ITAS NOS. 1/KB TO 11/KB, 23/KB TO 30/KB OF 1991-92, ITA NO. 1252/HQ OF 1990-91 VS ITAS NOS. 1/KB TO 11/KB, 23/KB TO 30/KB OF 1991-92, ITA NO. 1252/HQ OF 1990-91
1996 P T D (Trib.) 65
[Income-tax Appellate Tribunal Pakistan]
Before Muhammad Mujibullah Siddiqui, Chairman, Abdul Malik S.M. Sibtain,
Asad Arif, Accountant Members and Tahseen Ahmed Bhatti, Judicial Member
ITAs Nos. 1/KB to 11/KB, 23/KB to 30/KB of 1991-92, ITA No. 1252/HQ of 1990-91; decided on 17/09/1995.
(a) Income Tax Ordinance (XXXI of 1979)---
----Ss. 87 & 53---Advance tax---Additional tax on failure to pay advance tax-- Provision of S.87 Income Tax Ordinance, 1979 is required to be read with the provisions contained in S.53 of the said Ordinance.
(b) Income Tax Ordinance (XJXI of 1979)---
----S. 53---Payment of advance tax---History of the legislation on payment of advance tax traced.
(c) Income Tax Ordinance (XXXI of 1979)--
----Ch. VII--Assessment"---Connotation---Word "assessment" has a very wide meaning---Assessment is entire set of proceedings whereby total income of an assessee is determined and on the basis thereof the tax payable is computed and thereafter the recovery of tax is effected---Process of determining the total income, computation of tax payable and the recovery of such tax collectively and cumulatively form part of assessment.
Chapter VII of the Income Tax Ordinance, 1979 is titled as "assessment" and is comprising sections 55 to 67. Chapter VII contains the procedural provisions in respect of assessment. The process starts with the filing of return of total income under section 55 and ends with section 67, which has provided for reference to valuers and has conferred authority on C.B.R for making rules to give effect to the provisions of section 67. Section 62 provides that the Deputy Commissioner of Income-tax, after considering the evidence on record, shall by an order in writing, assess the total income of the assessee and determine the tax payable by him on the basis of such assessment. Section 67 has provided that where in the course of any "assessment proceedings" the Deputy Commissioner is of the opinion that the value of any capital asset shown in any return, statement or other document furnished by an assessee is not correct he may, either on an application by the assessee or otherwise, refer the matter to a valuer for ascertaining the proper value of such asset. These provisions indicate that the assessment is entire set of proceedings whereby total income of an assessee is determined and on the basis thereof the tax payable is computed and thereafter the recovery of tax is effected Thus, process of determining the total income, computation of the tax payable and the recovery of such tax collectively and cumulatively form part of assessment The tax has been defined in section 2(43) of the Income Tax Ordinance to mean income-tax, super-tax, surcharge and additional tax chargeable or payable under the Ordinance and includes any penalty, or other charge or any sum or amount leviable or payable under the Ordinance.
The word "assessment" has a very wide meaning.
C.I.T. v. Khemchand Ramdas (1938) 6 ITR 414; Lakshaman Shenoy v. I.T.O. Ernakulam (1958) 34 ITR 275; CA. Ibrahim v. I.T.O. Kottayam (1961) 41 ITR 425; Bhai Lal Amin and Sons Limited v. R.K. Dalal (1953) 24 ITR 229 and Kalawati Devi Harlalka v. C.I.T. West Bengal (1967) 66 TTR 680 ref.
(d) Income Tax Ordinance (XXXI of 1979)---
----Ss. 53 & 87---Advance tax---Additional tax---Payment of advance tax under s.53 of the income Tax Ordinance, 1979 and the levy of additional tax under g.87 of the Ordinance u' case of default is part of assessment.
A perusal of subsection (3) of section 53 of Income Tax Ordinance, 1979 shows that any sum paid under subsection (1) or subsection (2) shall be treated as an advance payment of tax in respect of the assessment year commencing on the first day of July next following the financial year in which it is paid and that credit therefor shall be allowed to the assessee in computing the tax payable by h~ for the said assessment year. It is thus quite clear that the advance tax received from an assessee shall be taken into consideration in computing the tax payable by assessee and the computation of tax payable is made during the process of assessment and finally while computing the assessment. Thus by virtue of the provisions contained in subsection (3) of section 53 the payment of advance tax becomes a part of the process of assessment. The additional tax levied under subsections (1) and (2) of section 87, of the Income Tax Ordinance, 1979 cannot be imposed without considering the facts and law necessary for attracting the provisions contained in subsections (1) and (2) of section 53. For the purpose of levying additional tax under section 87 the provisions contained in subsections (1) and (2) of section 53 are required to be considered without which it cannot be decided if the additional tax is liable to be paid or not and thus by levying additional tax under section 87 the provisions contained in section 87 and section 53 are to be read together. The result is that the provisions contained in section 53 and section 87 not only create a liability on the part of an assessee and thus becoming a part of the process of assessment but in fact the provisions contained in these two sections are so integrated with the process of assessment that without making them a part of the process of assessment the ' real tax liability of an assessee cannot be determined and ascertained. Held payment of advance tax under section 53 of the Ordinance and levy of additional tax under section 87 in case of default is, therefore, part of the process of assessment.
(e) Income Tax Ordinance (XXXI of 1979)---
----Ss. 53, 87 & 62---Advance tax---Advance tax required to be paid by an assessee and in the case of default additional tax payable by him is to be calculated and imposed at the time of completion of assessment---Deputy Commissioner shall, by an order in writing, assess the total income of the assessee and determine the tax payable by him on the basis of such assessment---Order under S.87, Income Tax Ordinance, 1979 is required to be made either before the completion of assessment or at the most at the time of completion of assessment.
Under subsection (3) of section 53 of the income Tax Ordinance, 1979 the credit for advance tax is required to be given in computing the tax payable by him for the relevant assessment year. It is provided in subsection (2) of section 53 that an assessee who is required to make payment of advance tax under subsection (1) may estimate at any time before the last instalment is due that the tax payable by him for the relevant assessment year is likely to be less than the amount he is required to pay under subsection (1) and thereafter pay the advance tax according to his estimate. A further restriction is placed under subsection (2) of section 87 of the Income Tax Ordinance, 1979 that if the tax so paid on estimate basis is less than 80% of the tax chargeable for the relevant assessment year, he shall be liable to pay additional tax on the amount by which the tax paid by him falls short of the said 80% and such additional tax shall be calculated from the first day of April in that year to the date on which assessment is made or the thirtieth day of June of the financial year next following whichever is earlier. Now both these provisions are to be read together, and the provisions are so inter-connected and integrated that without reading the two provisions together it is not possible to ascertain the advance tax liability on estimate basis. It becomes abundantly clear that all this exercise is to be done at the time of completion of assessment. When the expression "and credit therefor shall be allowed to the assessee in computing the tax payable by him for the said assessment year" and the expression "any assessee fails to pay tax under subsection (2) of section 53 or the tax so paid is less than 80% of the tax chargeable for the relevant assessment year" clearly indicate that notwithstanding the omission of word "regular assessment" when compared with section 18-A(8) of the repealed Income Tax Act, 1922, the intention of the Legislative is very clear that even under the Income Tax Ordinance, 1979 the advance tax required to be paid by an assessee and in the case of default additional tax payable by him is to be calculated and imposed at the time of completion of assessment. Thus on reading all the relevant provisions contained in the Income Tax Ordinance, 1979 including section 62 which requires that the Deputy Commissioner shall by an order in writing assess the total income of the assessee and determine the tax payable by him on the basis of such assessment, an order under section 87 is required to be made either before the completion of assessment or at the most at the time of completion of assessment.
(f) Income Tax Ordinance (XXXI of 1979)---
----Ss. 53, 87 & 129---Advance tax---Additional tax on failure to pay advance tax---Appeal---Appellate Assistant Commissioner ---Assessee has the right under S.129, Income Tax Ordinance, 1979 to file an appeal against all and every part of the assessment order without any reservations and conditions---If an order under S.87, Income Tax Ordinance, 1979 is treated part of the assessment order it automatically becomes appealable.
With the promulgation of section 129 of the Income Tax Ordinance, 1979 the assessee has the right to file an appeal against all and every part of the assessment order without any reservations and conditions and if an order under section 87 is treated as part of the assessment order it automatically becomes appealable. An order under section 87 is actually a part of the assessment order and thus it becomes appealable if it is made alongwith the main assessment order.
(g) Income Tax Ordinance (XXXI of 1979)---
----Ss. 53, 87 & 156---C.B.R. Circular No.4 of 1979, dated 23rd August 1979-- Advance tax---Additional tax on failure to pay advance tax---Rectification of mistake---Although issue relating to levy of additional tax under S.87, Income Tax Ordinance, 1979 should be decided at the time of making the assessment order, if however, at that stage such order is not made it will be deemed to be a mistake apparent on record and such order can be made subsequently by having recourse to the provision of 5.156, Income Tax Ordinance, 1979 by way of rectification of mistake.
V.N.S. Sockalingam Chettiar and others v. I.T.O. (1959) 36 ITR 451 and I.T.O. Alwaye v. Asoka Textiles Limited (1961) 3 Tax 303 ref.
(h) Income Tax Ordinance (XXXI of 1979)---
----Ss. 53, 87 & 129---Advance tax---Additional tax for failure to pay advance tax ---Appeal---Assessee has a right of appeal -if additional tax is levied under S.87, Income Tax Ordinance, 1979, when such an order is made with the main assessment order---Such right of appeal, however, cannot be left at the discretion or volition of an Assessing Officer by making a separate order under S.87 of the Ordinance---Order of Additional tax under S.87, whether made at the time of completion of assessment or otherwise after the completion of assessment by way of rectification is appealable.
There is no room for any argument that assessee has no right of appeal against an order under section 87 of the Income Tax Ordinance, 1979, because said section is not specifically mentioned in section 129 of the Income Tax Ordinance, 1979 conferring the right of appeal on an assessee. Right of appeal is a valuable right and is not merely a procedural right but it is substantive right as well and, therefore, the right of appeal is available to an assessee if additional tax is levied under section 87 when such an order is made with the main assessment order, it cannot be left at the discretion or volition of an assessing officer to provide this right to an assessee or deny tire same by making a separate order under section 87. In the present case the main plank of argument against the right of appeal has been that under section 129 no such right has been conferred. In view of Circular No.4 of 1979, dated August 23, 1979 by the C.B.R., this argument should not be available to the department.
A perusal of the said circular shows that even the C.B.R. is of the view that merely because a particular -section is not mentioned in section 129 it would not be sufficient per se to deprive an assessee from the right of appeal if a particular order actually falls within the purview of another order which is appealable. If the C.B.R. is of the view that an order under section 84 though not mentioned in section 129 is still appealable being a part of order under sections 62 and 63 there is no reason why an order under section 87 should not be appealable which is part of the assessment order whether made at the time of completion of assessment or otherwise after the completion of assessment by way of rectification.
Inland Navigation Co. Ltd. v. I.T.O. (1967) 16 Tax 1; Shantilal Rawji 34 ITR 439; Hasan Ali Karabhai v. C.I.T. PLD 1974 Kar. 473 and C.I.T. Central Zone-B v. Esso Pak Fertilizer Limited (1990) PTD 787 ref.
1985 PTD 324 and (1991) PTD 663 mentioned.
Basharatullah Khan, D.R. for Appellants/Respondents.
I.N. Pasha, Rehan Hasan Naqvi and Farogh Nasim for Respondents/Appellants.
Date of hearing: 14th June, 1995.
ORDER
This Larger Bench has been constituted to decide the following questions---
"Whether any order under section 87 is appealable under any circumstances."
2. The question which we have been called upon to decide is probably the most controversial question of law in the realm of taxing laws in the Indo -Pakistan Sub-continent. Section 87 of the Income Tax Ordinance, 1979 corresponds to section 18-A(6) and (8) of the repealed Income-tax Act, 1922 and section 215 and section 217 of the Indian Income Tax Act, 1961. We will presently see that there are some variations in the language of the above provisions of law and the effect thereof shall also be considered in the context of controversy under consideration. Section 87 of the Income Tax Ordinance, 1979 and other corresponding provisions contained in the repealed Income-tax Act, 1922 and the Indian Income Tax Act, 1961 are required to be read with the provisions contained in section 53 of the Income Tax Ordinance, 1979 which correspond to section 18-A (1), (2) and (3) of the repealed Income-tax Act, 1922 and sections 207 to 212 of the Indian Income Tax Act, 1961 which l deal with the payment of advance tax. It would be proper for the sake of convenience to give brief history of the legislation of advance tax. At the time of enactment of the repealed Income-tax Act, 1922 wherein provisions were made for filing of appeals there was no provision for payment of advance tax which is popularly called the concept of "pay as you earn". The provision for advance tax was introduced for the first time in the year 1944. The legislature by enacting section 18-A of the Income-tax Act, 1922 made the provision for imposing a liability upon the taxpayers who had been previously assessee and even upon those who had not been assessed to make advance payment of tax in respect of income exceeding certain amount. The provision was' in fact introduced as war measure to combat inflation and withdraw some of the money in circulation but like many other innovations in taxation legislation it has outlived the exigency which necessitated it. This provision engrafted a very important exception to the general rule that tax shall be charged for each assessment year on the total income of the previous year. As already observed the basis of advance tax was the principle of pay as you earn, i.e., paying tax by instalments in respect of the income of the very year in which the tax is paid. The income of the previous year was taken at an estimate equivalent to the income of the latest assessed previous year, or as estimated by the assessee (where he expected it to be less) and the tax was collected during the course of the current year. The amount so collected was adjusted against the final demand when the regular assessment was made. In the initial stages the amount paid was placed on par with a deposit carrying interest but subsequently the position changed and it was treated as advance payment of tax. Provisions were made for the levy of additional tax in case of default on the part of assessees. As we have stated the provisions of advance tax in the Indian sub-continent was introduced as a war measure and, therefore, it appears to us that initially it was not intended to be retained as permanent feature of the Income-tax Law and, therefore, while enacting provision for imposing of advance tax in the case of default on the part of assessee and other allied provisions no corresponding amendments were made in the provision relating to the right of appeal to an assessee. It is also possible that at the time of engrafting an exception to the general rule as observed earlier the various issues likely to be cropped up, consequences thereof and the intricacies to be arising were not visualized and thus it gave rise to a most controversial issue in the realm of procedural law relating to the right of appeal which by now has been accepted as a substantive right of an assessee as well. We will presently show that the superior Courts particularly in India have observed in a large number of judgments that the legislature should consider for providing a specific right of appeal in respect of the levy of advance tax/penal interest on account of alleged default on the part of assessees: However, no such amendment was made either in India or in Pakistan so long the repealed Income-tax Act, 1922 remained in force. The Income-tax Act, 1922 was repealed in India in 1961 and in Pakistan in 1979. The provision relating to appeal before the AA.C./C.I.T.(A) is contained in section 30 of the repealed Income-tax Act, 1922 which corresponds to section 246 of the Indian Income tax Act, 1961 and section 129 of the Income Tax Ordinance, 1979. No significant departure has been made in India while enacting section 246 of the Indian Income Tax Act, 1961 provisions whereof are almost similar to the provisions contained in section 30 of the repealed Income-tax Act, 1922 while we will presently show that a significant and important departure has been made while enacting section 129 of the Income Tax Ordinance, 1979 in Pakistan. As already observed the issue in controversy came for consideration before superior Courts in Pakistan in very few cases while it came for consideration before the superior Courts in India in very large number of cases and divergent views have been given by the different High Courts in India. All the High Courts in India have unanimity of view on the point that a right of appeal is a creature of the statute and there can be no right of appeal unless it is conferred by statute. However, the High Courts in India have construed the language or provision conferring the right of appeal in such a divergent ways that it becomes very difficult to reconcile them.
3. Before we embark on considering the development of the statute law as well as the case-law on the point it would be appropriate to reproduce the relevant provisions in the Income Tax Ordinance, 1979, the repealed Income Tax Act, 1922 and the Indian Income Tax Act, 1961.
4. The relevant provision in section 30 of the repealed Income Tax Act, 1922 read as follows:--
"Section 30 of Income Tax Act. 1922.--- Any assessee objecting to the amount of income assessed under section 23 or the amount of loss computed under section 24 or the amount, of tax determined under section 23; or denying his liability to be assess this Act of objecting to his assessment being made under subsection - (4) of section 23 or objecting to the cancellation by an I.T.O. of the registration of a firm under subsection (4) of section 23 or subsection (4) of section 26-A or to a refusal to register a firm under subsection (4) of section 23 or section 26-A, or objecting to any order under subsection (2) or section 25 or section 25-A or subsection (2) of section 26 or section 28 made by an I.T.O. or objecting to any penalty imposed by an I.T.O: under subsection (6) of section 44-B or subsection (5) of section 44-F or subsection (1) of section 46, or objecting to a refusal of an I.T.O. to allow a claim to a refund under section 48, or. 49-F or to the amount of the refund allowed by the I.T.O. under any of those sections may appeal to the Appellate Assistant Commissioner, against the assessment or against such refusal or order."
5. The relevant provision contained in subsection (1) of section 129 of the Income Tax Ordinance, 1979 reads as follows:--
"Section 129 of the Income Tax Ordinance 1979.---Appeal to the Appellate Additional Commissioner.---(1) Any assessee objecting to an order made by Deputy Commissioner under section 59 or 59-A (where any adjustment has been made under subsection (3) of subsection (2), respectively, of those sections), 62, 63, 65, 68, 75, 80 80-A, 91, 98, 99, 105 to 112 (inclusive), 114 or subsection (2) of section 148, or an order under section 52, treating a person to be an assessee in default, or an order under section 78, treating the assessee as an agent of a non-resident, or an order under section 156 refusing to rectify the mistake, either in full or in part, as claimed by the assessee or having the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the assessee may appeal to the Appellate Additional Commissioner against such order.
(2) No appeal under subsection (1) shall lie against any order of assessment unless the tax payable under section 54 and not less than fifteen per cent. of the amount of tax assessed has been paid."
6. The relevant provision in the Indian Income Tax Act is contained in clause (c) of subsection (1) of section 246 which reads as follows:--
"Section 246(-1),(c) of the Indian Income Tax Act. 1961.
Appealable -orders.--(1) Subject to the provisions of subsection (2), any assessee aggrieved by any of the following orders of an Income Tax Officer-may appeal to the Appellate Assistant Commissioner against such order--
(a)
(b)
(c) An order against the assessee, where the assessee denies has liability to be assessed under subsection (3) of section 143 or section 144, where the assessee objects to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed or to the status under which he is assessed."
7. The Delhi High Court in the case of C.I.T. Delhi v. Mahabir Parshad & Sons (1980) 125 ITR 165 has examined various decisions in India by different High Courts upto the year 1980. The Honourable Judges of Delhi High Court have observed as follows:--
"Sometimes in income-tax matters as in other branches of law a considerable amount of judicial time is consumed in resolving a purely procedural wrangle. Thus, under the Indian Income-tax Act, 1922 as well as its successor Act of 1961 the question as to how far an order charging interest is appealable to the Appellate Assistant Commissioner and then to the Appellate Tribunal has engaged considerable attention of the Courts and an attempt at legislative clarification has really not solved the problem."
8. In the case under consideration before the Delhi High Court, the Tribunal came to the conclusion that it was open to an assessee to object to the levy of penal interest in the course of its appeal against the assessment order under the provisions of section 246(c). It was further held that the levy of interest was an integral part of the process of assessment and that, therefore, the assessee can deny its liability to be assessed in respect of the item of interest under section 246(c): Reference was made to a decision of the Bombay High Court reported as (1955) 27 ITR 192 wherein it was held that in an appeal against the regular assessment it should be open to the assessee to take all points which may legitimately reduce not only the taxable income or the tax under the proper head of assessment but also reduce the quantum of penal interest. The Honourable Judges of the Delhi High Court while considering the issue observed that in the earlier decisions tile interest charged on account of default in payment of advance tax has been referred as penal interest while it was not known how this phrase got into the dialect of income-tax law as there was no element of penalty in it and it was just interest for non-payment of an amount at the prescribed time. Reference in this behalf was made to the judgment of Madras High Court in the case reported as (1958) 34 ITR 583.
9. While examining various decisions from the Indian High Courts the view held by the Allahabad High Court was examined. The issue came for consideration before the Allahabad High Court for the first time in the case reported as (1953) 23 ITR 226. It was in respect of an appeal against the separate order charging interest and it was held that section 30 of the 1922 Act gave no right of appeal against such an order. The same view was confirmed by the Allahabad High Court in subsequent decisions including the decisions in Seth Benarsi Das Gupta v. C.I.T. (1977) 107 ITR 368, Vidyapat Singhania v. C.I.T, (1977) 107 ITR 533, Ramchand and Sons Sugar Mills Ltd. v. C.I.T. (1977) 107 ITR 539, Additional C.I.T. v. Allahabad Milling Co. (1978) 111 ITR 111 and Meva Lal v. C.I.T. (1979) 117 ITR 598. All these decisions were considered by a Full Bench of Allahabad in C.I.T. v. Geeta Ram Kali Ram (1980) 121 ITR 708. It was held by the Full Bench of Allahabad High Court that the first part of section 246(c) of the Income Tax Act, 1961 does not enable an assessee to raise a ground in the assessment appeal relating to the question of penal interest. For the sake of brevity all the judgments by the Allahabad High Court are not being considered by us but in order to show that the judicial view has undergone a change we refer to the following passage from the judgment of Allahabad High Court in the case of Vidyapat Singhania case (1977) 107 ITR 533:--
"Even if penal interest is a part of tax it would be said that the assessee denies his liability to be assessed under the Act, because he objects to the levy of penal interest only and not to the amount of tax determined under section 23. So it is not possible to spell out a right of appeal even by virtue of the clause denying his liability to be assessed under the Act occurring in section 30 of the Act:"
10. Thus, the view of Allahabad High Court was that there was no right of appeal available to an assessee in respect of the levy or additional tax/penal interest separately or as a part of appeal against the regular assessment. Thus, the view of Allahabad High Court was that no right of appeal under any arc stances was available to an assessee for filing of appeal against the levy of additional tax/penal interest imposed under sections 18-A(6) and (8) of the Income-tax Act, 1922 and under the corresponding provision in Indian Income Tax Act, 1961. However, Full Bench of the Allahabad High Court in the case of C.I.T. v. Geeta Ram Kali Ram (1980) 121 ITR 708 inasmuch has opened the door of appeal except in case where the mere quantum of penal interest was involved. Reliance for this purpose was placed on Full Bench decision of the Bombay High Court. The Full Bench .of Allahabad High Court held as follows:--
"In the Daimler Benz's case (1977) 108 ITR 961, the Full Bench of the Bombay High Court mentioned five instances which would be covered under the denial clause, namely:--
(a) an assessee contending that he is not within the ambit of the Act at all; for instance, a non-resident,
(b) an assessee, though falling within the ambit of the Act, contending that his income sought to be assessed is not chargeable at all; for instance, agricultural income,
(c) an assessee having chargeable income, but contending that the same falls to be assessed under one and not the other head; for instance, when he receives an income from the house property but contends that the same is not liable to be taxed under the head `Income from property' but is liable to be taxed under the head `Business income' or vice versa,
(d) an assessee may accept a particular head of income but denies the source of that income; for instance, when he contends that he has income from business but contends that such income is from "A" business and not from "B" business, and
(e) an assessee contending that part of the income from a particular business is not assessable.
In our view, cases mentioned in (a) and (b) alone are appealable under the denial clause. Cases mentioned in categories (c), (d) and (e) are also appealable, but against the regular assessment under the clause relating to assessment of income or computation of tax.
The upshot of all the discussion is that on all the aforesaid grounds of objections, an appeal lies though some grounds only are open under the denial clause while other grounds are available in appeal against the regular assessment. It is well-settled that mention of 'a wrong provision in a memorandum of appeal is not fatal to the maintainability of an appeal. The substance of the matter counts. All the aforesaid grounds of objection can be taken in an appeal. But none of these categories cover the ground relating to the quantum of penal interest."
11. The Gujarat High Court considered the view in the decisions reported as (1975) 100 ITR 603 and (1978) 114 ITR 197. The Gujarat High Court also took a view that no appeal lies against an order levying penal interest under section 215 or section 217 of the Indian Income Tax Act, 1961 if in the appeal the assessee merely challenges the quantum of penal interest. However, the Gujarat High Court took the view that if the assessee denies his liability to penal interest on the ground that he was not liable to pay advance tax at all in the case of levy of penal interest, it would be open to him to challenge the order levying the penal interest because in such eventuality he would be challenging-his liability to be assessed and would be denying his liability to be assessed at all to penal interest.
12. In the Bombay High Court the question came for consideration in the case of Jagdish Prasad Ramnath (1955) 27 ITR 192 which was a case of appeal against an order charging interest and not an assessment order. Chagla, CJ held that the appeal could not lie but pointed out that the assessee could obtain adequate relief in the assessment appeal. Subsequently, the Bombay High Court rendered two decisions in Keshardeo Shrinivas Morarka v. C.I.T. (1963) 48 ITR 404 and Mathurandas B. Mohta v. C.I.T. (1965) 56 ITR 269 which were inconsistent with each other. In the former decision it was held that no appeal would lie against the levy of penal interest if it was correctly computed, the latter decision took the view that interest was part of the tax and that an appeal against the levy of interest could be maintained under the head of "denial of liability to be assessed". The conflict between the two decisions was resolved in Daimler's case (1977) 108 ITR 961 on which reliance was placed by the Full Bench of Allahabad High Court referred supra. As already observed, by this Full Bench judgment Bombay High Court held that there would be right of appeal only in respect of matters implicit in resorting to the provisions charging interest but not in regard to the computation of interest. The same view was reiterated by the Bombay High Court in C.I.T. v. Gannon Dunkerlay and Co. (1979) 119 ITR 595.
13. The Andhra Pradesh High Court in the judgment reported as (1955) 28 TTR 156 and the Gauhati High Court in the judgment reported as (1976) 103 ITR 505 took the view that the order levying interest was not appealable because section 246 conferred a right of appeal against order of assessment under subsection (3) of section 143 or section 144 and in respect of penal interest levied under section 201 and 216 only.
14. The Karnataka High Court took a more liberal view in the case of National Products v. C.I.T. (1977) 108 ITR 835 and interpreted the expression "denying his liability to be assessed" used in section 246(c) of the Indian Income Tax Act, 1961 to mean that where penal interest has been levied under section 215 the assessee may all together deny his liability to pay such interest on the ground that he was not liable to pay advance tax at all or that the amount of advance tax determined by the I.T.O. as payable ought to be reduced. However, it was held that the scope of appeal against the order of assessment levying interest is limited. The assessee can be allowed only to urge that he is not liable wholly or partially to be assessed to interest. He cannot question the interest assessed if he does not deny his liability to be assessed to such interest. The Calcutta High Court also took a wider view in C.I.T. v. Lalit Prasad Rohini Kumar (1979) 117 ITR 603. The Calcutta High Court agreed with the decision of Bombay High Court in Daaimler's case (1977) 108 ITR 961'and with the Karnataka High Court in National Products case (1977) 108 ITR 935. The Calcutta High Court further held by placing reliance on the judgment of Supreme Court of India in Kanpur Coal Syndicate case (1964) 53 TTR 225 that once the liability to be charged interest is validly challenged, the AA.C would have the same powers as the I.T.O. and could, in an appropriate case, give directions about the quantum of interest charged and also about the reduction or waiver thereof. Thus, it will be seen that the Calcutta High Court further enlarged the scope of appeal whereby the AA.C was empowered to give directions about the quantum of interest charged as well.
15. The Madras High Court in the judgment reported as (1968) 70 ITR 863 held that there was no appeal against an order levying interest under section 18-A(6) of the Income Tax Act, 1922 but a revision to the Commissioner was available. However, in a subsequent judgment reported as (1978) 114 ITR 847 the Madras High Court changed its view and held that though no appeal would lie against the imposition of penal interest alone the levy' of penal interest could also be challenged in an appeal filed against an assessment.
16. A resume of the above case-law upto 1980 in India shows that initially Allahabad High Court took a view that no right of appeal was available to an assessee in respect of additional tax/penal interest levied under section 18-A 'and the Andhra Pradesh High Court, Gauhati High Court and the Madras High Court also followed the same view but subsequently a consensus of opinion of various High Courts took place in favour of limited right of appeal on the question of interest. The gist of the view held by various High Courts in India was that if the assessee was seeking a reduction in the quantum of interest it could not be agitated an appeal but if the assessee was challenging some of the conditions precedent for the levy of interest such grounds could be taken in appeal preferred against the assessment.
17. The Delhi High Court after referring various judgments of the different High Court in India examined the issue from another angle in the case reported as (1980) 125 ITR 165. The Delhi High Court 4n this judgment came to the conclusion that an assessee can raise the question of leviability of interest as well as its quantum in appeal. However, it was held that the question of leviability of the interest as well as its quantum can be raised from the order of assessment though an appeal may not lie against the separate order levying interest and nothing more. The Delhi High Court held as follows:--
"After a careful consideration of these various decisions and on a perusal of section 246 of the I.T. Act, 1961, we think that the question of issue can be decided on a consideration not of the first limb of section 246(c) but of the second limb of this clause. Section 246 starts by saying that any assessee aggrieved by any of the orders mentioned therein of an I.T.O. may appeal to the AA.C against such order. Clause (c) refers to two such orders. One is an order against the assessee, where the assessee denies his liability to be assessed under the Act. All the decisions have concentrated on this part of the above clause. Understandably, there has been no unanimity as to how far a right of appeal against interest can be fitted into the narrow phraseology and it does seem difficult to say on this part of the clause that an assessee could appeal against the quantum of interest or plead his case for reduction or waiver of its quantum. But the clause also contemplates an appeal from another type of order, i.e., any order of assessment under section 143(3) or section 144 where the assessee objects to the amount of income assessed or to the amount of tax determined or to the amount of loss computed of the status under which he is assessed. We find that the true scope of this part of the clause has not been considered by any of the decisions. Even where a passing reference is made to this part of the clause, it has been assumed that the only grounds which would be raised in appeal against an order of assessment are objections regarding (a) the amount of income assessed; (b) the amount of tax determined; (c) the amount of loss computed; or (d) the status of assessment. It has been assumed that since an objection to the levy of interest does not fall within these four categories, it is not covered by this part of the clause. We think that this interpretation proceeds on a narrow and unjustified impression regarding the scope of this clause. What this part of the clause provides is for an appeal by the assessee to the A.A.C. against any order of assessment. The qualifying words setting out the four categories are only to indicate the conditions precedent for the filing of an appeal. The object is that a purely academic appeal should be avoided. That is why the clause says that a person can appeal against an order of assessment only where he has a real grievance there against, such grievance being in relation to income, tax, loss or status. But we think that when the clause says that an appeal can be preferred against an order of assessment where, the, assessee is aggrieved by determination in respect of these four matters it does not also mean that the grounds for consideration in all such appeals can only be in regard to these four matters. To say that an appeal cannot be preferred unless the assessee objects to the income, tax, loss or status does not mean that even where he has such a grievance and he prefers an appeal because of such grievance, the scope of the appeal is limited to these four subject-matters. We say this because what the r clause envisages, where one of four grievances exists, is an appeal against the order of assessment. In these words, once these grievances are there, what is before the A.A.C. for consideration is the order of assessment. We are unable to see any word in this clause, which limits the scope of the arguments of the petitioner or the grounds, which he can take before the AA.C only to these four matters. We shall only give a few illustrations. Suppose an assessment is made under section 143(3) and the assessee has, in addition to various objections regarding the quantum, also raised a point in regard to a claim of bad debt that though the I.T.O. may have been right in disallowing the debt in the particular year, his finding that it had become bad several years ago is incorrect and that if at all, it had become bad only in the immediately preceding assessment year. Or, again, suppose the assessee objects to a finding given by the officer that a cash credit was assessable, not in the previous year, but in some particular earlier year. Similarly, there could be a case where the I.T.O. computes a loss but refuses the right to the assessee to carry it forward and set it off in future years. These would be all grounds not covered by the enumerated grievances of section 246(c). But since the appeal is against the order of assessment, can it be said that the assessee is not within his rights in raising the above grounds? Again, let us assume that while completing the assessment under section 143(3), the I.T.O. makes an addition and in the course of the assessment order he makes certain observations in regard to the particular head of addition which might directly land the assessee into penalty or a prosecution, can it be said that, where a valid appeal is presented against the assessment order, it will not be open to the assessee to challenge and seek expunction of the observations merely because they may have no direct impact on income, tax, loss or status. We think not. To us it appears that what section 246 authorises is an appeal from the order of assessment; such an appeal no doubt cannot be filed unless one of the four specified items of grievances exists, but where these grievances are there and a valid appeal is preferred, the scope of the appeal is co-extensive with the scope of assessment order. It is open to the assessee to contest before the AA.C every one of the findings, observations and directions' of the I.T.O. contained in the assessment order. When the Act confers a right of appeal against an order of assessment, we are unable to see on what principle the scope of that appeal could be restricted only to the four items mentioned in cl.(c) which are intended merely to ensure that the appeal preferred against the order of assessment is not purely academic or frivolous.
The matter can also be looked at from another angle. In a case where an assessee is aggrieved by the order of assessment in one of the four ways set out in clause (c) and prefers an appeal to the AA.C., it is well-settled that the powers of the A.A.C are not restricted to the grounds taken by the assessee in appeal before him. It has now been settled by several decisions starting with Narrondas Manordass (1957) 31 ITR 909 (Bom.) and including the decisions of the Supreme Court in McMillan & Co. (1958) 33 ITR 182 (SC), Shapoarji Pallanji (1962) 44 ITR 891(SC), Kanpur Coal Syndicate (1964) 53 ITR 225 (SC) and Hardutroy Chamaria (1967) 66 ITR 443 (SC), that in disposing of an appeal before him, the AA.C can travel over the entire range of the assessment order. He can bring in for assessment sources, which have been considered or processed by the I.T.O. even though the I.T.O. might have failed to bring them to tax. In other words the powers of the AA.C in disposing of an appeal are very wide and plenary, wider even than those of the Tribunal. It is open to him to consider every aspect of the assessment order and given appropriate relief or direction. In this view again there is, in our opinion, no restriction that can be placed on the powers of the AA.C to deal with the question of interest. For example, suppose an I.T.O. in a particular case has charged less interest than should have been charged under the section having applied, let us say, a smaller rate, by mistake, or taken a shorter period into account due to some oversight. There can be no doubt that the AA.C. is at complete liberty to consider these matters and to enhance the interest suitably when the matter goes up in appeal before him. This being so, it would not be correct, in our opinion, to restrict the grounds which could be raised by an assessee before the AA.C. Particularly when the statutory language does not warrant any such restriction If the AA.C has powers to consider and increase the quantum of interest, there is no reason why it should not be open to an assessee to bring to the notice of the AA.C. parts of the assessment order which have resulted in the charging of interest and pointing out that it is wrong for one reason or the other.
We entirely agree that a right of appeal is a creature of statute and there can be no right of appeal unless it is conferred by the statute. But the language of a provision conferring the right of appeal should be liberally construed. That apart, for the reasons discussed above, we think that the language of the second part of section 246(c) is wide enough to lead itself to a reasonable and plausible construction which permits the agitation of the issue of interest in a valid and competent appeal from the order of assessment though an appeal may not lie against a separate order levying interest and nothing more. As pointed out already, in the present case, the assessee had presented before the AA.C an appeal raising several contentions in regard to the disallowances and additions made in the assessment. There was, therefore, a valid and competent appeal before the A.A.C. In our opinion, in such an appeal, it was open to the assessee to raise the question of the leviability of interest as well as its quantum.
For the above reasons, we are of opinion that the Tribunal took the correct view in the matter. We, therefore, answer the question which is referred to us in the affirmative, and in favour of the assessee."
18. While reviewing the case-law from Indian jurisdiction upto 1980 we have referred to the Full Bench decision of the Bombay High Court in Daimler's case (1977) 108 TTR 961. In this judgment a marked departure has been made from the earlier view of the Bombay High Court starting with the judgment of Chagla, C.J. in Jagdish Prashad Ramnath case (1955) 27 ITR 192. In this case following question was referred to the Bombay High Court:--
"Whether on the facts and in the circumstances of the case an appeal to the Appellate Assistant Commissioner of Income-tax against the levy of penal interest was competent?"
19. In this case the Income Tax Officer charged penal interest under section 18-A (8) of the Income Tax Act, 1922. The assessee preferred appeal against charging of penal interest under section 18-A (8) to the A.A.C. who refused to entertain the appeal on the ground that no appeal was provided in the Act against the levy of penal interest. The assessee carried the matter in further appeal to the Appellate Tribunal and the Tribunal relying upon the decision of Bombay High Court reported as (1965) 56 ITR 269 took the view that the position taken up by the A.A.C. was untenable. The Tribunal held that the ratio of that decision was that the amount of interest determined under section 18-A (8) was a tax within the meaning of the Act and that the assessee would have a right to file an appeal to the A.A.C. against an order under section 18-A(8) by virtue of the clause "denying his liability to be assessed under this Act" occurring in section 30 and that though the decision related to interest charged under section 18-A(8) the ratio thereof was quite wide to cover the case under section 18-A(6). The Tribunal accordingly set, aside the order of the AA.C and directed him to dispose of the contention of the assessee on merits denovo. The Full Bench of the Bombay High Court after considering the earlier decisions of the Bombay High Court starting from Jagdish Prashad case (1955) 27 ITR 192 and from various High Courts in India held as follows:--
"Having regard to the aforesaid discussion and the decided cases it appears to us clear that the correct position would be that the assessee will have no right of appeal to the A.A.C. merely against the quantum of penal interest charged, that is to say, merely for the purpose of raising a contention that interest charged is excessive or should be reduced or should have been waived altogether but an appeal would lie to the A.A.C. if he were to deny altogether the liability to pay such interest on the ground that he is not liable to pay advance tax at all or that the amount of advance tax determined as payable by the I.T.O. is not correct. In the instant case before us there is no doubt that the assessee had preferred an appeal to the A.A.C. in which the principal ground of attack against the charge of penal interest levied against it was that the assessee company being a non-resident company was not liable to be assessed to advance tax at all inasmuch as its income was under one or the other head falling under section 18 of the Act and was outside the purview of section 18A of the Act. In other words it was a clear case of an assessee "denying its liability to be assessed under this Act" and as such the appeal to the AA.C was competent under section 30(1) of the 1922 Act. The Tribunal's view was, therefore, correct."
20. A perusal of the above finding of the Full Bench of Bombay High Court shows that while Chagle, C.J. held in the case of Jagdish Parshad Ramnath (1955) 27 ITR 192 that an assessee can raise objection to the imposing of penal interest under section 18-A (6) or 18-A (8) of the Income-tax Act, 1922 if appeal was preferred against the main assessment order and no appeal shall lie to AA.C. assailing the levy of penal interest only. In the judgment under consideration the Full Bench extended the scope of appeal against the order for levy of penal interest alone as well.
21. In a recent case decided by Delhi High Court Taylor Instrument Co. C.I.T. (1992) 198 ITR 1 following question was considered:--
"Whether in the facts and in the circumstances of the case the Tribunal was right in holding that no appeal lay to the A.A.C. against charge of interest under section 217 of the Income Tax Act, 1961?"
22. The Delhi High Court while placing reliance on the decision of Supreme Court of India in the case of Central Provinces Manganese Ore Co. Ltd. v. C.I.T. (1986) 160 ITR 961 wherein a pela was accepted that the contention that no default in the payment of. Advance- tax was there and, therefore, interest was not liable to be imposed can be agitated in appeal before the AA.C. held that to this limited extent the imposition of interest under section 217 of the Act can be challenged. In the case of Central Provinces Manganes Ore Co. Ltd. referred to above the Supreme Court of India held that the levy of interest was a part of the process of assessment and thus it was open to an assessee to dispute the levy in appeal. In another case by the Delhi High Court Caltex Oil Refining Ltd. v. C.I.T. (1994) PTD 481 - 202 ITR 375, it has been held that there is no inherent right of appeal. It is to be specifically conferred by the statute providing for an appeal. But if there is a provision conferring a right of appeal it should be read in a reasonable practical and a liberal manner. In this case a question was referred to the Delhi High Court as follows:--
"Whether on the facts and in the circumstances of the case the Tribunal was justified in law in holding that no appeal lay to the A.A.C. of Income tax against the computation of interest under section 214 made by the I.T.O."
23. It was contended before the Delhi High Court that appeal lies to the A.A.C. under clause (c) of section 246 of the Indian Income Tax Act, 1961. It was further argued that the compitation of interest under section 214 is a part of the process of assessment and that the allowance/disallowance or allowance of a lesser amount affects the assessment. As such an appeal against an order under section 214 is in fact an appeal against an order of assessment under section 143 of the Act. It was further submitted that the interest under section 214 is in fact and substance a part and parcel of the tax and has the effect of enhancing or reducing the amount of tax determined by the I.T.O. in an order of assessment under section 143 of the Act. The Delhi High Court after considering the judgments by the Supreme Court of India reported as (1986) 160 ITR 961 and (1991) 188 ITR 327 as well as (1963) 48 ITR 34 came to the conclusion that interest under section 214 was a part of assessment. In arriving to this conclusion reliance was placed on the following observation of the Supreme Court of India:--
"The word assessment is used in the proviso not as an- equivalent of the tax calculated at the rate given in the Finance Act but the total amount which the assessee is required to pay. The proviso applies whenever the effect of order is to touch the pocket of the assessee and in our opinion this was such a case."
24. It was held by the Delhi High Court that there is no scope for doubt that an assessment under section 143(3) would include not only determination of the amount of tax calculated at the rate prescribed under the Finance Act but also interest or any other thing which has the effect of reducing or enhancing the total amount payable by the assessee under such an assessment. The Delhi High Court ultimately held that:--
"We are of the opinion that interest under section 214 is a part of assessment and is deemed to be taxed for the purpose of this Act including clause (c) of section 246 an appeal by an assessee aggrieved by an order of assessment made under section 143(3) or section 144 of the Act, either original or in consequence of an appellate order with a view to giving effect to the directions contained therein, objecting to the amount of interest payable by the Government under section 214 of the Act to the assessee as determined by the I.T.O. is, therefore, maintainable under clause (c) of section 246 of the Act."
25. After having a resume of the case-law mainly from the Indian jurisdiction considering right of appeal in respect of an order levying additional tax/penal interest on account of default in payment of advance tax which is mainly based on the provisions contained in section 18-A (6) and (8) and section 30 of the repealed Income Tax Act, 1922 and the provisions contained in sections 214, 215 and 217 of the Indian Income Tax Act, 1961 and section 246 of the said Act we revert to the brief facts in the appeals under consideration before us. In all these appeals the point of controversy is over the maintainability of an appeal under section 129 of the Income Tax Ordinance, 1979 before the A.A.C. against the levy of additional tax under section 87 of the Ordinance, subsequent to the passing of the assessment order.
26. In all the cases under consideration before us the assessing officer omitted to levy additional tax under section 87 of the Ordinance while making the assessments and he subsequently proceeded to pass separate orders under section 87(1) of the Ordinance and issued IT-30 as well as notices of demand in all such cases. The appeals were filed by the respective assessees before the first, appellate authorities under section 129 of the Ordinance and all the appeals have been decided on merits. The learned first appellate authorities have treated the order under section 87 of the Ordinance as rectification orders passed under section 156. The first appellate authorities cancelled penalties in certain cases after holding that the same were barred by limitation under section 156 of the Ordinance whereas in other cases the orders of the assessing officer levying the penalties were maintained as valid orders. In one of the case order for assessment year 1987-88 has been held to be invalid for want of notice under section 156 of the Ordinance. The department has filed appeals in cases where the orders passed under section 87 have been cancelled whereas in other cases where the assessee's appeals have been dismissed further appeals have been filed against the maintenance of levy of additional tax under section 87 of the Ordinance.
27. We have heard M/s I.N. Pasha, Rehan Hasan Naqvi Farogh Nasim, learned Advocates for the assessees and Mr. Basharatullah, learned D.R. for the Department. The learned representatives for the parties have stated that there is no dispute on the point that if penal interest under section 87 is levied alongwith the main assessment order and the assessee prefers appeal raising objections on other points as well he has right to raise objections to the levy of additional tax under section 87 as well. The learned representatives for the parties have confined their arguments to the maintainability of appeal against a separate order under section 87 after the completion of assessment. The learned representatives for the assessees have submitted that although in section 129 it is not specifically provided that an appeal shall lie against an order under section 87 as well but the omission of section 87 and other allied sections from section 129 is immaterial as an appeal has been provided against the main assessment order and the levy of additional tax is a part of assessment order. Thus an objection to the levy of additional tax under section 87 amounts to an objection against the assessment order under section 59 or 59-A, 62, 63 and 65. They have further contended that the assessing officer is required to levy additional tax alongwith the main assessment order and if there is omission on his part and a separate order is made under section 87 after the completion of assessment it should be deemed to be rectification of mistake and thus such separate order would also be appealable first for the reason that it is a part of assessment order itself and secondly for the reason that appeal is specifically provided under section 156 of the Income Tax Ordinance, 1979. Mr. Pasha has submitted that levy of additional tax not resulting from assessment is not visualized under the Ordinance as no machinery has been provided for recovery of such tax and there is no mechanism either for charging such tax or recovery thereof. Mr. Pasha has further submitted that the recovery can be affected after service of notices under section 85 and according to the definition of tax contained in section 2(43) of the Income Tax Ordinance, 1979 tax means additional tax chargeable or payable under the Ordinance as well. According to Mr. Pasha even according to the prescribed form of notice of demand to be served upon the assessee under section 85 by rule 192 of the Income Tax Rules, 1982, the same situation emerges. He has submitted that only two forms of notices of demand under section 85 have been prescribed under Rule 192 of the Income Tax Rules, 1982 one pertaining to the assessment which covers the levy of additional tax as well and the other is in respect of penalty. Mr. Rehan Hasan Naqvi has contended that the levy of additional tax enhances the liability of an assessee and under section 129 of the Income Tax Ordinance, 1979 every order increasing the liability of an assessee is subject to appeal before the AA.C. Mr. Farogh Nasim has submitted that every order creating or enhancing liability is an assessment and the, law has provided appeal against such assessment order. He has submitted that an assessee cannot be deprived of the right of appeal until and unless it is expressly barred. He has further submitted that under Article 227 of the Constitution of the Islamic Republic of Pakistan read with Article 2-A the existing laws must be interpreted as far as possible keeping in view principles of interpretation in Islam specially in cases of fiscal statutes. In this behalf, he has placed reliance on a recent judgment of Hon'ble Lahore High Court in the case of M/s. Maple Leaf v. Collector of Central Excise and Sales Tax PTCL 1993 CL 656 wherein Mr. Justice Malik Muhammad Qayyum by placing reliance on the judgment of Hon'ble Supreme Court of Pakistan in the case of M/s. Siemen A.G. PLD 1991 SC 368 observed as follows:
"In the Islamic policy and system of dispensation of justice the importance of the right of appeal cannot be understated. It has been held to be a natural right vesting in an individual, which cannot be taken away even by a provision in the enactment. It is ordained by Holy Qur'an and Sunnah that a person must have right to go in appeal against a decision. In Pakistan through Ministry of Defence v. The General Public PLD 1989 SC 6 the Supreme Court went to the extent of striking down the laws which did not provide for a right of appeal."
28. The learned representatives for the assessees have further submitted that mere absence of particular section in the provision conferring right of appeal is not sufficient per se to exclude the orders under those sections from the purview of appeal if in fact it can be shown that the orders passed under particular sections actually fall within the purview of those sections/orders which are subject to the right of appeal. In this behalf they have contended that under the Income-tax Act, 1922 no specific right of appeal against an order under section 35 (rectification of mistake) was provided and it was held in various cases in the Indian jurisdiction that no appeal lay against an order under section 35. However, it was held by Dacca High Court and Sindh High Court that an order under section 35 rectifying a mistake was an appealable order for the reason that actually it was apart of assessment order.
29. On the other hand, it has been urged on behalf of the department that section 87 of the Income Tax Ordinance is an independent section and, therefore, any order passed under section 87 after the completion of assessment should be treated as an independent order and not a part of the main assessment order by way of rectification under section 156 of the Income Tax Ordinance. Taking-the arguments further the learned D.Rs have submitted that an order under section 87 being an independent order no appeal against such an order can be preferred for the simple reason that no such appeals are provided specifically in section 129 of the Income Tax Ordinance, 1979. The learned D.R. has further submitted that so far the contention regarding issuance of demand notice is concerned it can be issued in respect of additional tax levied under section 87 in the first proforma prescribed under Rule 192 of the Income Tax Rules, 1982 which contains an entry in respect of additional tax as well. The learned D.R. in support of his contention that no appeal lies against an order under section 87 has further placed reliance on the judgment of Hon'ble Supreme Court of Pakistan reported as (1991) PTD 663.
30. The learned representatives for the assessee further took a plea that an order under section 87 is required to be made either before the completion of assessment or at the most alongwith the assessment order and, therefore, if the assessing officer omits to make an order under section 87 alongwith main assessment order the omission can be rectified by way of rectification of mistake envisaged under section 156 of the Income Tax Ordinance. The plea taken on behalf of the department is that under the provisions contained in section 18-A (8) of the repealed Income-tax Act, 1922 the additional tax was required to be calculated in the manner laid down in subsection (6) of section 18-A and was required to be added to the tax as determined on the basis of regular assessment. However, with the promulgation of Income Tax Ordinance, 1979 no such conditions has been laid down in section 87 of the said Ordinance. The learned D.R. has submitted that in section 87 it has not been provided that the additional tax shall be levied on making the regular assessment and, therefore, when the legislature has not specified any particular time or stage for levying additional tax under section 87 it is within the discretion of the assessing officer to levy the same at any time by an independent order. It is in his discretion to make the order- levying additional tax before the completion of an assessment, alongwith the main assessment order or subsequent to the completion of assessment order. According to the learned D.R. the exercise of discretion by the assessing officer in levying the additional tax under section 87 at any time after the completion of assessment shall not be deemed to be mistake apparent on record rectifiable under section 156 and, therefore, time frame provided under section 156 shall also not be applicable and it would be an independent order against which no appeal lies to the AA.C./C.I.T.(A) for the reason that no such appeal is provided in section 129 of the Income Tax Ordinance.
31. We have carefully considered the contentions raised on behalf of the learned representatives for the parties. Although during the course of arguments before us no dispute has been raised on the point of maintainability of appeal against an order under section 87 alongwith the main assessment order and the main plank pf arguments on behalf of the parties is in respect of the maintainability of appeal against a separate order under section 87, but we are of the opinion that all the facts of the issue on the point of maintainability of appeal under section 87 should be examined in order to effectively adjudicate upon the question which has been referred to us. The point for consideration before this Larger Bench is, "Whether an order under section 87 is appealable under any circumstances." It appears to us that the issue relating to the maintainability of appeal against an order under section 87 as a part of the appeal against main assessment order has not been contested because of the earlier judgments of this Tribunal (1962) Tax (V) - 54 and other subsequent orders in which the judgment of Bombay High Court in the case of C.I.T. v. Jagdish Parshad Ramnath (1955) 27 ITR 192 was followed. We have shown in the earlier part of this order that there was no unanimity of view between various High Courts in India. The views held by various High Courts in India have undergone changes from time to time and the controversy has not been settled till now. In subsequent judgments various High Courts from Indian jurisdiction have leaned in favour of maintainability of the appeal mainly on the ground that the levying of advance tax is a part of the process of assessment and that any order enhancing the liability of an assessee and increasing the tax burden is a part of assessment. The controversy has persisted in Indian jurisdiction because of the provision contained in section 30(1) of the repealed Income-tax Act, 1922 and the re-enactment of similar provisions in section 246(c) in the Indian Income Tax Act, 1961. However, the law has been amended in Pakistan with the repeal of Income-tax Act, 1922 and enactment of section 129 providing appeals to the Appellate Additional Commissioner (previously called as Appellate Assistant Commissioner). We will discuss the effect of amendment presently. Thus in order to resolve all the controversies in respect of maintainability of appeal against an order under section 87 the following points require consideration:
(1) Whether payment of advance tax under section 53 and the levy of additional tax under section 87 in the case of default is a part of the process of assessment?
(2) At what point of time an assessing officer is required to pass an order under section 87?
(3) Whether an order under section 87 made at the time of main assessment is appealable?
(4) If an order under section 87 is not made at the time of assessment whether it could be made subsequently, if so, whether, it will be treated as an independent order under section 87 itself or it would be treated as an order under section 156 by way of rectification of mistake?
(5) If a finding required to be given at the time of assessment forms part of the assessment and such finding is omitted deliberately or by mistake and is given subsequently, whether it can still be treated as part of assessment, if so, its effect?
(6) If a finding under section 87 at the time of original assessment confers a right of appeal, whether an assessee can be deprived of this right as a result of deliberate omission on the part of an assessing officer or as a result of bona fide mistake on his part'?
(7) Whether a valuable right of appeal, which is predominantly a substantive right, can be taken away from a party or an assessee can be deprived of such right for none of his fault and in consequence of a mala fide act on the part of assessing officer or bona fide mistake?
32. The term "assessment" has been defined in section 2(7) of the Income Tax Ordinance, 1979 as follows:
"Assessment includes re-assessment and additional assessment and the cognate expressions shall be construed accordingly."
33. Chapter VII of, the Income Tax Ordinance, 1979 is titled as "assessment" and is comprising sections 55 to 67. Chapter VII contains the procedural provisions in respect of assessment. The process starts with the filing of return of total income under section 55 and ends with section 67, which has provided for reference to valuers and has conferred authority on C.B.R for making rules to give effect to the provisions of section 67. Section 62 provides that the Deputy Commissioner of Income-tax, after considering the evidence on record, shall by an order in writing assess the total income of the assessee and determine the tax payable by him on the basis of such assessment. Section 67 has provided that where in the course of any, "assessment proceedings" the Deputy Commissioner is of the opinion that the value of any capital asset shown in any return, statement or other document furnished by an assessee is not correct he may, either on an application by the assessee or otherwise, refer the matter to a valuer for ascertaining the proper value of such asset. These provisions indicate that the assessment is entire set of proceedings whereby total income of an assessee is determined and on the basis thereof the tax payable is computed and thereafter the recovery of tax is effected Thus, process of determining the total income, computation of the tax payable and the recovery of such tax collectively and cumulatively form part of assessment. The taut has been defined in section 2(43) of the Income Tax Ordinance to mean income-tax, super-tax, surcharge and additional tax chargeable or payable under the Ordinance and includes any penalty, or other charge or any sum or amount leviable or payable under the Ordinance. The expression "assessment" came for consideration in large number of cases before the superior Courts in the Indo-Pakistan sub-continent and before the Privy Council. It has been held that the word "assessment" has a very wide meaning. The Privy Council in C.I.T. v. Khemchand Ramdas (1938) 6 ITR 414 observed:
"In order to answer then it is essential to bear in mind the method prescribed by the Act making an assessment to tax, using the word assessment in its comprehensive sense as including the whole procedure for imposing liability upon the tax payer." '
34. The Supreme Court of India in the case of Lakshaman Shenoy v. I.T.O. Ernakulam (1958) 34 ITR 275 held that:
"Now the question is in what sense has the word "assessment" been used in section 13(1) of the Finance Act, 1950...Moreover the coalition of the words levy, assessment and collection indicates that what is meant is the entire process by which 'the tax is ascertained, demanded and realized."
35. In the case of CA. Ibrahim v. I.T.O. Kottayam (1961) 41 ITR 425, the Supreme Court of India observed as follows:
"A review of the provisions of Chapter IV of the Act sufficiently discloses that the word `assessment' has been used in its wider connotation in that Chapter. The title of the Chapter is `Deductions and Assessment'. The section which deals with assessment merely as computation of income is section 23; but several sections deal not with computation of income, but determination of liability, machinery for imposing liability and the procedure in that behalf. Section 18-A deals with advance payment of tax and imposition of penalties for failure to carry out the provisions therein. Section 23-A deals with power to assessee individual members of certain companies on the income deemed to have been distributed as dividend, section 23-B deals with assessment in case of departure from taxable territories, section 24-B deals with collection of tax out of the estate of deceased persons, section 25 deals with assessment in case of discontinued business, section 25-A with assessment after partition of Hindu undivided families and sections 29, 31, 33 and 35 deals with the issue of demand notices and the filing of appeals and for reviewing assessment and section 54 deals with `assessment' of incomes which have escaped assessment. The expression `assessment' used in these sections is not used merely in the sense of computation of income and there is in our judgment no ground for holding that, when by section 44, it is declared that the partners or members of the association shall be jointly and severally liable to assessment, it is only intended to declare the liability to computation of income under section 23 and. not to the application of the procedure for declaration and imposition of tax liability and the machinery for enforcement thereof."
36. Justice Tandulkar of the Bombay High Court held in the case of Bhai Lal Amin and Sons Limited v. R.K. Dalal (1953) 24 ITR 229 as follows:
"But apart from this in my opinion the words for the purpose of levy assessment and collection of income-tax include all procedure for the levy, assessment and collection of income-tax for without the procedure there can be no levy assessment or collection and taking any particular assessment with which we are concerned in this petition the assessment is not final until all remedies by way of appeals which are given by the Act are exhausted."
37. In the case of Kalawati Devi Harlalka v. C.I.T. West Bengal (1967) 66 ITR 680 the Supreme Court of India held that:
"It is quite clear from the authorities cited above that the word `assessment' bear a very comprehensive meaning; it can comprehend the whole procedure for ascertaining and imposing liability upon tax payer."
38, We have shown in earlier part of the order that in Indian jurisdiction now the consensus appears to have been developed that the word "assessment" is not confined to mere determination of total income and computation of tax or to the final act determining the tax liability. Tire expression assessment does not have a restricted connotation. It is not used merely in the sense of computation of income but covers the entire procedure for determination and imposition of tax liability including the payment of advance tax as advance tax has also been held to be a tax. It is inclusive of entire procedure of assessment creating tax liability and the machinery provisions for the enforcement thereof.
39. Now we revert to the provisions contained in section 53 of the Income Tax Ordinance, 1979 In order to ascertain the nature of advance tax. Section 53 reads as follows:
"53. Advance payment of tax.---(1) Where the total income of any assessee (excluding income to which section 27 or section 80-B or section 80-C or section 80-CC or subsections (1) and (2) of section 50 apply) for the latest assessment year in respect of which the tax payable by him has been determined under sections 59, 59-A, 60, 62, 63 or 65, is in the case of a company not less than fifty thousand rupees, and in other cases not less than one hundred fifty thousand rupees, he shall pay, by way of advance tax, to the credit of the Federal Government, on or before the fifteenth day of September, the fifteenth day of December, the fifteenth day of March and the fifteenth day of June in each financial year, an amount equal to one fourth of the full amount of income tax and super tax so determined to be payable in respect of that assessment year (without making any adjustment for any tax already paid by way of advance tax or otherwise), as reduced by the tax, if any, already collected or deducted and paid under section 50 in the said financial year,
(1-A) in the case of non-resident assessee, dividend income shall be excluded from the total income for the purposes of subsection (1).
(2) if any assessee who is required to make payment of advance tax under subsection (1) estimates at any time before the last instalment is due, that the tax payable by him for the relevant assessment year is likely to be less than the amount he is required to pay under subsection (1), he may furnish to the Deputy Commissioner an estimate of the amount of the tax payable by him, and thereafter pay such estimated amount, as reduced by the amount, if any, already paid under subsection (1), in equal instalments on such dates as have not expired.
(3) Any sum paid under subsection (1) or subsection (2) shall be treated as an advance payment of tax in respect of the assessment year commencing on the first day of July next following the financial year in which it is paid or, in the case of an assessee to whom section 72 or section 81 applies, the assessment year in which the "said date" as referred to therein, falls, whichever is the later, and credit therefor shall be allowed to the assessee in computing the tax payable by him for the said assessment year."
40. A perusal of subsection (3) of section 53 shows that any sum paid under subsection (1) or subsection (2) shall be treated as an advance payment of tax in respect of the assessment year commencing on the first day of July next following the financial year in which it is paid and that credit therefor shall be allowed to the assessee in computing the tax payable by him for the said assessment year. It is thus quite clear that the advance tax received from an assessee shall be taken into consideration in computing the tax payable by assessee and the computation of tax payable is made during the process of assessment and finally while completing the assessment. Thus by virtue of the provisions contained in subsection (3) of section 53 the payment of advance tax becomes a part of the process of assessment. The additional tax levied under subsections (1) and (2) of section 87 cannot be imposed without considering the facts and law necessary for attracting the provisions contained in subsections (1) and (2) of section 53. For the purpose of levying additional tax under section 87 the provisions contained in subsections (1) and (2) of section 53 are required to be considered without which it cannot be decided if the additional tax is liable to be paid or not and thus by levying additional tax under section 87 the provisions contained in section 87 and section 53 are to be read together. The result is that the provisions contained in section 53 and section 87 not only create a liability on the part of an assessee and thus becoming a part of the process of assessment but in fact the provisions contained in these two sections are so integrated with the process of assessment that without making them a part of the process of assessment the real tax liability of an assessee cannot be determined and ascertained. The answer to the question No.l is, therefore, in affirmative.
41. The next question is at what point of time an assessing officer is required to pass an order under section 87. The learned D.R. has submitted that under the provisions of repealed Income-tax, Act, 1922 an order levying the additional tax could be made either before the completion of assessment or at the time of making the regular assessment. He has submitted that under subsection (8) of section 18-A of the repealed Income-tax Act the I.T.O. was required at the time of making regular assessment to examine if the advance tax has been paid as required under the law or not and in case of default he was required to calculate the additional tax in the manner laid down in subsection (6) of section 18-A and add the same to the tax as determined on the basis of regular assessment. The learned D.R. has submitted that with the promulgation of Income Tax Ordinance, 1979 no such conditions has been retained and, therefore, now the assessing officer can make an order under section 87 prior to the completion of assessment, at the time of completion of assessment or subsequent to the completion of assessment at his discretion. He has submitted that the requirements of adding the additional tax at the time of regular assessment has been done away with in the Income Tax Ordinance, 1979. We are not persuaded to agree with the contention of learned D.R. for the reason that under subsection (3) of section 53 the credit for advance tax is required to be given in computing the tax payable by him for the relevant assessment year. It is provided in subsection (2) of section 53 that an assessee who is required to make payment of advance tax under subsection (1) may estimate at any time before the last instalment is due that the tax payable by him for the relevant assessment year is likely to be less than the amount he is required to pay under subsection (1) and thereafter pay the advance tax according to his estimate. A further restriction is placed under subsection (2) of section 87 that if the tax so paid on estimate basis is less than 80% of the tax chargeable for the relevant assessment year, he shall be liable to pay additional tax on the amount by which the tax paid by him falls short of the said 80% and such additional tax shall be calculated from the first day of April in that year to the date on which assessment is made or the thirtieth day of June of the financial year next following whichever is earlier. Now both these provisions are to be read together, and the provisions are so inter-connected and integrated that without reading the two provisions together it is not possible to ascertain the advance tax liability on estimate basis. It becomes abundantly clear that all, this exercise is to be done at the time of completion of assessment. When the expression "and credit therefor shall be allowed to the assessee in computing the tax payable by him for the said assessment year" and the expression "any assessee fails to pay tax under subsection (2) of section 53 or the tax so paid is less than 80% of the tax chargeable for the relevant assessment year" clearly indicate that notwithstanding the omission of word "regular assessment" when compared with section 18-A (8) of the repealed Income Tax Act, 1922, the intention of the Legislature is very clear that even under the Income Tax Ordinance, 1979 the advance tax required to be paid by an assessee and in the case of default additional tax payable by him is to be calculated and imposed at the time of completion of assessment. Thus we are of the opinion that on reading all the relevant provisions contained in the Income Tax Ordinance, 1979 including section 62 which requires that the Deputy Commissioner shall by an order in writing assess the total income of the assessee and determine the tax payable by him on the basis of such assessment, an order under section 87 is required to be made either before the completion of assessment or at the most at the time of completion of assessment.
42. We now proceed to examine whether an order under section 87 made at the time of main assessment is appealable. As there is no dispute between the parties on this point, therefore, we will not examine this issue in detail but would like to throw some light as it will help us in determining whether an order separately made under section 87 is appealable or not. We have already shown that a lot of controversy has taken place in Indian jurisdiction on the point if an order levying additional tax on account of default in paying advance tax is appealable or not even if such order is made with the main assessment. The reason is that under section 30 of the repealed Income-tax Act, 1922 it was provided that, "any assessee objecting to the amount of income assessed under section 24 or the amount of loss computed under section 24 or the amount of tax determined under section 23 or denying his liability to be assessed under this Act, or objecting to the assessment being made under subsection (4) of section 23 or objecting to the cancellation by an I.T.O. of the registration of a firm under subsection (4) of section 23 may appeal to the Appellate Assistant Commissioner against the assessment or against such refusal of order." Thus, the right of appeal provided in section 30 of the Income-tax Act, 1922 was not absolute but was subject to several conditions. Likewise under section 246(c) of the Indian Income Tax Act, 1961 an assessee may appeal to the Appellate Assistant Commissioner against, "an order against an assessee, where the assessee denies his liability to be assessed under this Act or any order of assessment under subsection (3) of section 143 or section 144, where the assessee objects to the amount of income assessed or to the amount of tax determined or to the amount of loss computed or to the status under which he is assessed." Thus, while examining if an appeal could be filed before the AA.C against an order levying additional tax on account of default in paying advance tax the order was required to be brought under the parameters prescribed in the provisions cited above. On the other hand, under section 129 of the Income Tax Ordinance, 1979 it is provided as follows:
"129: -Appeal to the Appellate Additional Commissioner..---(1) Any assessee objecting to an order made by Deputy Commissioner under section 59 or 59-A, (where any adjustment has been made under subsection (3) or subsection (2), respectively, of those sections) 62, 63, 65, 68, 75, 80, 80-A, 91, 98, 99, 105 -to 112 (inclusive), 114 or subsection (2) of section 148, or an order under section 52, treating a person to be an assessee in default, or an order under section 78, treating the assessee as an agent of a non-resident, or an order under section 156 refusing to rectify the mistake either in full or in part, as claimed by the assessee or having the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the assessee may appeal to the Appellate Additional Commissioner against such order.
43. A perusal of the above provision shows that under section 129 of the Income Tax Ordinance, 1979 an assessee can prefer an appeal against all or any part of the order of assessment under sections 59, 59-A, 62, 63, 65 and other orders enumerated therein. The right of filing an appeal is not subject to further conditions as laid down under section 30 of the repealed Income-tax Act, 1922 and the Indian Income Tax Act, 1961 with result that the Indian High Courts in order to provide a right of appeal to the assessees had to hold that in order to exercise the right of appeal an assessee has to deny his liability to be assessed under the Act and initially the view of those High Courts which were in favour of the right of appeal to an assessee was also that the quantum of tax cannot be challenged as no such provision was there in section 30 of the repealed Income-tax Act, 1922 and section 246(c) of the Indian Income Tax Act, 1961.
44. The upshot of the above discussion is that with the promulgation of section 129 of the Income Tax Ordinance, 1979 the assessee has the right to file an appeal against all and every part of the assessment order without any reservations and conditions and if an order under section 87 is treated as part of the assessment order it automatically becomes appealable. We have shown above that an order under section 87 is actually a part of the assessment order and thus it becomes appealable if it is made alongwith the main assessment order. The question if the order is not made at the time of main assessment order shall be examined by us presently.
45. Now we proceed to examine if an order under section 87 is not made at the time of assessment whether it could be made subsequently and if so whether it will be treated as an independent order under section 87 itself or it will be treated as an order under section 156 by way of rectification of the mistake. The subsequent three questions shall also be considered alongwith this issue. After coming to the conclusion that the payment of advance tax under section 53 and the levy of additional tax under section 87 is a part of the process of assessment we find no difficulty m holding that although the issue related to levy of additional tax under section 87 should be decided at the time of making the assessment order but if at that stage such order is not made it will be deemed to be a mistake apparent on record and such order can be made subsequently by recourse to the provisions contained in section 156 of the Income Tax Ordinance, 1979 by way of rectification of mistake. As we have held that notwithstanding the repeal of income-tax Act, 1922 and promulgation of Income Tax Ordinance, 1979 -the requirement of law is that the additional tax on account of default in payment of advance tax be made at the time of completion of assessment, therefore, the judgments from the Indian jurisdiction on the point that subsequent order should be treated as mistake apparent on record still holds-the field. It has been held by Madras High Court in the case of V.N.S. Sockalingam Chettiar and others v. I.T.O. (1959) 36 ITR 451 that if no additional tax is levied under section 18-A (8) of the Income-tax Act, 1922 and it has not been added to the tax determined on the basis of regular assessment such omission is a mistake and section 35 of the Income-tax Act applies and mistake can be rectified under that section. It was further held that the requirement of law is that the mistake should be apparent in the record and it is not necessary that it should be in the assessment as such. It was held by the Bombay High Court in the case of Lata Mangeshkar v. Union of India and others that where no penal interest was charged on non-payment of advance tax in the regular assessment it could be rectified subsequently as a mistake apparent from the record by recourse to section 35 of the Income-tax Act, 1922. It has been held by Supreme Court of India in the case of I.T.O. Alwaye v. Asoka Textiles Limited (1961) 3 Tax 303 that if assessing officer omitted to levy penal tax under section 18-A of the Income-tax Act, 1922, mistake can be rectified under section 35 of the said Act.
46. After coming to the conclusion that any subsequent order of the assessing officer, after the completion of assessment, levying additional tax under section 87 is to be treated as an order under section 156 we need not to dilate on the point if such order is appealable or not because now under the Income Tax Ordinance, 1979 a specific right of appeal has been conferred against an order under section 156.
47. We would like to examine another plea raised on behalf of the department that since no specific right of appeal has been given by the legislature against an order under section 87, therefore, the right of appeal against such order is not available to an assessee. It would be appropriate to recall here that under the Income Tax Act, 1922 the order of rectification under section 35 was not specifically appealable and there are several judgments from the Indian jurisdiction that an order under section 35 is not appealable because the right of appeal is not an inherent right. It has to be conferred specifically under the law and the legislature has not conferred any such right on the assessee. However, more enlightened and a liberal view was taken by the superior Courts in Pakistan. The issue came for consideration before Dacca High Court in the case of Inland Navigation Co. Ltd. v. I.T.O. (1967) 16 Tax 1. After examining the relevant provisions of law it was observed by Justice Salahuddin Ahmed as follows:
"On a consideration of the different provisions of law, quoted above, we have come to the conclusion that the order of assessment made under section 23 does not cease to be an order under that section merely because it has undergone a change by way of rectification due to some mistake apparent from the record of assessment. The original order of assessment, which is substituted, by rectified order made under section 35 of the Act continues to be an order under section 23 so as to attract to it the provisions of section 30 or 33 which provides for an appeal. We are supported in our view by a decision of the Privy Council reported in 65 I.A. page 236 (C.I.T. Bombay Presidency and Aden v. Khemchand Ramdas)."
48. It was further observed that:
"An I.T.O. wishing to make his order non-appealable may commit a mistake apparent from the record and thereby rob the assessee of his right of appeal. The position is wholly untenable. We are therefore, clearly of the opinion that an assessee is entitled to appeal under section 30 or section 33, as the case may be, from an order of assessment that has undergone a rectification under section 35."
49. In the same judgment Justice Abdul Hakim Khan cited the following observation of Chagla, C.J. in the case of Shantilal Rawji 34 ITR 439:
"Rectification proceedings are not intended for making an order which by the income Tax Officer in the original assessment could have been challenged, in appeal. the legislature did not intend that the rectification order should act to the prejudice of the assessee in this sense that he should be deprived of a right of appeal by resorting to rectification proceedings because a particular order was not made in the original assessment."
50. The Hon'ble Judge further observed that there is no dispute that an appeal still lies against an order of re-assessment, or assessment under section 34 of the Act though this section is not mentioned in section 30 which is the provision for an appeal. .
51. The issue again came for consideration before Karachi High Court in the case of Hasan Ali Karabhai v. C.I.T. PLD 1974 Kar. 473. It was held by Justice Noorul Arfeen as follows:
"Notwithstanding that no specific appeal is provided in section 30(1) of the Income Tax Act, 1922 against an order under section 35 but such appeal lies as an order under section 35 in effect partakes the character of fresh assessment order and is referable to section 23 of the Income Tax Act, and, therefore, such an order being in the nature of an order of assessment would be appealable under section 30(1) of the Act to the A.A.C.".
52. In a recent case it has been held by Karachi High Court in the case of C.I.T. Central Zone-B v. Esso Pak, Fertilizer Limited (1990) PTD 787 as follows:
"The argument is that under section 30 of the Income Tax Act no appeal lay in respect of an order passed under section 18(7). It is correct that in section 30 no appeal is expressly provided against action taken under section 87. However, under the provision last referred, the remitter is deemed to be an assessee in default. Under section 30(1) of the Income Tax Act an appeal is generally provided to a person" "denying his liability to be assessed under this Act." It appears that these words contemplate a broad category of persons and also cover the case of an assessee in default, if he disputes liability. We are, therefore, of the view that an appeal did lie and was properly taken and thus there was no bar for the Tribunal to adjudicate upon the ultimate appeal taken to it."
53. In view of above three judgments and particularly the last judgment by his Lordship Mr. Justice Wajihuddin there is no room for any argument that assessee has no right of appeal against an order under section 87 because said section is not specifically mentioned in section 129 conferring the right of appeal on an assessee. It has been held in number of judgments by this Tribunal and the superior Courts that the right of appeal is a valuable right and by now it stands established that it is not merely a procedural right but it is substantive right as well and, therefore, we are of the considered opinion that when the department also concedes that the right of appeal is available to an assessee if additional tax is levied under section 87 when such an order is made with the main assessment order, it cannot be left at the discretion or volition of an assessing officer to provide this right to an assessee or deny the same by making a separate order under section 87. The main plank of argument against the right of appeal has been that under section 129 no such right has been conferred. We are of the opinion that in view .of Circular No.4 of 1979, dated August 23, 1979 by the C.B.R., this argument should not be available to the department. Circular No.4 of 1979 by the C.B.R. is reproduced below:
"The provisions of the new secti6n are similar to those of old section 30. However, the following orders of the Income Tax Officers have also been made appealable.
(1)Refusal to allow refund under section 98 or 99.
(2) Levy of penalty on liquidator under section 114.
(3) Levy of penalty for obstruction under section 115.
(4) Levy of penalty for failure to give evidence under section 148.
(5) Treating a resident as agent of a non-resident under section 78.
(6) An order under section 156 rectifying the mistake apparent from record in the order enhances the tax or reduces the refund.
It may be pertinent to point out that orders involving provisions of section 84 (sections 44-E and 44-F of the repealed Act) are still appealable as these are. part of order under section 62 or 63 which is appealable."
54. A perusal of the above circular shows that even the C.B.R. is of the view that merely because a particular section is not mentioned in section 129 it would not be sufficient per se to deprive an assessee from the right of appeal if a particular order actually falls within the purview of another order which is appealable. If the C.B.R. is of the view that an order under section 84 though not mentioned in section 129 is still appealable being a part of order under section 62 or 63 there is no reason why an order under section 87 should not be appealable which is part of the assessment order whether made at the time of completion of assessment or otherwise after the completion of assessment by way of rectification.
55. For the foregoing reasons our reply to the question whether an order under section 87 is appealable under any circumstances is in afformative.
56. In view of above discussion dealing with all the aspects of the question referred to us we need not to discuss other aspects of the arguments raised on behalf of the learned representatives for the parties. However, before parting with this order we would like to refer to two judgments. First by the Hon'ble Sindh High Court reported as 1985 PTD 324 and secondly to the judgment of Hon'ble Supreme Court of Pakistan reported as (1991) PTD 663. In both the above judgments the provisions for consideration before the Hon'ble Sindh High Court and Hon'ble Supreme Court of Pakistan were the provisions as contained in Income-tax At, 1922. We have demonstrated by referring to the various provisions contained in the Income Tax Ordinance, 1979 that the law has undergone change and under the law as it exists now an appeal lies against order under section 87. Thus any concession made on behalf of the learned counsel for department in the context of provisions contained in the repealed Income-tax Act, 1922 has no bearing on the law as it stands after the promulgation of Income Tax Ordinance, 1979 which is holding the field.
57. Since this Larger Bench was constituted to consider the limited point of appeal ability of the order under section 87, therefore, after replying the same in affirmative we direct that all the appeals may be fixed before the Division Benches of this Tribunal disposed on their merits.
(Sd.)
(Sd.)(MUHAMMAD MUJIBULLAH SIDDIQUI),
(ABDUL MALIK)CHAIRMAN
ACCOUNTANT MEMBER
(Sd.)(Sd.)
(TAHSEEN AHMED BICAITI)(S.M. SIBTAIN)
JUDICIAL MEMBERACCOUNTANT MEMBER.
(Sd.)
(ASAD ARIF)
ACCOUNTANT MEMBER
M.B.A./142/TOrder accordingly.