ITAS. NOS. 166/KB, 141/KB TO 144/KB, 832/KB, 1088/KB TO 1090/KB OF 1995-96 VS ITAS. NOS. 166/KB, 141/KB TO 144/KB, 832/KB, 1088/KB TO 1090/KB OF 1995-96
1996 P T D (Trib.) 388
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Mujibullah Siddiqui, Chairman and S.M. Sibtain, Accountant
Member
ITAs. Nos. 166/KB, 141/KB to 144/KB, 832/KB, 1088/KB to 1090/KB of 1995-96 and WTAs. Nos.221/KB to 225/KB of 1995-96, decided on 23/01/1996.
(a) Wealth Tax Act (XV of 1963)---
----S. 23(1) [as amended by Finance Act (XII of 1994)]---Enhancement of appeal fee from Rs.500 to Rs.2,500 or 10% of the tax levied whichever was less and in case where no, tax was levied a fee of Rs.2,500 was applicable to the appeals pertaining to ,the Assessment Year 1994-95 onward only---Such enhancement was not applicable to the appeals for the period up to the assessment year 1993-94 which would be governed by the unamended provision relating to the appeal fee.
1995 PTD (Trib.) 482 and 1995 PTD (Trib.) 1113 ref.
(b) Income Tax Ordinance (XXXI of 1979)--
----S. 130(1) [as amended by Finance Act (XII of 1994)]---Enhancement of appeal fee from Rs.500 to Rs.2,500 or 10% of the tax levied whichever was less and in case where no tax was levied a fee of Rs.2,500 was applicable to the appeals pertaining to the assessment year 1994-95 onward only---Such enhancement was not applicable to the appeals for the period up to the assessment year 1993-94 which would be governed by the unamended provision relating to the appeal fee.
1995 PTD (Trib.) 482 and 1995 PTD (Trib.) 1113 ref.
(c) Income Tax Ordinance (XXXI of 1979)---
----S. 136---Constitution of Pakistan (1973), Art.201---Judgment of High Court enunciating any principle of law have the force of precedent and are binding on all the Courts subordinate to High Court and Tribunals including Income Tax Appellate Tribunal, Commissioner of Income Tax (Appeals) and Appellate Assistant Commissioner and all other functionaries working under the Income Tax Ordinance, 1979.
It is the bounden duty of the Judges of the Court subordinate to the High Court to implicitly follow the decisions pronounced by the High Court and any attempt on their part to criticize them or to refuse to follow them or to distinguish the rulings on flimsy grounds must be deprecated. The subordinate Courts have no choice in the matter. They have not to judge for themselves whether the decision is correct or not. The judgments of High Court enunciating any principle of law have also the force of precedent and are binding on all the Courts and Tribunals including Income Tax Appellate Tribunal,, CIT(As)/AACs and all other functionaries working under the Income 'Tax Ordinance.
(d) Income Tax Ordinance (XXXI of 1979)---
----Ss. 134 & 8---Judgment of Income Tax Appellate Tribunal---Interpreting or enunciating any point of law has the force of precedent and is binding in absolute form on the other functionaries in tax collection hierarchy established under the Income Tax Ordinance, 1979 subject to the right of invoking advisory jurisdiction of High Court in reference under S.136, Income Tax Ordinance, 1979---As soon as any judgment is announced by the Income Tax Appellate Tribunal or the High Court it becomes binding on the Commissioner of Income Tax Appeals and Appellate Assistant Commissioner being the subordinate judicial forums notwithstanding the pendency of issue in reference before the High Court or any appeal before the Supreme Court of Pakistan.
Income Tax Appellate Tribunal is the final fact finding forum in the hierarchy of judicial forums established under the Income Tax Ordinance, 1979. On the points of law the findings of Income Tax Appellate Tribunal are subject to judicial scrutiny by the High Court under its advisory jurisdiction and the judgment of High Court is appealable to the Supreme Court of Pakistan under section 137 of the Income Tax Ordinance, 1979. However, a judgment of the Income Tax Appellate Tribunal interpreting or enunciating any point of law has the force of precedent and is binding in absolute terms on the C.I.T.(As)/A.A.Cs. and has a binding force on the other functionaries in the tax collection hierarchy established under the Income Tax Ordinance, 1979 subject to the right of invoking advisory jurisdiction of the High Court in reference under section 136 of the Income Tax Ordinance, 1979. A judgment of the Income Tax Appellate Tribunal has the force of precedent which can be inferred from the fact that the judgments of those Courts and Tribunals only are reported in the law journals under the Law Reports Act, 1875 which have the force of precedent.
Although the Income Tax 'Appellate Tribunal is not included in the expression "superior judiciary", however, judgments pronounced by the Income Tax Appellate Tribunal have the force of precedent. It is further indicative of the fact that the Service Tribunal, Income Tax Appellate Tribunal and National Industrial Relations Commission have been placed at higher pedestal than the other subordinate judiciary. Under the Income Tax Ordinance, 1979 there are two hierarchies of Authorities, one on administrative/tax collection side starting from Inspectors of Income-tax and culminating at Central Board of Revenue which is at the apex of the administrative hierarchy. On the other hand, there is a judicial hierarchy which starts from Income Tax Officer and in the higher appellate authorities the CIT (As)/AACs, Income Tax Appellate Tribunal, High Court and Supreme Court are included. The functionaries falling under the administrative hierarchy and while discharging the administrative duties are bound to follow the orders, instructions and directions of the C.B.R. by virtue of the provisions contained in section 8 of the Income Tax Ordinance, 1979. However, the C.B.R. is precluded specifically by virtue of proviso to section 8 of the Income Tax Ordinance, 1979 from giving any orders, instructions or directions so as to interfere with the discretion of the Appellate Additional Commissioner (C.I.T.(A) in the exercise of his appellate functions. The assessing officer (D.C.I.T., A.C.I.T: and all the assessing officers) combined in them the administrative as well as quasi judicial functions. The Additional Commissioners while exercising powers under section 66-A and the Commissioners Income Tax exercising powers under section 138 exercise quasi-?judicial functions as both these officers exercise revisional jurisdiction under section 66-A and section 138 of the Income Tax Ordinance, 1979. Except that all other functions of the Income Tax Authorities excluding C.I.T.(As)/A.A.Cs. fall within the purview of administrative functions. However, the C.I.T. (As)/A.A.Cs. do not perform administrative functions and they discharge quasi-?judicial functions exclusively. Except C.I.T. (As)/A.A.Cs. all other Income-tax Authorities may be party to the proceedings envisaged under the Income Tax Ordinance, 1979, but the C. I. T.(As)/A. A. Cs. are never party to any income-tax proceedings and they perform judicial functions in the hierarchy of judicial authorities established under the Income Tax Ordinance, 1979. Thus, any judgment by the C.I.T.(As)/A.A.Cs., Income Tax Appellate Tribunal or High Court is binding on the Income Tax Authorities discharging administrative functions and it deserves all respect from them but it is subject to their right of appeals/reference and till the judgment has attained finality the functionaries in the administrative hierarchy are allowed to act according to their point of view in order to keep the issue alive which is sub judice at any judicial forum. However, the status of C.I.T. (As)/A.A.Cs. is different the C.I.T.(As)/A.A.Cs. are never party to the proceedings, therefore, as soon as any judgment is pronounced by the Income Tax Appellate Tribunal or High Court it becomes binding on the C.I.T.(As)/A.A.Cs. being the subordinate judicial forum notwithstanding the pendency of issue in reference before the High Court or any appeal before the Supreme Court of Pakistan.
(e) Income Tax Ordinance (XXXI of 1979)---
----Ss. 8 & 134---Judgment of Income Tax Appellate Tribunal being binding or the Income Tax Commissioners (Appeals) and Appellate Assistant Commissioners, instructions issued by Central Board of Revenue to the contrary to the said functionaries is ultra vires and in excess of jurisdiction being violative of the law contained in proviso to S.8, Income Tax Ordinance, 1979 .
(f) Income Tax Ordinance (XXXI of 1979)---
----S. 134 & 8---Judgment of Income Tax Appellate Tribunal being binding on the Income Tax Commissioners (Appeals) and Appellate Assistant Commissioner; indiscipline on the part of 'such functionaries or subordinate officials by side tracking/avoiding the Judgments of Higher Forums or refusing to follow them expressly deprecated---Income tax Appellate Tribunal, however, observed that it was the duty of Central Board of Revenue to see that the officers under its administrative control invested with the power to discharge judicial functions have adequate knowledge of law, judicial training and have sense of judicial discipline.
1995 PTD (Trib.) 482; 1995 PTD (Trib.) 1113; PLD 1987 Lah. 633; 1970 PCr. LJ 765; PLD 1982 Lah. 244; PLD 1981 Kar. 138; Central Insurance Co and others v. C.B.R. (1993) 68 Tax 86 = 1993 PTD 766; ITA No.951/HQ of 1990-91 and ITA No.864/HQ of 1990-91 ref.
Munir Ansari for Appellant (in ITA No. 166/KB of 1995-96).
Mrs. Zarina N. Zaidi, D.R. for Respondent (in ITA No.166/KB of 1995-96).
Muniruddin Ansari for Appellant (in.ITAs.Nos.141/KB to 144/KB of 1995-96).
Mrs. Zarina N. Zaidi, D.R. for Respondent (in ITAs.Nos.141/KB to 144/KB of 1995-96).
Arif Muhammad Khan for Appellant (in WTAs.No.221/KB to 225/KB of 1995-96).
Mrs. Zarna N. Zaidi, D.R. for Respondent (in WTAs.No.221/KB to 225/KB of 1995-96).
Mazharuddin for Appellant (in ITA No.832/KB of 1995-96).
Mrs. Zarina N. Zaidi, D.R. for Respondent (in ITA No.832/KB of 1995-96).
Aminuddin Ansari for Appellant (in ITA Nos. 1088/KB to 1090/KB of 1995-96).
Mrs. Zarina N. Zaidi, D.R. for Respondent (in ITA Nos. 1088/KB to 1090/KB of 1995-96).
Date of hearing: 15th January, 1996.
ORDER
MUHAMMAD MUJIBULLAH SIDDIQUI (CHAIRMAN).?The above appeals are directed against the various orders of different C.I.T.(As). As the point for consideration in all the appeals is common, therefore, the appeals have been heard together and are being disposed of by this consolidated order.
2. The common point for consideration in all the above appeals is if the amendment made in section 23(1) of the Wealth Tax Act, 1963 enhancing appeal fee from Rs.500 to Rs.2,500 or 10% of the tax levied whichever is less and in case where no tax is levied a fee of Rs.2,500 is to be paid and a similar amendment in section 130(1) of the Income Tax Ordinance, 1979 is applicable to the appeals pertaining to the assessment years 1994-95 onwards or the amendment enhancing appeal fee is applicable to the appeals preferred in respect of the assessment years prior to the assessment year 1994-95 as well.
3. The facts giving rise to the above issue are that the appellant before us preferred appeals before different C:I.T.(As) for the years 1989-90 to 1994-95. The learned C.I.T.(A) dismissed the appeals with the following finding:
"Since the appeal fee has not been paid at the enhanced rate of Rs.2,500 the appeals do not lie and as such are being dismissed in limine being inadmissible."
4. The learned C.I.T.(A) Zone-V, Karachi dismissed first appeals pertaining to the assessment years 1990-91 to 1993-94 as follows:
"From examination of appeal paper filed by the appellant it is evident that he has paid appeal fee of only Rs.25 per year for all the years under appeal which is not in accordance with the prescribed appeal fee as revised through the Finance Act, 1994. The C.B.R. vide its letter C-No.129(1)DTP-/94, dated 2-1-1995 has also clarified that revised appeal fee is applicable to all the appeals filed on or after 1-7-1994 irrespective of the year of assessment???..as the appellant has failed to make payment of the prescribed appeal fee in accordance with the law all the appeals are dismissed in limine."
2. Mr. Muhammad Farooq Amin, the learned C.I.T.(A) Zone, VII, Karachi dismissed the appeals by making a detailed order and all the learned advocates appearing for the assessees have taken serious exceptions to the observations made by him and to the tenor of language used by him, therefore, in addition to the point in issue as stated in earlier part of the order we have been called upon to dilate on the point if judgments of the income Tax Appellate Tribunal have binding effect on the income-tax authorities and particularly AACs/C.I.T.(A), the first appellate authorities in the hierarchy of judicial forums provided under the law. All the learned counsel for the assessees have submitted that identical amendments enhancing the appeal fee, were introduced in section 130(1) and section 134(5) of the Income Tax Ordinance, 1979 enhancing appeal fee before the 1st and 2nd appellate forum. Further amendments were inserted in subsection (2) of section 129 and subsection (3) of section 134 whereby it was provided that the first appeal shall not lie unless 15 of the amount of tax assessed has been paid and the second appeal shall not lie at the instance of assessee unless an amount not less than 50% of the amount of tax assessed has been paid. All these amendments were inserted by Finance Act, 1994. The amendment- inserted in subsection (2) of section 129 of the Income Tax Ordinance, 1979 whereby a condition was added to the admissibility of first appeal that not less than 15 % of the amount of tax assessed was required to be paid was considered by the C.B.R. and vide letter C.No.129(1) DTP-1/94 PT-1', dated October 19, 1994 it was clarified as follows:
"In supersession of earlier instructions on the subject it is further clarified that the provisions relating to mandatory payment introduced through Finance Act, 1994 and Income Tax (Fourth Amendment) Ordinance, 1994 are applicable to proceedings relating to the assessment year 1994-95 and onwards."
6. The proviso added to subsection (3) of section 134 imposing a condition that no appeal shall lie at the instance of assessee to the Income Tax Appellate Tribunal unless an amount not less than 50% of the amount of tax assessed was paid, came for consideration before a Larger Bench of this Tribunal in the judgment reported as 1995 PTD (Trib.) 482 wherein it was held that the amendment was not applicable to any appeal relating to any year prior to the assessment year 1994-95. The Larger Bench decision of this Tribunal was announced on 27-12-1994. It appears that C.B.R. asserted the interpretation placed by the Larger Bench of Income Tax Appellate Tribunal on the point of applicability of the provision for depositing at least 50% of the tax assessed and, therefore, C.B.R. issued letter C. No.134(I)/DTP-94, dated January 8, 1995 which reads as follows:
"I am directed to refer to your letter No. A/A/Misc.-2/95, dated January 4, 1995 on the subject and to say that amendment in section 134(3) relating to mandatory payment of tax before filing of appeal is applicable to appeals relating to the, assessment year 1994-95 and onwards."
7. The amendment introduced in subsection (5) of section 134. whereby appeal fee in respect of the appeals preferred before the Appellate Tribunal was enhanced from Rs.100 to Rs.5,000 or 10% of the tax levied whichever is less and in the case where no tax was levied a fee of Rs.5,000 was to be paid came for consideration before a Division Bench of this Tribunal in the judgment reported as 1995 P T D (Trib.) 1113. After an elaborate discussion and in-depth examination of all the aspects of law it was held that the provision inserted in subsection (5) of section 134 whereby appeal fee was enhanced shall be applicable to the appeals pertaining to the assessment year 1994-95 onwards.
?
8. With the above judgment of this Tribunal the controversy ought to have been laid to rest but it is unfortunate that .it is still continuing on. The order of this Tribunal reported as (1995) 71 Tax 318 was made on 17-4-1995 and prior to that C.B.R. had issued a clarification vide letter C. No. 129(1)/DPT-94, dated 2nd January, 1995 addressed to Mr. Mir Ahmad. Ali, Advocate, Rawalpindi wherein it was stated as follows:
"I am directed to refer to your letter No. nil: dated December 28, 1994 on the subject and to clarify that the appeal/revision fee as revised through Finance Act, 1994 is applicable to the. appeals filed on or after 1st July, 1994 irrespective of the year of assessment."
9. We have been informed by the learned Advocates for the appellants that after pronouncement of judgment by this Tribunal reported as (1995) 71 Tax 318 the A.A.Cs./C.I.T.(A) had started following the judgment of this Tribunal but C.B.R. issued another letter bearing C.No.3(l6)M(JUD-IT)/93, dated 29th,of October, 1995 which reads as under:.
"SUBJECT: ???? INCREASE IN FEE FOR FILING OF APPEALS AND REVISION PETITIONS---APPLICATION OF AMENDMENT IN SECTION 134 THROUGH FINANCE ACT, 1994.
The undersigned is directed to refer to Member, Income Tax Judicial's minutes, dated 8-8-1995 on file No. 3(16)IT-J/93 and ITAT's order cited (1995) 71 Tax.318(Trib.), dated 17-4-1995 and to state that a reference has been filed before the Sindh High Court against the above cited order. The Board's position regarding application of amendments remains the same as stated in its letter No. 123(1)DTP-I/ 94, dated 2-1-1995 (copy enclosed). This may please be brought to the notice of all AACs/C.I.T.(As). ?????? ?
(Khawar Khurshid Butt),
Secretary (Judicial).
10. After issuance of above letter some of the A.A.Cs./C.I.T.(A) again started following the view held by C.B.R. in the letter; dated 2-1-1995 referred to earlier without realizing that while discharging their duties as A.A.Cs./C.I.T.(A) they were subordinate to the C.B.R. in administrative matters only and in judicial matters they were neither subordinate to the C.B.R. nor they were required to follow any interpretation/instructions/views of the C.B.R. The C.B.R. at the time of issuing letter, dated 29th of October, 1995 reproduced above ignored the fact that they were fully within their jurisdiction and were acting within their competence while deciding to go in reference before the Hon'ble Sindh High Court against the order of this Tribunal reported as 1995 PTD (Trib.) 1113 but they were patently exceeding their limits while giving direction that their view held in the letter, dated 2-1-1995 cited earlier, may be brought to the notice of all A.A.Cs/C.I.T.(A). At the time of issuing letter, dated 29th of October, 1995 the C.B.R. exercised its authority under section 8 of the Income Tax Ordinance, 1979 but totally ignored the proviso to the said section. Section 8 of the Income Tax Ordinance 1979 reads as follows:
"8: All officers to follow the orders of the Central Board of Revenue. All officers and persons, employed in the execution of this Ordinance, shall observe and follow the orders instructions arid directions of the Central Board of Revenue:
Provided that no such orders, instructions or directions shall be given so as to interfere with the discretion of she Appellate, Additional Commissioner in the exercise of his appellate functions any valuer in the exercise of his functions under this Ordinance."
11. The result of above lapse on the part of C. B. R, was that when the first appeals relating to the assessment years 1989-90 to 1992-93 came for hearing before Mr. Farooq Amin, learned C.I.T.(A) Zone-VII, Karachi, he did not merely refuse to follow the judgment of this Tribunal but to pursuance of purported right of freedom of expression allegedly granted to him by the Constitution of the Islamic Republic of Pakistan ventured to criticise the judgment of this Tribunal and went to the extent of saying that he will record his observation in respect of the judgment of Appellate Tribunal. Thereafter the learned C.I.T.(A) has attempted to teach the philosophy of law, background of introducing appeal fee, the reason for its enhancement and the interpretation of statutes for the tribunal. It appears that in his anxiety to support the view held by C B.R. communicated to all the A.A.Cs,/C.I.T.(A) vide letter, dated 29-10-1995 and in order to demonstrate his total allegiance and faithfulness to the C.B.R. the learned C.I.T.(A) crossed all the limits of decency and discipline judged from any standard administrative or judicial. The learned C.I.T.(A), observed that the Appellate Tribunal was misled by the arguments of the Advocates and expressed his own views on the point if the law relating to appeal fee was a fiscal legislation/taxing statute of riot and whether it was applicable with retrospective effect or not. The learned C.I.T.(A) while refusing to follow the judgment of this Tribunal held as follow":
"I do not agree with the learned counsel for the appellant that the said precedent has laid down law because it is by the legislature or the highest judicial forum, the Hon'ble Supreme Court of Pakistan which can lay down the law or amendment. Until shave arrived at the final judgment of the Hon'ble Supreme Court of Pakistan, the law, as laid down in the statute shall prevail."
12. All the learned advocates appearing before us have taken serious exception to the various observations made by the learned C.I.T.(A). The entire order passed by Mr. Farooq Amin, the learned C.I.T (A) is so preposterous that we would not like to engage ourselves in dilating on all the absurdities contained in the said order. As already observed by us the controversy on the point of applicability of the amended provision pertaining to the enhanced appeal fee has been adjudicated upon by us vide judgment reported as 1995 PTD (Trib.) 1113 therefore, without discussing the issue again we reiterate that the amendments relating to the enhanced appeal fee are applicable to the appeals pertaining to the assessment year 1994-95 onward only. The amendment is not applicable to the appeals for the period up to the assessment years 1993-94 which shall be governed by the unamended provision relating .to the appeal fee. We would like to dilate on two points only. First, whether C.B.R. is empowered under the law to issue any directions to the A.A.Cs/C.I.T.(A) relating to the interpretation of arty provision of law which requires judicial consideration by the A.A.Cs and C.I.T.(A) and if any such instructions/directions are issued by the C.B.R. whether such instructions/directions have any legal validity and the A.A.Cs/C.I.T.(A) are bound to follow such instructions/directions. The second point which we would like to consider is whether the judgments of this Tribunal and the judgments of Hon'ble High Court are binding on the A.A.Cs/C I.T.(A) notwithstanding the pendency of reference before the Hon'ble High Court or pendency of appeals before the Hon'ble Supreme Court.
13. We have no doubt in our mind that every judgment of the Hon'ble High Court until and unless overruled. by the Hon'ble Supreme Court of Pakistan is binding on this Tribunal, C.I.T.(As)/A.A.Cs. and all other functionaries in the hierarchy of officials working under the Income Tax Ordinance, 1979. However, we propose to dwell on the binding nature of the judgment of Hon'ble High Court for the reason that learned C.I.T.(A) Mr. Farooq Amin has observed that, "it is only the legislature or the highest judicial forum the Hon'ble Supreme Court of Pakistan which can lay down the law".
14. Taking the second point, first, we would like to refer Article 201 of the Constitution of the Islamic Republic of Pakistan which reads as follows:
"201. Decision of High Court binding on subordinate-Courts.---Subject to Article 189 any decision of a High Court shall, to the extent that it decides a question of law or is based upon or enunciates a principle of law, be binding on all Courts subordinate to it. "
15. 'The point came for consideration before the Hon'ble Lahore High Court in the judgment reported as PLD 1987 Lahore 633 and it was held that decision by a High Court is binding on all Courts subordinate to it. It has been further held that it is the bounden duty of the Judges of the Court subordinate to the High Court to implicitly follow the decisions pronounced by the High Court and any attempt on their part to criticize them or to refuse to follow them or to distinguish the rulings on flimsy grounds must the deprecated. The subordinate Courts have no choice in the matter. They have not to judge for themselves whether the decision is correct or not. (See 1970 PCr. LJ 765 (Lahore), PLD 1982 Lahore 244, PLD 1987 Lahore 633, PLD 1981 Karachi 138). Thus, it is held that the learned C.I.T.(A) Mr. Farooq Amin fell in serious error of law by holding that the judgment of the Hon'ble Supreme Court of Pakistan only has the force of precedent. The judgments of Hon'ble High Courts enunciating any principle of law have also the force of precedent and are binding on all the Courts and Tribunals including Income Tax Appellate Tribunal, C.I.T(As)/A.A.Cs. and all other functionaries working under the Income Tax Ordinance. So far the Income Tax Appellate Tribunal is concerned it is the final fact finding forum in the hierarchy of judicial forums established under the Income Tax Ordinance; 1979. On the points of law the findings of Income Tax Appellate Tribunal are subject to judicial? scrutiny by the Hon'ble High Court under its advisory jurisdiction .and the judgment of Hon'ble High Court is appealable to the Hon'ble Supreme Court of Pakistan under section 137 of the Income Tax Ordinance, 1979. However, a judgment of the Income Tax Appellate Tribunal interpreting or enunciating any point of law has the force of precedent and is binding in absolute terms on the C.I.T.(As)/A.A.Cs. and has a binding force oft the other functionaries in the tax collection hierarchy established under the Income Tax Ordinance, 1979 subject to the right of invoking advisory jurisdiction of the Hon'ble High Court in reference under section 136 of the Income Tax Ordinance, 1979. The judgment of the Income Tax Appellate Tribunal has the force of precedent which can be inferred from the fact that the judgments of those Courts and Tribunals only are reported in the law journals under the Law Reports Act, 1875 which have the force of precedent. Explanation to section 5 of the Law Reports Act, 1875 reads as follows:
"Explanation.---For the purpose of this Act the expression "Court or Tribunal" includes the Federal Shariat Court, a Service Tribunal, the Income Tax Appellate Tribunal and the National Industrial Relations Commission. "
16. The above explanation is indicative of the fact that although the Income Tax Appellate Tribunal is not included in the expression "superior judiciary", however, judgments pronounced by- the Income Tax Appellate Tribunal have the force of precedent. It is further indicative of the fact that the Service Tribunal, Income Tax Appellate Tribunal and National Industrial Relations Commission have been placed at higher pedestal than the other subordinate judiciary. At this juncture we would like to state that under the Income Tax Ordinance, 1979 there are two hierarchies of authorities, one on administrative/tax collection side starting from Inspectors of Income-tax and culminating at Central Board of Revenue which is at the apex of the administrative hierarchy. On the other hand, there is a judicial hierarchy which starts from Income Tax Officer and in the higher appellate authorities the C.I.T. (As)/AACs, Income Tax Appellate Tribunal, High Court and Supreme Court are included. The functionaries falling under the administrative hierarchy and while discharging the administrative duties are bound to follow the orders, instructions and directions of the C.B.R. by virtue of the provisions contained in section 8 of the Income Tax Ordinance, 1979. However?the C.B.R. is precluded specifically by virtue of proviso to section 8 of the Income Tax Ordinance, 1979 from giving any orders, instructions or directions so as to interfere with the discretion of the Appellate Additional Commissioner (C:I.T.(A) in the exercise of his appellate functions. Section 8 of the Income Tax Ordinance., 1979 has already been reproduced in earlier part of this order. The assessing officer (D.C.I.T., A.C.I.T. and all the assessing officers) combined in them the administrative as well as. quasi judicial functions. The Additional Commissioners while exercising powers under section 66-A and the Commissioners Income Tax exercising powers under section 138 exercise quasi judicial functions as both these officers exercise revisional jurisdiction under section 66-A and section 138 of the Income Tax Ordinance, 1979. Except as enumerated above all other functions of the Income Tax Authorities excluding C.I.T.(As)/A.A.Cs. fall within the purview of administrative functions. However, the C.I.T. (As)/A.A.Cs. do not perform administrative functions and they discharge quasi judicial functions exclusively. We have described various duties performed by the Income Tax Authorities under the Income Tax Ordinance, 1979 to show that except C.I.T. (As)/A.A.Cs. all other Income-tax Authorities may be party to the proceedings envisaged under the Income Tax Ordinance, 1979; but the C.I.T.(As)/A.A.Cs. are never party to any income-tax proceedings and they perform judicial functions in the hierarchy of judicial authorities established under the Income Tax Ordinance, 1979. Thus, any judgment by the C.I.T.(As)/A.A.Cs., Income Tax Appellate Tribunal or High Court is binding on the Income Tax Authorities discharging administrative functions and it deserves all respect, from them but it is subject to their right of appeals/reference and till .the judgment has attained finality the functionaries in the administrative hierarchy are allowed to act according to their point of view in order to keep the issue alive which is sub judice at any judicial forum. However, the status of C.I.T. (As)/A.A.Cs. is different. As we have already explained the C.I.T.(As)/A.A.Cs. are never party to the proceedings, therefore, as soon as any judgment is pronounced by the Income Tax Appellate Tribunal or High Court it becomes binding on the C.I.Z.(As)/A.A.Cs. being the subordinate judicial forum notwithstanding the pendency of issue in reference before the Hon'ble High Court or any appeal before the Hon'ble Supreme Court of Pakistan. From the perusal of impugned orders of the learned C.I.T.(A) and particularly the order of Mr. Farooq Amin, it appears that there is some misgiving in the minds of these learned C.I.T.(As). While discharging their functions as C.I.T.(A) they still feel themselves bound by the orders/instructions of the C.B.R., in judicial matters as well and moreover they have not been able to detach themselves from the administrative hierarchy. Instead of demonstrating themselves as an independent and impartial judicial officers they have acted like a party to the proceedings in the same manner as an I.A.C. or C.I.T. in administrative hierarchy acts taking the orders/instructions of the C.B.R. as binding on them. As already observed by us the C.B.R.. while issuing letter, dated 29th of October, 1995 purported to exercise its authority under section 8 of the Income Tax Ordinance, 1979 totally ignoring the proviso to the said section and we are of the considered view that if the C.B.R: had beefs cognizant of the proviso to section 8 the said letter would not have been issued to the A.A.Cs/C.I.T.(A), as the issuance of said letter clearly amounts to interference with the discretion of A.A.Cs/C.I.T.(As) in exercise of their appellate functions. The authority vested in the C.B.R: and its validity as well as the hierarchy of administrative and judicial functions under the Income Tax Ordinance, 1979 came for consideration before Hon'ble Supreme Court of Pakistan in the case of Central Insurance Co. and others v. C.B.R. 1993 PTD 766. We can do no better than to cite the findings of Hon'ble Supreme Court of Pakistan which is as under:,
"21. In order to appreciate the above controversy in its proper perspective, it may be pertinent to refer to certain provisions of the Ordinance in order to examine as to the locus standi of the Central Board of Revenue to interpret the provisions of the Ordinance. In this regard, it may be stated that section 3(1) provides that there shall be the following classes of Income Tax Authorities for the purposes of the Ordinance, namely:
(a) Central Board of Revenue;
(aa) Regional Commissioners of Income Tax;
(b)? Director of Survey, Viligance, Inspection and Audit;'
(c) Commissioner of Income Tax;
(d) Assistant Commissioners of Income Tax, who may be either Appellate Assistant Commissioners of Income Tax or Inspecting Assistant Commissioners of Income Tax;
(e) Income Tax Officers; and
(f) Inspectors of Income Tax.
The other subsections of section 3 deal with the question, who would be the in-charge of the various functionaries mentioned, in the above section. It is not necessary to dilate upon the same. It will suffice to mention that under subsection (1) of section 3, the Central Board of Revenue has been shown at the apex of the functionaries of the Income Tax Department.
It may further be observed that section 4 empowers the Central Board of Revenue to appoint Regional Commissioners of Income-tax, Directors of Survey, Vigilance, Inspection and Audit, Commissioners of Income Tax, Income Tax Officers and other executive or ministerial officers and staff as may be necessary.
Section 5 deals with the jurisdiction of the Income Tax Authorities from the level of Regional Commissioner down to the level of the Inspectors of Income Tax. It inter alia empowers the Central Board of Revenue by a general or special order in writing to direct that the jurisdiction of the Commissioner exercising powers of Appellate Assistant Commissioners and Inspecting Assistant Commissioners shall be determined by the Regional Commissioner.
It may further be stated that section 8 lays down that all officers and persons employed in the execution of the Ordinance, shall observe and follow the orders, instructions and directions of the Central Board of Revenue. However, the proviso to the above section provides that no such orders, instructions or directions shall be given so as to interfere with the discretion of the Appellate Assistant Commissioner in the exercise of his appellate functions or any valuer in the exercise of his functions under the Ordinance.
We may also observe that section 129 provides an appeal from an order of Income Tax Officer to the Appellate Assistant Commissioner, whereas section 134 gives the right of appeal before the, Income Tax Appellate Tribunal. It may further be observed that section 136 provides for reference to the High Court for collecting the opinion of the High Court on any legal question. Whereas section 137 provides for an appeal to this Court.
22. It is evident from the above provisions that though the Central Board of Revenue has administrative control over the functionaries discharging their functions under the Ordinance, but it does not figure in the hierarchy of the forums provided for adjudication of assessee's liability as to the tax. In this view of the matter any interpretation placed by the Central Board of Revenue on a statutory provisions cannot be treated as a pronouncement by a forum competent to adjudicate upon such a question judicially or quasi judicially. We may point out that the Central Board of Revenue cannot issue any administrative direction of the nature which may interfere with the judicial or quasi judicial functions entrusted to the various functionaries under a statute. The instructions and directions of the Central Board of Revenue are binding on the functionaries discharging their functions under the Ordinance in view of section 8 so long as they are confined to the administrative matters. The interpretations of any provisions of the Ordinance can be rendered judicially by the hierarchy of the forums provided for under the above provisions of the Ordinance, namely; the Income Tax Officer, Appellate Assistant Commissioner, Appellate Tribunal, the High Court and this Court, and not by the Central Board of Revenue. In this view of the matter, the interpretation placed by the Central Board of Revenue on the relevant provisions of the Ordinance in the Circular, can be treated as administrative interpretation and not judicial interpretation.
26. The views found favour in the above cases seem to be in consonance with law, particularly the view taken in the two judgments of the Sindh High Court relied upon by Mr. Nasim A. Farooqui, Advocate. We are inclined to hold that the expression "definite information" will include factual information as well as information about the existence of a bindings judgment of a. competent Court of law/forum for the purposes of section 65 of. the Ordinance, but any interpretation of a provision of law by a functionary which has not been entrusted with the functions to interpret such provision judicially, cannot be treated as a definite information. We have already pointed out hereinabove that the Central Board of Revenue does not figure in the hierarchy of the judicial forums provided for under the Ordinance and, therefore the interpretation placed by it on the relevant provisions of the Ordinance in the Circular, at the most, can be treated as an administrative interpretation and not a judicial decision to qualify for treatment as a definite information. It is, being an administrative opinion, liable to be varied/modified and,, therefore, from . its very nature, cannot be treated as a definite information. If we were to treat an administrative interpretation of a provision of law as a definite information, it will lead to uncertainty and will cause harassment to the assessees. The Central Board of Revenue may, at any time, place construction on a particular provision of the Ordinance, which may not be legally sustainable, but it will be treated by the Income Tax Officers as a definite information, for the purpose of reopening of the assessment which were competently framed long time back. We may observe that in the. present cases the construction placed by the Central Board of Revenue on the relevant provisions of the Ordinance seems to be correct, but that fact alone, will not change its character as to qualify it as a definite information to justify re-opening of assessments. At this juncture, it will be pertinent to refer to the following observations as to the status of the Central Board of Revenue's interpretation of law, made by Cornelieus, C.J. in the case of the Commissioner of Income Tax, East Pakistan, Dacca v. Noor Hussain PLD 1964 SC 657:
In the view of my learned brother Fazle Akbar, the benefit in law cannot commence from any earlier date than that of the instrument by which the firm is constituted. He has at the same time observed that the course pursued by the Board as appearing from Circular No.8, seems to be correct. In my view, if there is a departure from the law involved in the provision for relaxation contained in the Circular, then that Circular is to the extent of the deviation, invalid and ineffective and power thereunder is illegally exercised. The impression of such departure conveyed by the following passage in the Circular, viz.:---
On a strict interpretation of the law, a firm can be registered only from the date on which the partnership deed has been executed. Since, this would create hardship, the Board is disposed to agree to the benefit of registration being allowed for the full previous year, provided of course; the other conditions laid down for the registration of the firms under section 26-A are fulfilled.'
The Board's views as to the interpretation of law do not have the force of law, and the expectation would be particularly where as fiscal statute is involved which should be implemented with strict impartiality, that references to inclination towards relaxation or otherwise would have been avoided."
17. The law as laid down and the principles propounded by the Hon'ble Supreme Court of Pakistan leave no room for any doubt that the view held by this Tribunal vide judgment reported as 1995 PTD (Trib.) 1113 is binding on the C:I.T.(As)/A. A. Cs. and the instructions issued to the contrary by C. B. R, to the C.I.T.(As)/A.A.Cs. is ultra vires and in excess of jurisdiction, being violative of the law as contained in proviso to section 8 of the Income Tax Ordinance, 1979.
18. Before parting with this order we would like to state that we have been observing indiscipline on the part of C.I.T.(As) and on the part, of assessing officers as well. Several instances have come to our notice wherein the subordinate officials, have either side-tracked/avoided the judgments of the higher forum or have refused to follow them expressly. We took notice of such an incident in our order dated 5-8-1991 in I.T.A. No.951/HQ of 1990-91 and observed as follows:
"The order of this Tribunal is binding on the subordinate income-tax authorities and, therefore, we deprecate the manner in which the Commissioner of Income-tax (Appeals) has side-tracked the order of this Tribunal. We disapprove such practice on the part of subordinate income-tax authorities and expect that in future the orders passed by this Tribunal shall be properly respected and followed."
19. Another instance was brought to our notice and the above observations were cited by .us in our order, dated 15-10-1991 in I.T.A. No.864/HQ of 1990-91. We have further observed as follows:
"We would like to repeat that the tendency of erosion of authority on the part of subordinate income-tax authorities cannot be countenanced easily and it should be checked before it is too late: We, therefore direct that a copy of this order should be sent to the, learned Chairman, C.B.R. and the learned Regional Commissioner of Income-tax Southern Region, Karachi for issuing necessary directions to all the authorities concerned to show proper respect to the orders of this Tribunal as they are of binding nature on all subordinate income-tax authorities and, therefore, are required under the law to be followed."
20. It appears that no action was taken by the C.B.R. with the result that more instances of judicial misconduct and indiscipline have come into our notice. The impugned order of Mr. Farooq Amin, the learned C.I.T.(A) is not only an embodiment of the judicial indiscipline but it is contemptuous as well. However, taking the fact into consideration that the learned C.I.T.(A) is basically administrative officer and is performing a quasi-judicial function we do not propose to take any action on judicial side: It indicates lack of judicial training and, therefore, we are of the considered opinion that it is duty of the C.B.R. to see that the officers under its administrative control invested with the powers to discharge judicial functions have adequate knowledge of law, judicial training and have sense of judicial discipline. A copy of this order should be sent to the learned Chairman, Central Board of Revenue, who has himself remained to very respectable Member of this Tribunal and still commands very high G respect with the Bench and Bar both as a true judicial officer in all respects and we expect that necessary administrative action shall be taken against Mr. Farooq Amin, the learned C.I.T.(A). We further expect that the learned Chairman, C.B.R. shall impress upon all the officers under his administrative control to show the due respect to the judgments of this Tribunal which it deserves in law, in the interest of better administration of justice pertaining to the tax matters.
21. With the above observations all the appeals are allowed. All the impugned orders of learned C.I.T.(A) are hereby vacated and the appeals are remanded back to the respective C.I.T.(A) for deciding the appeals on merits.
22. Mr. Arif Muhammad Khan, leered counsel appearing for M/s. Sheikh Yousuf Ali and Sons (Pvt.) Ltd. in WTA No.221 to 225 has stated that although the enhanced appeal fee was payable by him in respect of the appeal pertaining to the assessment year 1994-95 only but on the objection of learned C.I.T.(A-II), Karachi he had deposited the enhanced appeal fee for all the years but the learned C.I.T.(A) still dismissed the appeals for non-payment of enhanced appeal fee. The impugned order of learned C.I.T.(A), Zone-II, Karachi relating to the assessment year 1994-95 is remanded back to the learned C.I.T.(A) with the direction to ascertain the statement of Mr. Arif Muhammad Khan and if the enhanced appeal fee has been paid for the assessment year 1994-95 the same may also be disposed of on merits alongwith the appeals relating to the assessment year 1990-91 up to the assessment year 1993-94 which appeals are to be governed under the unamended law
M.B.A./171/T.???????????????????????????????????????????????????????????????????????????????????? ???? Order accordingly.