed limitation has run out. In revenue matters on the other hand, a demand once created is not subject to a fixed period nor would it lapse if not recovered in a certain period. A demand when created is a Sword of Damocles hanging on the head of an assessee till the liability is discharged. This advantage being available with the revenue in spite of its being an equal party before this Tribunal, it becomes all the more necessary that limitation prescribed under the statute and the discretion given in condoning the delay is liberally exercised. It should not, however, be understood to mean a permission amounting to licence in excusing delays as a matter of course. In case of every such request, it is the facts and circumstances of each case which should be considered for exercise of discretion. A request for condonation, be it from the assessee or the revenue, if it is contumacious and frivolous, though for one day, may not be accorded acceptance. For, exercise of discretion in favour of an indolent appellant would at least be allowing an undue advantage to the appellant. A Court may refuse to extend time even if there be sufficient cause for delay.
The third reason for lenient view of the delay is also peculiar to the income-tax proceedings when juxtaposed with those before civil or criminal Courts or the Tribunal of special jurisdiction. This lies in the representation on behalf of an assessee. Whereas generally in all proceedings before various Courts or Tribunals lawyers or advocates represent the parties, in income-tax proceedings, besides lawyers and advocates who are specially trained and instructed in law, other persons listed in section 157 of the Ordinance read with Rule 16 of the Income Tax Appellate Tribunal Rules, are also authorised to appear. The list includes any person authorised in writing by the assessee who may be a relation, an employee of the assessee, any official of a scheduled bank with which the assessee maintains a current account or has other regular dealings, an accountant or Income Tax Practitioner. The last mentioned two usually represent assessees more frequently viz. an Accountant and an Income Tax Practitioner. In the aforesaid section, there are stated three categories of Accountants who can appear and plead before this Tribunal or other Income Tax Authorities. An I.T.P. is a person who is registered as such with the C.B.R. His educational and accountancy -qualifications are prescribed by the C.B.R. Except for advocates and lawyers, none from the above list is particularly trained and instructed at law. Their expertise s are usually confined to the study of income tax a "special law" as opposed to the term and significance known in jurisprudence as "jus". Therefore, in cases of pure legal technicalities or intricacies it would not be realistic to expect of them the same degree of legal acumen as those who have had the facility or exposure to the study and practice of- law proper. Accountants and Income Tax Practitioners with accountancy background have an edge on accounting side. This is natural. These Authorised representatives, as said above, however, are to some extent handicapped in matters of complicated legal issues. The true extent and exact parameters of rectification under section 156 of the Ordinance in the case can be cited as an example.
Controller Land Acquisition v. Mst. Katiji and others (1987) 56 Tax 130 SC (India); Abdul Waheed v. State PLD 1960 (W.P.) Lah. 85; PLD 1952 BJ 8; Shib Dayal and another v. Jagannath Prasad 636 All. 44 and Faiz Ali Shah v. Chief Administrator, Auqaf PLD 1974 SC 17 ref.
CIT, Madhya Praddsh v. Kamla Oil Mills, Khargone (1975) 31 Tax 164 distinguished.
(b) Income Tax Ordinance (XXXI of 1979)---
----Ss.131 & 130---Appeal---Limitation---Delay in filing of appeal---Mere issuance of notice for hearing under S.131 (1) of the Income Tax Ordinance, 1979 cannot and does not amount to deemed condonation of delay in filing appeal.
PLD 1964 SC 236 ref.
(c) Income Tax Ordinance (XXXI of 1979)---
----Ss.130 & 131---Appeal---"Filing of'---Handing over of appeal to Postal Authorities is not "filing of an appeal---No official or private agency can be treated as an agent of the Appe118te Authority unless specifically so designated or authorised.
(d) Income Tax Ordinance (XXXI of 1979)---
-----S. 156---Rectification of mistake, application for ---Disposal-- Adjudication----Application under S.156, Income Tax Ordinance, 1979 before the First Appellate Authority is a lis which can be disposed of only by recording a judicial order like those recorded on appeals---Rejection of application under S.156, Income Tax Ordinance, 1979 through a letter addressed to the assessee, held, was improper.
Ataullah Malik v. The Custodian, Evacuee Property, West Pakistan and Karachi etc. PLD 1964 SC 236 ref.
(e) Income Tax Ordinance (XXXI of 1979)---
----S.130(3)---Appeal---Delay in filing of---Application for condonation of delay---Application under S.130(3), Income Tax Ordinance, 1979 before the First Appellate Authority is a lis which can be disposed of only by recording a judicial order like those recorded on appeals---Recording of condonation of delay or otherwise in the hands of the Appellate Authority on the face of second application was illegal for there had to be a finding of sufficient or insufficient cause as the case might be.
(f) Income Tax Ordinance (XXXI of 1979)---
----S.130(3)---Appeal---Limitation---Time-barred appeal---Appellate Assistant Commissioner cannot disturb the order passed by his predecessor admitting a time-barred appeal.
(1976) 103 ITR 759 ref.
(g) Income Tax Ordinance (XXXI of 1979)---
----S.130 (3)---Appeal---Limitation---Time-barred appeal---Application for condonation of delay---Held, to condone delay on an application is a judicial order and, therefore, has to be supported by proper reasons recorded separately and conveyed to the assessee in the same manner as other orders on appeal are conveyed--Reasons and record are two hallmarks of all judicial and quasi-judicial proceedings---Order not supported by reasons is just like an oral order which no judicial authority could ever pronounce.
Mollah Ejhar Ali v. Government of Pakistan PLD 1970 SC 173; Brig. Mazharul Haq and others v. M.C.B, Islamabad PLD 1993 Lab. 706; 1980 PTD (Trib.) 55; 1993 PTD 771 and 1994 PTD 1144 ref.
(h) Income Tax Ordinance (XXXI of 1979)---
----S.130 (3)---Appeal---Limitation---Time-barred appeal ---Condonation of delay---When no appeal was pending, question of condonation of delay would not arise ---Condonation of delay after passing the dismissal order of appeal, therefore, was not permissible, for after dismissing the appeal Appellate Authority became functus officio so far as the question of limitation (or its condonation) was concerned.
(i) Income Tax Ordinance (XXXI of 1979)---
----S.130 (3)---Appeal---Limitation---Time-barred appeal ---Condonation of delay--Sufficient cause---Held, to condone or not to condone delay hinges upon the consideration of sufficient cause which in turn depends upon the facts and circumstances of each case and all the cases have to be decided keeping in view all the attending circumstances.
The State v. Ghulam Shah PLD 1959 (W.P.) Lab. 8; 636 All 44 and PLD 1990 Lab. 302 ref.
(j) Income Tax Ordinance (XXXI of 1979)---
----S.130(3)---Limitation Act (IX of 1908), S.14---Appeal---Limitation---Time barred appeal ---Condonation of delay---"Sufficient cause"---Held, although there was no provision in the Income Tax Ordinance, 1979 equivalent to S.14, Limitation Act, 1908 which provided for exclusion of the time of proceedings bona fide in Court without jurisdiction, yet in absence of negligence, inaction or want of bona fides imputable to a party, word "sufficient cause" must receive a liberal construction so as to advance the cause of substantial justice.
The State v. Ghulam Shah PLD 1959 (W.P.) Lab. 8; 636 All 44 and PLD 1990 Lab. 302 ref.
(k) Income Tax Ordinance (XXXI of 1979)---
-----S.134 (4)---Appeal to Appellate Tribunal---Time-barred appeal-- Application for condonation of delay---Appellant, in good faith had acted upon the advice of his counsel by going for rectification application twice instead of filing an appeal---Appellant diligently continued agitating the matter though in wrong forum and proceedings---Appellate Authority did not act in accordance with law while dealing with such applications---Revenue was also not likely to be prejudiced in any manner if the request for condonation was allowed---No mala fides or negligence could be attributed to the appellant---Request for condonation of delay appeared to be neither contumacious nor frivolous-- Income Tax Appellate Tribunal considering the case a fit one for exercise of its discretion under S.134(4), Income Tax Ordinance, 1979 condoned the delay in filing the appeal.
(1) Income Tax Ordinance (XXXI of 1979)---
----S.156---Rectification of mistakes---Scope of exercise of jurisdiction conferred upon an Income Tax Authority and Income Tax Appellate Tribunal under 5.156 of the Ordinance is quite limited which cannot go beyond looking for a mistake apparent on the face of the order sought to be rectified.
M.A. Malik, F.C.A. for Appellant.
Mrs. Shahnaz Rafique, D.R. for Respondent.
Date of hearing: 31st August, 1994.
ORDER
NASIM SIKANDAR (JUDICIAL MEMBER).---These appeals by an individual assessee assail two different orders of the first appellate authority. Through the first order, dated 30-12-1992, the appeal filed against the assessment order, dated 31-5-1992 was dismissed on account of its being out of time. By way of the other order, dated 31-7-1993 the same appellate authority refused to rectify under section 156 of the Ordinance the earlier order of dismissal of appeal.
2. The facts of the case are stated in these terms. The assessee an individual engaged in supplying building material returned an income at Rs.100,000 by filing a return for the first time in the year 1991-92. Instead an assessment was framed at a sum of Rs.205,000 after rejection of declared version. The assessment order, dated 31-5-1992 and the demand notice were served upon the assessee on 2-8-1992. On 1-9-1992 -the A.R. of the assessee approached the office of first appellate authority, CIT(A), Zone V, Lahore to file an appeal. This was admittedly the last day for filing of the appeal. Since no one authorised to receive the memo. of appeal was allegedly available on the office, the A.R. of the assessee after waiting till closing hours dispatched the appeal papers through post on the same day. The appeal was received in the office of the appellate authority on the very next day viz. 2-9-1992 though making it delayed by one day. Notice under section 131(1) of the Ordinance for hearing of the appeal was served on 24-12-1992 and the appeal heard on 30-12-1992. No order was announced at the time of hearing nor delay in filing of appeal was allegedly mooted or otherwise pointed out by the appellate authority. On 18-3-1993 the following appellate order was received by the appellant:
"This income-tax appeal for assessment year 1991-92 has been filed on 2-9-1992 while demand notice in this case was served on 2-8-1992. The appeal being out of time stands dismissed." .
3. Thereupon the assessee filed an application for rectification on 13-4-1993 praying that the dismissal order be rectified and the appeal decided on merit after condoning delay of one day if at all there was one. This application was rejected by an order communicated to the assessee in the form of a letter from the first appellate authority, dated 19-4-1993. In this letter the appellate authority expressed its surprise as to why the assessee sent the appeal through post and not by hand as the assessee was stationed at Lahore. The assessee filed yet another application for rectification on the very day of receipt of this letter viz. 20-4-1993 again explaining the delay in filing of appeal on account of absence of the officials of the appellate authority on the eventful day. On the face of this application, statedly, the appellate authority recorded "the delay condoned, fix appeal for hearing by rectification under section 156". However, as the ill-luck would have it, the CIT(A) recording this order of condonation is transferred and the second application for rectification is heard on 31-.7-1993 by his successor-in-office. And, the order of dismissal of this application is received by the assessee on 24-8-1993. In that order it is held that the assessee had not been able to point out any mistake apparent from the record and, therefore, "the present application is waste of time and accordingly dismissed".
4. This order of dismissal of application under section 156 of the Ordinance was assailed before the Tribunal on 28-9-1993. In the course of hearing the assessee taking clue from some observations of the Bench sought time and then filed the second appeal on 22-3-1994 impugning the order, dated 30-12-1992 whew the appeal was dismissed as time-bared. This latter appeal which is accompanied by an application for condonation of delay is admittedly barred by limitation by 369 days. The reason for delay and the prayer, for condonation is stated to be the bona fide mistake of the learned A.R. in advising filing rectification applications and pursuing of the matter in a wrong forum.
5. The narration of above facts indicate that the question which falls for our adjudication is sufficiency of cause for non-filing of the last stated appeal within the prescribed time. Incidentally this question was also relevant in the appeal filed by the assessee before the first appellate authority.
6. On the issue of delay of 369 days in filing of appeal before this Tribunal it is contended that the assessee on the wrong advice of his A.R. remained prosecuting his applications for rectification before the CIT(A) bona fide in good faith and with the honest hope to find a relief. It is, therefore, stated to be a sufficient cause for delay in approaching this Tribunal. According to the learned A.R., Mr. M.A. Malik, FCA who has been representing the assessee at all the earlier stages he sincerely felt that the order, dated 30-12-1992 suffered from a mistake apparent from the record and, therefore, advised the assessee on both of the occasions to go for a rectification application instead of filing appeal against the order of dismissal. Also that mistake so committed was a bona fide one and that the assessee should not be penalised for the same. Learned A.R. further contends that the first appellate authority having once condoned the delay and ordered refixation of appeal on merits has also been a contributory to the delay. It is claimed that if the condoning appellate authority had not been transferred in the meanwhile the ordeal of the assessee would have been of much shorter span. It is finally stated that from the day of receipt of dismissal order, dated 30-12-1992, the assessee has all along been attempting to get a mistake corrected which, as the condonation order indicates, was once almost undone by the concerned authority.
7. In support of the prayer for condonation reliance is placed upon a reported case of the Supreme Court of India In re: Controller Land Acquisition v. Mst. Katiji and others (1987) 56 Tax 130 SC (India). In this case their Lordships laid down general principles for adherence while deciding applications for condonation under section 5 of the Limitation Act. M.P. Thakkar, J. speaking for the Court favoured a justice oriented approach finding that:
(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
(2) Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.
(3) "Every day's delay must be explained" does not mean that a pedantic approached should be made. Why not every hour's delay every second's delay? The doctrine must be applied in a rational, common sense and pragmatic manner.
(4) When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.
(5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.
(6) It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
8. The submissions made by the learned AR find support from the ratio of this case. It may be stressed that their Lordships of the Indian Supreme Court were deciding the petition for condonation under the provisions oaf section 5 of the Limitation Act which are not only in pari materia but also couched in similar words as those contained in section 134(4) of the Income Tax Ordinance. The provision so far as relevant provides:
"Section 134(4).--The Appellate Tribunal may admit an appeal after the expiration of the period specified in subsection (3) if it is satisfied that the appellant was prevented by sufficient cause from presenting it within that period."
9. In our view the power to condone delay conferred upon this Tribunal under section 134(4) of the Ordinance (as also the first appellate authority under section 130(3), is wider than the one contained in section 5 of the Limitation Act, 1908. One reason for this can be stated to be the in application of the notion of accrual of valuable right to an adversary after the lapse of limitation in ordinary cases of civil nature. In Revenue matters, undoubtedly since it is always the State against a citizen or assessee, the interest of immediate recovery cannot be described as accrual of valuable right. Even otherwise the kind of right coming into being by reason of default of a party to approach a particular forum within a specified time is not an absolute right nor does it frustrate exercise of judicial discretion wherever a condonation is provided for in a statute. Tax in whatever form is an exaction for money from the subject. Its recovery or payment when it has become due does contain an element of public interest. However, such interest cannot be equated with the accrual of a valuable right, which an individual may normally acquire against another. In PLD 1960 (W.P.) Lahore 85 (re: Abdul Waheed v. The State) the delay in filing of a criminal appeal was excused under section 5 of the Limitation Act on the ground that no valuable right accrued to opposite-party, the State.
10. The second reason for a liberal interpretation of section 134(4) is the distinctive nature of the proceedings under the Ordinance. In matters of civil nature primary purpose behind prescribing limitation for an action is to bring the proceedings to an end and to clothe them with banality so that people may feel secure in rights to their person and property when the prescribed limitation has run out. In revenue matters on the other hand, a demand once created is not subject to a fixed period nor would it lapse if not recovered in a certain period. A demand when created is a Sword of Damocles hanging on the head of an assessee till the liability is discharged. This advantage being available with the revenue in spite of its being an equal party before this Tribunal, it becomes all the more necessary that limitation prescribed under the statute and the discretion given in condoning the delay is liberally exercised. We may not, however, be understood to mean a permission amounting licence in excusing delays as a matter of course. In case of every such request, it is the facts and circumstances of each case which should be considered for exercise of discretion. A request for condonation, be it from the assessee or the revenue, if it is contumacious and frivolous, though for one day, may not be accorded acceptance. For, exercise of discretion in favour of an indolent appellant would at least be allowing an undue advantage to the appellant. As per PLD 1952 B.J. 8 a Court may refuse to extend time even if there be sufficient cause for delay.
11. The third reason for our lenient view of the delay is also peculiar to the income-tax proceedings when juxtaposed with those before civil or criminal Courts or the Tribunal of special jurisdiction. This lies in the representation on behalf of an assessee. Whereas generally in all proceedings before various Courts or Tribunals lawyers or advocates represent the parties, in income-tax proceedings, besides lawyers and advocates who are specially trained and instructed in law, other persons listed in section 157 of the Ordinance read with Rule 16 of the Income Tax Appellate Tribunal Rules, are also authorised to appear. The list includes any person authorised in writing by the assessee who may be a relation, an employee of the assessee, any official of a scheduled bank with which the assessee maintains a current account or has other regular dealings, an accountant or income Tax Practitioner. The last mentioned two usually represent assessees more frequently viz. an Accountant and an Income Tax Practitioner. In the aforesaid section, there are stated three categories of Accountants who can appear and plead before this Tribunal or other Income - Tax Authorities. An I.T.P. is a person who is registered as such with the C.B.R. His educational and accountancy qualifications are prescribed by the C.B.R. Except for advocates and lawyers, none from the above list is particularly trained and instructed at law. Their expertise s are usually confined to the study of income-tax a "special law" as opposed to the term and significance known in jurisprudence as just". Therefore, in cases of pure legal technicalities or intricacies it would not be realistic to expect of them the same degree of legal acumen as those who have had the facility or exposure to the study and practice of law proper. Accountants and Income Tax Practitioners with accountancy background have an edge on accounting side. This is natural. These authorised representatives, as said above, however, are to same extent handicapped in matters of complicated legal issues. The true extent and exact parameters of rectification under section 156 of the Ordinance in the case before us can be cited as an example.
12. We-have instances where Superior Courts allowed some consideration even to lawyers from mofussil when placed with members of their fraternity engaged in practice at the principal seat of the High Court. A Full Bench of Allahabad High Court while considering an application under section 5 of the Limitation Act for condonation of delay took stock of the case-law by that Court since the promulgation of that Act in 1908. In that case re: Shib Dayal and another v. Jagannath Prasad 636 All. 44. The Indian Tax Law Reports Vol. XLIV decided on February 27, 1922, the appellant did not file a copy of the order of the Court of first instance which was mandatory. On objection by office the required copy was filed after the prescribed limitation had lapsed. In the application under section 5 of the Limitation Act, it was pleaded that their Vakil conducting the case at District Court had advised them that filing of order of the original Court was not necessary. During arguments Justice Stuart suggested deviation from the earlier decisions of same Court and desired following the English decisions. A specific mention of the case re: Hesly (1894) 1 OB 742 was made in which Devey, L.J. concluded his judgment by saying "I cannot see that a mistake made by solicitor of the party who is applying for an extension of time is sufficient ground for extending it". Sir Grimwood Mears, C.J. speaking for the Bench preferred following of the earlier practice of the Court and to allow the application considering the mistake of the counsel to be a "sufficient cause" for late fling of copies. Most important reason that persuaded the Full Bench to, allow the request for condonation as a policy being "an honest mistake even though negligent one ought not in the present state of profession in the Districts be allowed to operate to the prejudice of clients".
13. As to the dismissal of appeal as time (barred by the first appellate authority after hearing the case on merits, learned AR seeks support from a reported case of Supreme Court of Pakistan PLD 1974 SC 17 (re: Faiz Ali Shah v. Chief Administrator Auqaf. In this case a Division Bench of Lahore High Court suo motu raised the question of limitation. The office had earlier recorded a note that the appeal in question was time-barred and in spite of that their Lordships had adjourned the case for regular hearing on their next circuit. The Supreme Court found that the order of the learned Division Bench in directing listing of appeal for next circuit in spite of "time-barred note" by the office, was capable of being interpreted that the delay had been condoned and, therefore, no application for condonation of delay was necessary. In the circumstances their Lordships found that the Bench finally hearing the appeal and raising question of delay suo motu in fairness should have granted appellants prayer and afforded opportunity to explain delay and to file affidavit even if no application for condonation of delay had been filed earlier, To the same effect are the findings of a Single Bench of the Lahore High Court in re: Subhan Khan v. Nawal Khan reported as PLD 1990 Lahore 302. In that case under Order 37 on an application under rule 3, C.P.C: his Lordships found that filing of condonation application under section 5 of the Limitation Act alongwith the proceedings was not essential or that unless it was so done "prayer for condonation" could not be looked into.
14. We are, however, not inclined to accept the parallels drawn between the facts before us and those obtaining in the reported case from Madhya Pardesh High Court. In that case re: CIT, Madhya Pradesh v. Kamla Oil Mills, Khargone (1975) 31 Tax 164 an assessee filed a delayed return on which the assessing officer issued notice under section 23(2) of the late Act, 1922 and examined the accounts so produced on number of occasions. The case was adjourned from time to time for that purpose but finally the Assessing Officer filed the return with remarks that the loss returned was out of time. On appeal the learned AAC held that the Assessing Officer must be deemed to have condoned the delay in filing of return when he issued notice under section 23(2) of the Act. The matter was remanded. On remand the Assessing Officer though computed the loss but again refused its carrying forward on the ground that the loss returned for the year was not filed in time. The assessee approached the first appellate authority in the second round. The first appeal was allowed on the short ground that earlier order of the AAC had to be implemented as the Revenue did not file any appeal against that order. On further appeal before the Tribunal the plea of the Revenue was rejected and it was held that the Revenue having failed to challenge the earlier order of the AAC could not refuse to implement that order. Reference was taken to the Madhya Pradesh High Court where it was found that the Assessing Officer having power to grant further time under section 22(2-A) of the Income-tax Act, 1922, his action under section 23(2) of the same Act was consistent only with the inference that' he had impliedly granted further time for filing of return by condoning delay in its late filing.
15. To repeat we find no similarity in the facts and the questions involved in that case with the one under discussion before us. The contention based upon ratio of the said case that the first appellate authority having issued a notice for hearing of appeal under section 131(1) impliedly condoned the delay and, therefore, could not subsequently dismiss the appeal on account of its having been barred by time cannot be entertained. Filing of return is a legal requirement and a failure on the part of a person may entail fine or prosecution in certain cases. Filing of an appeal against an assessment order, on the other hand, is purely a matter of personal choice. The primary reasons which prevailed with their Lordships of the Madhya Pradesh High Court to refuse was the inability of the Revenue to challenge the order of the first appellate authority before the Tribunal which resulted in clothing that order with finality. Also, probing of the declared loss and subsequent proceedings conducted for appraisal of the declared version was the other reason for the said conclusion of their Lordships. Therefore, while we will respectfully agree with the ratio and the reasons of their Lordships as far as the filing of return, the principle settled, however cannot be extended to appeal proceedings nor an implied condonation in such proceedings. Here we will again refer to the findings of the aforesaid case by the Supreme Court of Pakistan re: Faiz Ali Shah (supra). What their Lordships finally concluded was that the assessee ought to have been given an opportunity to explain the delay and to file an affidavit in support thereof where the appeal was posted for regular hearing in spite of a note from the office that the appeal was barred by time. It was only in the context of the admission note recorded by the learned Division Bench that their Lordships found that the appellant could have been misguided by the admission note and, therefore, dismissal of appeal after suo motu raising of question of limitation was improper. There was not an "implied" condonation of delay by the appellate authority. Neither was there any "deemed" condonation which allegedly resulted in this case on account of issuance of notice of hearing of appeal by the appellate authority under section 131(1) of the Ordinance. Mere issuance of notice for hearing under the aforesaid provision of the Ordinance cannot and does not amount to "deemed" condonation of delay in filing of appeal. In PLD 1964 SC 236 the Supreme Court refused to entertain the submission that the Custodian of Evacuee Property was supposed to have "impliedly" condoned delay by his having confirmed transfer at revision stage. Equally inappropriate is the contention that the appeal having been delivered to the postal authorities on the last day, of limitation, it was filed well within time. Handing over of appeal to postal authorities is not "filing" of an appeal. No official or private agency can be treated as an agent of the appellate authority unless specifically so designated or authorized.
16. Before closing this part of the order we would like to express our disapproval of the handling of applications under section 156 of the Ordinance. An application under section 156 or for condonation under section 130(3) of the Ordinance before the first appellate authority is a "lis" which can be disposed of only by recording a judicial order like those recorded on appeals. The rejection of first application under section 156 in this case through a letter addressed to the assessee was clearly improper. Also, recording of condonation of delay in the hands of the appellate authority on the face of second application was altogether illegal. In PLD 1964 SC 236 at 255 (re: AtaullahMalik v. The Custodian Evacuee Property, West Pakistan and Karachi etc.), it was held that under section 5 of the Limitation Act (prayer for condonation of delay) there has to be a finding of sufficient cause". It also means ruling on insufficiency of cause when the request is refused. It has also been noted with concern that appellate authority did not even sign the order. And, on the other identical applications by family members of the assessee placed in similar circumstances and also being applicants for condonation, only a word `same' was written to express identical orders. This was again illegal facie. Even otherwise an AAC cannot disturb the order passed by his predecessor admitting a time-barred appeal as held by their Lordships in (1976) 103 ITR 759.
17. As observed above to condone delay on an application is a judicial order, and therefore, has to be supported by proper reasons recorded separately and conveyed to the assessee in the same manner as other orders on appeals are conveyed. Reason and record are two hallmarks of all judicial and quasi-judicial proceedings. An order not supported by reasons is just like an oral order which no judicial authority could ever pronounce, Kings and Lords of the ancient history, excepted.
18. In PLD 1970 SC 173 (re: Mollah Ejhar Ali v. Government of Pakistan) a Full Bench of the Supreme Court of Pakistan deprecated the manner in which a petition was earlier disposed of by a Single Bench of High Court. The appellant in that case challenged his removal from District Council, Khulna through a writ petition, which was dismissed by a single sentence order reading "The application is rejected as there is no substance in it". The Supreme Court while accepting the contention that the aforesaid order was not a proper disposal of the case recorded as follows:
" ....there is no doubt that the High Court's order which is unfortunately perfunctory gives the- impression of hasty off-hand decision which, although found to be correct in its result, is most deficient in its content. If a summary order of rejection can be made in such terms, there is no reason why a similar order of acceptance saying `there is considerable substance in the petition which is accepted', should not be equally blessed. This will reduce the whole judicial process to authoritarian decrees without the need for logic and reasoning which have always been the traditional pillars of judicial pronouncements investing them with their primary excellence of propriety and judicial balance. Litigants who bring their disputes to the law Courts with the incidental hardships and expenses involved to expect a patient and a judicious treatment of their cases an their determination by proper orders. A judicial order must be a speaking order manifesting by itself that the Court has applied its mind to the resolution of the issues involved for their proper adjudication. The ultimate result may be reached by a laborious effort, but if the final order does not bear an imprint of that effort and on the contrary discloses arbitrariness of thought and action, the feeling with the painful results, that justice has neither been done nor seem to have been done is inescapable. When the order of a lower Court contains no reasons, the appellate Court is deprived of the benefit of the views of the lower Court and is unable to appreciate the processes by which the decision has been reached."
19. In a recent case re: Brigd. Mazharul Haq and others v. MCB, Islamabad PLD 1993 Lahore 706 a Division Bench of the Court reaffirmed the aforesaid view of the Supreme Curt of Pakistan by holding that failure to give reasons on the part of an appellate authority was indicative of arbitrariness of thought and action. The views expressed by this Tribunal on the subject in the reported cases cited as 1980 PTD (Trib.) 55; 1993 P.TD 771 and 1144 can also be referred to bring home the point.
20. The order of the first appellate authority to condone delay was otherwise per se illegal because no appeal was pending before that authority on the day when the alleged condonation was allowed. No appeal being pending, no question of condonation of delay in its filing could arise at all. For, after dismissing the appeal the appellate authority became functus officio as far the question of limitation (or its condonation) was concerned.
21. We now revert to the question of delay and the prayer for its condonation. To condone or not to condone a delay hinges upon the consideration of "sufficient cause" which in turn depends on the facts and circumstances of every case. There is plethora of case-law explaining the meanings of the term "sufficient cause" nr "sufficient reason" in the context of the facts brought to the notice of the Courts in those cases. Therefore, every case has to be dealt with keeping in view all the attending circumstances per PLD 1959 (W.P.) Lahore 8 (re: The State v. Ghulam Shah). For this reason an attempt to define "sufficient cause" is not considered advisable as it amounts to crystallize in a rigid definition that judicial power and discretion which the legislature has left undermined and unfettered. Occasionally, while dealing with specific facts, learned Judges have also laid down the principles that attained the quality of an edict. In 636 All 44 (supra) Justice Prama Charan Benerji though agreeing with the result, recorded a separate note on the said judgment with these epoch-making remarks: "what constitutes sufficient cause cannot be laid down by hard and fast rules. The sufficient cause must be determined on a reference to the circumstances of each case. In my opinion the expression "sufficient cause" should be liberally construed so as to advance substantial justice". The veracity of the view can best be seen in the finding of a recent Single Bench decision of the Lahore High Court PLD 1990 Lahore 302 (supra) "In absence of negligence, inaction or want of bona fides imputable to a party, word "sufficient cause" must receive a liberal construction so as to advance the cause of substantial justice" To these findings we resort to consider the prayer for condonation. Although there is no provision in the Income Tax Ordinance equivalent to section 14 of Limitation Act, which provides for exclusion of the time of proceedings bona fide in Court without jurisdiction yet the case-law on the subject has also been benefited from to evaluate the submissions made in this regard.
22. In the case before us, apparently advice by the learned AR who is a Chartered Accountant was acted upon in good faith by the assessee in going ` for rectification application twice instead of filing an appeal. The appellant diligently continued agitating the matter though in a wrong forum and proceedings. Also, the appellate authority did not act in accordance with law while dealing with the applications. Further, the Revenue is not likely to be prejudiced in any manner if the request for condonation is allowed. Learned D.R. has not pointed out any mala fide or even negligence on the part of the assessee who is likely to be seriously affected not only in the year under review as the assessment framed against him shall stand confirmed but also for the fact that the Department has a tendency to add something on to the income while framing assessment in subsequent years.
23. Keeping in view the peculiar facts of the case and reasons recorded above the request for condonation appears neither contumacious nor frivolous. Therefore, we consider it to be a fit case for exercise of our discretion under subsection (4) of section 134 of the Income Tax Ordinance and accordingly condone the delay in filing of the appeal impugning the order of the appellate authority dated 30-12-1992. Further, for the other reasons also obtaining above we will set aside the aforesaid order of dismissal of appeal as time-barred and remand the case to the appellate authority. The assessee shall be allowed an opportunity to explain the delay of one day in filing of the appeal and in case an application for condonation is made, the same shall be disposed of by a reasoned order.
24. Finally the other appeal filed against rejection of second application under section 156. We feel no hesitation in remarking that it did not lay in the first instance. Even if all the contentions made in the memo. of appeal are accepted and it is also ignored that no appeal could possibly be filed when rejection of first application under the same provision was not assailed, still this Tribunal cannot make any order of the kind prayed for in this appeal. In cases of rectification applications the scope of exercise of jurisdiction conferred upon an income-tax authority (and this Tribunal too) is quite limited which cannot go beyond looking for a mistake apparent on the face of the order sought to be rectified. In the appeal filed by the assessee against refusal of the first appellate authority to rectify its earlier order, dated 30-12-1992 no order could possibly be made by this. Tribunal for condonation of delay or a direction to the appellate authority to hear the appeal on merits as prayed for. This appeal before the Tribunal, therefore, was wedded to failure the moment it was filed. It shall meet its fate of rejection.
M.BA./120/T Order accordingly.