(a) Income Tax Ordinance (XXXI of 1979)---

---First Sched., Part IV, para. B(2)---"Public company "---Definition-- "Government" occurring in First Sched., Part IV, Para. B(2) cannot be extended to include bodies created by Provincial or Federal Statutes or incorporated as companies by these Governments---Rules of interpretation do not permit to restrict or enlarge the meaning of express words used in the statute---Mere fact that in earlier years the status of the assessee-Company was accepted as a "public company" or that in the case of another concern managed by Punjab Industrial Development Board the Revenue had accepted the claimed status as a public company will not be of any significance---No estoppel exists against law and one wrong cannot be acted upon as a precedent when it comes to give effect to the express words of a statues.

1996 PTD (Trib.) 25; 1993 PTD (Trib.) 110 and 1996 PTD (Trib.) 1117 ref.

(b) Interpretation of statutes---

--- Fiscal statute---Rules of interpretation of such a statute do not permit Court to restrict or enlarge the meaning of express words used in the statute.

(c) Estoppel---

----No estoppel exists against law and one wrong cannot be acted upon as a precedent when it comes to give effect to the express words of a statute.

(d) Income Tax Ordinance (XXXI of 1979)---

---S. 5(1)(c)---Commissioner of Income Tax (Companies) Lahore Circular No.K-160(4)/1991-1992/917, dated 5-1-1992---Jurisdiction of Income Tax Authorities--- Deputy Commissioner of Income Tax and Inspecting Assistant Commissioner of Income Tax are to perform their functions as conferred upon them under the Ordinance in respect of person or class of persons or such areas as directed by the Commissioner to whom they are subordinate-- Commissioner is empowered to direct that powers conferred on Deputy Commissioner Income Tax in respect of any proceedings relating to specified cases or class of cases shall be exercised by the I.A.C. and after it has been directed by the Commissioner any reference to D.C.I.T. for the purpose of such proceedings or cases or class of cases shall be deemed to be a reference to the I. A. C. ---Principles.

The provisions of section 5(1)(c), Income Tax Ordinance, 1979 are so clear and obvious that there is no trace of the assumed incompetency of the I.A.C. According to this provision the D.C.I.T. and I.A.Cs are to perform their functions as conferred upon them under the Ordinance in respect of person or class of persons or such areas as directed by the Commissioner to whom they are subordinate: The provision further empowers and authorises the Commissioner to direct that the powers conferred on D.C.I.T. in respect of any proceedings relating to specified cases or class of cases shall be exercised by the I.A.C. After it has so been directed by the Commissioner any reference to D.C.I.T. for the purpose of such proceedings or cases or class of cases shall be deemed to be a reference to the I.A.C. Therefore, once a notification or an order under this section has been issued the I.A.C. assigned with the job in relation to specific cases or areas shall by legal presumption, be a C.I.T. and all references in the Ordinance to D.C.I..T shall be so read.

The provisions of section 5(1)(c) have created a clear and an unambiguous presumption that after issuance of an order by the Commissioner all references to D.C.I.Ts shall be deemed to be references to I.A.Cs. The presumption so created being well within the power of the Legislature there appears no reason to refuse its implementation in letter and spirit.

The imagined line of distinction drawn between the words "powers" and "functions" also appears far-fetched so far as the interpretation of the aforesaid provision is concerned.

If a D.C.I.T. is a persona designata then after issuance of a notification or order under section 5(1)(c) the I.A.C. stepping into the shoes of the D.C.I.T. also becomes an equal persona designata. Once the C.I.T. has decided to object to an order passed by an A.A.C. he is competent to make a direction to the person entrusted with the jurisdiction to file appeal be it a D.C.I.T., or an I.A.C. notified for this purpose under section 5(1)(c). The kind of lack of competence to file an appeal by an I.A.C. on the supposed interpretation of the words "functions" and "powers" is not seen anywhere nor is reasonably deduced from the words of the statute.

1993 PTD 1100; 1996 PTD (Trib.) 25; Messrs Pak-Arab Fertilizer I.T.As. Nos.4509 to 4511/LB of 1986-87; 4760/LB of 1985-86; 6659 to 6661/LB of 1985-86; 4512/LB of 1986-87; 2146, 2147/LB of 1984-85; Sheikh Palat v. Sarwan Sahu and others AIR 1920 Pat. 581; Muhammad Qamar Shah v. Muhammad Salamat Ali Khan AIR 1930 All. 112; Messrs Rahe Manzil Transport and others v. Mohammed Amin PLD 1963 (W.P.) Kar. 182; Chiragh Muhammad v. Mst. Raqia Bibi and others PLD 1974 Note 15, P 49; ITA Nos.18, 19/LB of 1991-92; C.B.R. v. S.I.T.E. PLD 1985 SC 97; Collector of Customs and others v. Muhammad Mahfooz PLD 1991 SC 630; Re: Master Khusrow Amir Khan Niazi PLD 1975 Lah. 819; Begum Tahira Fazal Ahmed v. Home Secretary, Government of West Pakistan PLD 1966 Lah. 446; Black's Law Dictionary, Third Edn.; 1986 PTD 873; 1997 PTD (Trib.) 1435; Republic Motors v. I.T.O. and others 1990 PTD 889; 1996 PTD (Trib.) 25; 1993 PTD (Trib.) 110; 1996 PTD (Trib.) 1117; PLD 1997 Lah. 36; Punjab Small Industries Ltd. v. DCIT 1995 PTD 431; 1993 SCMR 468; 1993 PTD (Trib.) 1100; West Pakistan Road Transport Board v. CIT 1973 PTD 499; 1996 PTD Note 34, P.50; Garikapati Veeraya v. N. Subbiah Chaudhry PLD 1957 SC (Ind.) 448; 1992 PTD 1681; F.A. Khan v. Government of Pakistan PLD 1964 SC 125 and Flour Mills Employees' Union, Karachi v. Steem Roller Flour Mills PLD 1964 (W.P.) Kar. 584 discussed.

(e) Income-tax---

----Appeal---Merely a continuation of original proceedings.

Garikapati Veeraya v. N. Subbiah Chaudhry PLD 1957 SC (Ind.) 448; 1992 PTD 1681; F.A. Khan v. Government of Pakistan PLD 1964 SC 125 and Flour Mills Employees' Union, Karachi v. Steam Roller Flour Mills PLD 1964 (W.P.) Kar. 584 ref.

(f) Persona designata---

----Meaning---Such person means a person pointed out or described as an individual as opposed to a person ascertained as a member of a class or as filing a particular character.

Black's Law Dictionary, 5th Edn. p.1029 and A Concise Law Dictionary by P.G. Osborn, 5th Edn., p. 240 ref.

(g) Words and phrases---

-------Word 'Government'---Meaning.

Master Khusrow v. Amir Khan Niazi PLD 1975 Lah. 819; Begum Tahira Fazal Ahmed v. Home Secretary, Government of West Pakistan PLD 1966 Lah. 446; Black's Law Dictionary, Third Edn.; 1986 PTD 873; 1997 PTD (Trib.) 1435; Republic Motors v. I.T.O. and others 1990 PTD 889; 1996 PTD (Trib.) 25; 1993 PTD (Trib.) 110 and 1996 PTD (Trib.) 1117 ref.

Rana-Munir Hussain, L.A. and Shahid Bashir, D.R. for Appellant.

Syed Abrar Hussain Naqvi and Sarfraz Mahmood, F.C.A. for Respondent.

Date of hearing: 21st August, 1997.

ORDER

NASIM SIKANDAR (JUDICIAL MEMBER). ---These departmental appeals pertain to the assessment years 1989-90 and 1990-91 and arise out of a common order of CIT(A), Zone III, Lahore recorded on 12-12-1991.

2. The respondent is a company limited by shares and derives income from manufacture and sale of sugar. The whole of its paid-up capital is owned by Punjab Industrial Development Board and its nominees. In the two years under review the assessee returned incomes respectively at Rs.6,85,56,803 and Rs 29,39,539. Instead the assessments were framed at Rs.1,21,01,600 (after adjustment of brought forward losses) in the 'year 1989-90 and at R.s.31,17,587 in the assessment year 1990-91. In the process, inter alia the assessee was assigned the status of a private limited company in terms of Para. B(2) Part IV of the First Schedule to the Income Tax Ordinance which for the purpose of the Schedule, defines a Public Company in these terms:---

(2) "Public company" means---

(a) a company in which not less than fifty per cent. of the shares are held by the Government;

(b) ...............

(c)...............

3. The assessee had claimed itself to be a public company in terms of the aforesaid definition of the Schedule to claim a rebate of 5% in super-tax. It was averred that all of its paid-up capital was owned by P.I.D.B which in terms was wholly owned by the Punjab Government. The assessing officer however did not agree. In the first year viz 1939-90 he concluded the assessment by remarking:---

"For tax rate purposes, the status of the company will be that of a Private Limited Company as it is owned by P.I.D.B., a corporate body created through a Statute and an independent artificial juridical person and not by the Government of the Punjab itself. It is also not quoted on stock exchange. "

4. In the next year viz 1990-91 same findings were repeated in these words:---

"The status of the company will be i.e. Private Limited Company as it is owned P.I.D.B., a corporate body created through a statute and an independent artificial juridical person and not by the Government of Punjab itself. It is also not quoted on stock exchange."

5. The first appellate authority CIT(A), Zone III, Lahore through a consolidated order dated 12-12-1991 reversed the assigned status and directed the assessing officer to treat the respondent as a Public Company for tax rates purpose. The appellate authority, apparently agreed that the assessee was a Public Company in terms of the above definition because it was wholly owned by the Punjab Government through Industrial Development Board. Before the appellate authority the assessee relied upon the cases of M/s. Pak- Arab Fertilizer Limited and Lyallpur Chemicals and Fertilizer Limited. In the first case the Tribunal and in the second case the first appellate authority allegedly accepted the claim of status of the companies placed in exactly the same situation both factually as well as legally. The relief so allowed has been challenged besides other grievances on facts.

6. These departmental appeals came up for hearing on 24-7-1997 before a Division Bench presided by the learned Chairman. Learned D.R. appearing for the Revenue relied upon two judgments of Islamabad Bench of the Tribunal namely 1993 PTD 1100 and 1996 PTD (Trib.) 25 to support the view adopted by the assessing officer in denying the claim of status as a Public Company. On the other hand learned counsel for the assessee stated that there were two judgments from the Lahore Bench in favour of the assessee. The first judgment was stated to be in the case of Messrs Pak-Arab Fertilizer dated 17-4-1989 in I.T.As. Nos.4509 to 4511/LB/1986-87 (Assessment years 1980-81 to 1982-83), I.T.A. No.4760/LR of 1985-86 (Assessment year 1983-84), I.T.A. No.6659 to 6661/LB of 1985-86), (Assessment years 1982-83 to 1984-85) I.T.A. No.4512/LB of 1986-87 (Assessment years 1985-86) and I.T.A. No.2146-2147/LB of 1984-85 (Assessment years 1980-81 and 1981-82). As noted above this order was earlier relied upon by the first appellate authority to allow the impugned relief. It was further stated that the Lahore Bench of the Tribunal had also made a favourable judgment in the case of M/s. Kamalia Sugar Mills which was another unit of the P.I.D.B. The representative of the parties in the above background requested for constitution of a Full Bench to resolve the conflicting views expressed by the Benches sitting at Islamabad and Lahore. This Full Bench was, therefore, constituted for the purpose.

7. At the time when above proceedings were held, a preliminary objection was raised with regard to maintainability of appeals by Mr. Sarfraz Mahmood learned A.R. of the assessee. It was stated that both the departmental appeals were required to be filed by D.C.I.T while these had in fact been preferred by I.A.C. Range-VI Companies, Lahore. Learned D.R. countered the submissions on the ground that the jurisdiction of the case was, transferred to the I.A.C. under section 5(1)(c) of the Income Tax Ordinance by the Commissioner of Income Tax Companies, Lahore and consequently the appellant I.A.C. was working as an assessing officer. According to the learned D.R. by virtue of transfer of jurisdiction the I.A.C. was empowered to exercise the jurisdiction vested in the D.C.I.T. and consequently the appeals were rightly filed by the I.A.C. in his capacity of an assessing officer. In support of the submissions an office order of the Commissioner Income Tax Companies, Lahore bearing No.K-160(4)/1991-92/917, dated 5 1-1992 was produced. After perusing this order of the Commissioner the assistant to Mr. Sarfraz Mahmood learned A.R. for the assessee did not press the preliminary objection against maintainability of appeals.

8. When these appeals came up for hearing before us learned counsel for the assessee Mr. Abrar Hussain Naqvi at the outset of the proceedings submitted an affidavit of Rizwan Bashir, A.C.A. who assisted Mr. Sarfraz Mahmood, F.C.A. in the proceedings held on 24-7-1997. Through this affidavit the deponent has denied to have ever made any statement with regard to withdrawal of the preliminary objection against competency of the appeals. Learned counsel therefore proceeds to press the objection on the ground that the appeals in question were not competent on account of their having been filed by a person who could not be treated as an appellant. According to the learned counsel subsection (2) of section 134 expressly provides that a Commissioner may, if he objects to any order passed by an A.A.C. under section 132, direct the D.C.I.T. to appeal to the Appellate Tribunal against such order. Therefore, learned counsel continues it is only "the" D.I.C.T. who can file an appeal and no-one else can take his place to become an appellant even if the functions of an assessing officer or D.C.I.T. are assigned to another officer by resort to the provisions as contained in section 5(l)(c) of the Ordinance. Also submits that subsection (2) of section 5 refers to exercise of "powers" after a direction has been issued under subsection (1). Again that the powers conferred on an officer under section 5(1)(c) can be performed in respect of "proceedings" only and an I.A:C. does not become a D.C.I.T. for all intents and purposes. At least he does not become an appellant as contemplated in section 134 of the Ordinance. Further submits that word proceedings as used in this section refer to original or assessment proceedings and not to appeal proceedings. In the view of the learned counsel for the assessee an I.A.C. assigned the functions of a D.C.I.T. with respect to some proceedings cannot do anything beyond the powers expressly transferred to him as the D.C.I.T. is persona designata for the purpose of filing of an appeal.

9. Relying upon various judgments including AIR 1920 Pat. 581 re: Sheikh Palat v. Sarwan Sahu and others the learned counsel avers that presentation of a memorandum of appeal by a person who had no authority was not a valid presentation. Also refers to AIR 1930 All. 112 re: Muhammad Qamar Shah v. Muhammad Salamat Ali Khan wherein it was held that a memorandum of appeal presented in Court by an unauthorised person was no appeal at all and that Court could reject the same for that obvious defect. With respect to the scope and extent of powers of I.A.C. who has beets directed to act as D.C.I.T., learned counsel relies upon the meaning and scope of "proceedings" as explained in PLD 1963 (W.P.) Kar. 182 re: Messrs Rahe Manzil Transport and others v. Muhammad Amin. To contend further that an I.A.C. could function with regard to "proceedings" only which did not include filing of appeal nor the proceedings before an appellate authority, support is sought from the reported decision cited as PLD 1974 Note 15, P.49 re: Chiragh Muhammad v. Mst Raqia Bibi and others.

10. Learned counsel for the assessee respondent draws a distinction between "powers" and "functions" to be discharged by an I.A.C. in such situation. It is stated that an I.A.C. when notified is directed under the said provisions to exercise the "powers" of the D.C.I.T. and not to perform his "functions". According to him functions are duties and not powers. It is further explained that the power to file an appeal under section 134 of the Ordinance is primarily vested in a Commissioner. However, where he decides to go for an appeal he makes a direction to the D.C.I.T. who is bound by that direction. In this manner, as per learned counsel, the filing of an appeal becomes rather a duty on the part of the D.C.I.T. Power and function, according to learned counsel are two different words conveying different meanings. These are neither synonmous nor their connotations can substitute each other. Further contends that an appeal under subsection (2) of section 134 is to be filed only by "the" D.C.I.T. who is a persona designata while the I.A.C. remains an I.A.C. and not "the" D.C.I.T. who could only file an appeal.

11. On facts learned counsel states that the assessee company is wholly owned anti managed by the Punjab Industrial Development Board which was constituted under the Punjab Industrial Development Board Act, 1973 (Punjab Act XXIII of t) 3). From the various provisions of the Act particularly those relating to the constitution of the Board as given in section 5, its powers to act and its relation to the Government of Punjab as stated in sections 18, 19, 20, the learned counsel seeks to establish that the Punjab Government and the Board are one and the same thing. Also argues that for the purpose of knowing the exact status of the Board this Tribunal can lift the corporate veil. It is claimed that if the veil of corporation is lifted it will be found that the Board is totally manned by the officers of the Punjab Government, the funds are contributed and in case of dissolution as contemplated in section 26 of the Act all properties, funds liabilities and assets shall become the assets and liabilities of Government of Punjab. Learned counsel also refers to a number of documents/letters including correspondence between various offices of the Punjab Government with respect to certain decisions made for the purpose of running the Board as well as the assessee company. It is stated that the creation of Punjab Industrial Development Board by the Government of Punjab was only for the purpose of convenience. Otherwise he continues the Government and Board are not two separate entities as the Board acts for and on behalf of the Government. Therefore, the shares "held" by the Board can conveniently be taken as being held by the Government of Punjab itself.

12. The aforesaid decision recorded by the Tribunal on 17-4-1989 in re Pak Arab Fertilizer v. ITO Central Circle-II, Lahore is relied upon. Also refers to another order of the Tribunal dated 15-2-1989 recorded in I.T.A. No. 18-19/LB of 1991-92 (Assessment years 1988-89 and 1989-90 re: ITO v. Lyallpur Chemicals and Fertilizers Limited. In that case 70% shares of the assessee company were held by M/s. National Fertilizers Corporation which in turn was wholly owned by the Government. Learned Division Bench deciding the appeal relied upon the said case of M/s. Pak-Arab Fertilizer Limited which in turn was based upon another decision of the Karachi Bench dated 25-6-1989 and found in favour of the assessee and rejected the departmental appeal.

13. Lastly, Mr. Abrar Hussain Naqvi, Advocate submits that the ratio settled in re: C.B.R. v. S.I.T.E., PLD 1985 SC 97 remains a good law and that introduction of Article 165-A in the Constitution has only changed the position qua taxability of Government owned Corporations. Further contends that status of the assessee in the above case namely M/s. Sindh Industrial Trading Estate Limited determined as a department of Provincial Government notwithstanding its incorporation as a company was comparable to that of the Board before us. We are informed that in the case of M/s. Kamalia Sugar Mills Limited which is another project of the P.I.D.B. The Revenue is all along treating it as a Public Company for the purpose of first Schedule to the Income Tax Ordinance. The assessment framed for the year 1995-96 in respect of this project on 22-6-1996 has been produced to support the submissions. Also a consolidated assessment order in the years 1993-94 and 1994-95 in respect of the same company dated 27-8-1996 has been submitted for our perusal. In both of these assessment orders the assessee has been described as a Public Limited Company and the Revenue has not expressed any reservation against the claimed status. Learned counsel for the assessee however explains that earlier on 24-7-1997 while appearing before the Division Bench the then A.R. for the assessee Mr. Sarfraz Mahmood inadvertently remarked that the status of Kamalia Sugar Mills as a Public Company had favourably been decided by the I.T.A.T. According to the learned counsel the A.R. for the assessee at the relevant time only submitted that the Revenue had accepted a similar claim in respect of another concern being managed by the Board. The submission as recorded in the order sheet that the Lahore Bench of the Tribunal had decided the issue of status in favour of M/s. Kamalia Sugar Mills Limited was, therefore, not correctly recorded due to some misunderstanding.

14. Learned standing counsel for the Revenue Rana Munir Hussain, Advocate on his turn resists both the objections. He states that the respondent having once withdrawn the objection against maintainability as recorded on 24-7-1997, it cannot raise the same objection again. Also relies upon the same Circular of the Commissioner of Income Tax Companies, Lahore dated 5-1-1992 which was noted in that order whereby the appellant I.A.C. was allowed to exercise the powers of D.C.I.T. in respect of certain cases including that of the assessee. Learned counsel also opposes the idea that the P.I.D.B. should be taken for Government of Punjab for the purpose of the First Schedule. It is stated that established norms of interpretation of fiscal statute do not allow the placing of such an interpretation on clear words as used to describe a public company for the purpose of the Schedule. To support the contention he relies upon PLD 1991 SC 630 re: Collector of Customs and others v. Muhammad Mahfooz. In that case their Lordships of the Supreme Court held that while construing fiscal statutes one must read words and interpret them in the light of what was clearly expressed and should not rely upon meanings which are not express but are implied.

15. Learned Standing Counsel also avers that mere fact that the P.I.D.B. was created by way of the above Act is sufficient to prove that it is independent of the Government of Punjab irrespective of the status of the persons nominated on the Board or generation and end destination of funds provided by the Government of Punjab. The word "Government" is explained in terms of the ratio of the reported decision cited as PLD 1975 Lah. 819 re: Master Khusrow Amir Khan Niazi and PLD 1966 Lah. 446, re: Begum Tahira Fazal Ahmed v. Home Secretary, Government of West Pakistan. In the first case it was held that word "Government" in its ordinary connotation includes legislative, judicial and executive functions. In the second case their Lordships of the Lahore High Court cited with favour the meanings of the word "Government" as explained in Black's Law Dictionary, Third Edition. It was among other things described as "the whole class or body of office holders or functionaries considered in the aggregate upon whom devolves the executive, judicial, legislative and administrative business of the state". Also relies upon a decision of the Tribunal reported as 1986 PTD 873 wherein it was found that a body set up under a statute as a limited company cannot-be held to be a Government. Another judgment of the Tribunal recorded in respect of Flour Milling Corporation reported as 1997 PTD (Trib.) 1435 is referred in support of the submission that the Corporation created as a result of the statute was held not to be to a part of the of Provincial Government. Another decision cited as 1990 PTD 889 re: Republic Motors v. I.T.O. and others is referred wherein the Revenue reopened the case of the assessee corporation M/s. PACO Limited on the ground that the assessee not being an organ of the State the earlier status of public company assigned to it was not in accordance with law. Rana Munir Hussain, learned Standing Counsel confidently claims that in view, of three recent judgments of the Tribunal cited as 1996 PTD (Trib.) 25, (1993) PTD (Trib.) 110 and 1996 PTD (Trib.) 1117 the issue in hand has finally been resolved in favour of the Revenue and against similar companies/corporations claiming to be Government in terms of the said definition.

16. We will agree. The issue of status of Companies and Corporations established by the Federal or Provincial Governments appears settled. It is perhaps for that reason that the learned counsel for the assessee has placed more stress on the alleged preliminary objection against competency of the appeals. It will be seen that the order recorded in the case of M/s. Pak-Arab Fertilizer Limited v. ITO (supra) was based upon another order recorded by Division Bench at Karachi now reported as PLD 1997 Lah. 36. However, the learned Division Bench deciding the case of M/s. Pak-Arab Fertilizer (supra) overlooked the important distinctive feature on the basis of which the Division Bench at Karachi found in favour of the assessee. That was a case of taken over industry. The governing legislation being the relevant provisions of Economic Reforms Order, 1972. The learned Division Bench at Karachi noted that explanation to Articles 7-E and 7-F of the Order created a fiction of majority ownership or controlling voting right as well as controlling interest in favour of the Federal Government not only in the establishment created or to be created to manage these industries but also in the taken over industries themselves. It was on the basis of this fiction that the assessee a taken-over industry was held to be entitled to status of public company for the purpose, of First Schedule to the Ordinance. No such fiction exists in the case of the assessee before us nor, as rightly pointed out by the learned Standing Counsel that Punjab Industrial Development Board could be treated either as Government of Punjab or one of its departments. The submission is also supported from a recent judgment of the Lahore High Court in re: Punjab Small Industries Ltd v. D.C.I.T. 1995 PTD 431.

17. The meaning of the word "Government" as explained in the above referred two cases do not leave any room to make a guess in favour of the assessee Board. The use of word "Government" in the definition clause cannot be extended to include bodies created by Provincial or Federal Statutes or incorporated as companies by these Governments. The accepted rules of interpretation of fiscal statutes do not permit us to restrict or enlarge the meaning of express words used in the statute. In the case re: Rahe Manzil Transport (supra) relied upon by the assessee to support its interpretation of the words "proceedings" their Lordships of the Karachi High Court observed that "nothing is to be implied in statutes or documents which is inconsistent with words expressly used". If the Legislature had intended to include the institutions through which the Federal or Provincial Governments are holding equities in companies or corporations created by them, nothing was easier to say so in so many words. The Legislature appears to have restricted this concession or rebate in super-tax only to the companies and corporations directly owned by them and not to those which are so owned by them through the medium of intermediary companies or corporations. Also, inclusion of Government -owned corporations and companies will operate to discriminate against other assessees and even the rest of the beneficiaries listed in the said clause which defines public company. For such reason in re: Union Council Ali Wahan Sukkar v. Associated Cement Private Limited 1993 SCMR 468 the Supreme Court disapproved the claim of exemption from levy of income-tax preferred by Government-owned corporations engaged in commercial activities and competing with other public or private companies.

18. As stated earlier the issue in hand as far this Tribunal is concerned, stands finally determined. In the first reported decision 1993 PTD (Trib.; 1100 the assessee company claimed the status of a public company on the ground that its 51.57 per cent. shares were held by another company which was wholly owned by the Federal Government. The department contested the claim on the ground that with the addition of Article 165-A in the Constitution of Pakistan the concept of a Government-owned legal entity being an instrument of the Government had ceased to exist. Ch. Irshad Ahmad, Judicial Member while speaking for the Division Bench at Islamabad considered a number of cases from the superior Courts including the judgment of the Supreme Court in re: C.B.R. v. SITE (supra) and of the Lahore High Court in West Pakistan Road Transport Board v. CIT reported as 1973 PTD 499. Also specific mention of the said order of the Division Bench at Lahore dated 17-4-89 in re: Pak-Arab Fertilizer was made. After taking into

account the arguments advanced for the assessee particularly its reliance upon such cases re: C.B.R. v. SITE and PIDB v. C.I.T. the learned Judicial Member at page 1104 of the report remarked:

"The holding of the Supreme Court and for that purpose any jurisprudential rule woes not lay down that a company owned by a Government shall for all purposes be deemed to be a Government Department. The Supreme Court explained that "in a controversy like the present one the final decision would rest on the facts and circumstances of the case". On facts the Supreme Court found that the company in that--- case was carrying on the functions of industrial development on behalf of the Provincial Government and the income of that company in fact was destined to be the income of the Province. In the case before us it is no one's case that the assessee-company's income is the income of the Federation. If one accepts the prepositions that a company cent. per cent. owned by the Federal Government is a Government Department as contended by the assessee, then one has to accept that all the employees of such company are the Government servants, all the properties owned by that company are owned by the Government and all contracts made by that company will be made only by the President as required by Article 173 of the Constitution of Pakistan. No one will be ready to contend or accept the above preposition. After going through the judgment' of the Supreme Court and of Lahore High Court and persuing the jurisprudential principles we are of the view that the holding of the Supreme Court that a company or a Corporation owned by the Government shall be deemed be a Department of the Government was confined for the purposes of its immunity to tax granted by Article 165 of the Constitution. The broad contention that company owned by the Government shall be deemed to be the Government for all purposes including the definition of the company cannot be accepted."

19. The second reported decision on the subject 1996 PTD Note 34 at p.50 is also by a Division Bench at Islamabad. It was the appeal of the Revenue against the same assessee in respect of a later assessment year. The learned Division Bench followed the above-referred decision recorded by its counterpart at Islamabad. The third decision 1996 PTD 1117 was recorded by a Division Bench at Karachi which comprised of one of us, the Judicial Member. In that case the assessee company was being managed by M/s. Ghee Corporation of Pakistan. Here also the claim of the assessee to be treated as public company was rectified under section 156 and the first appellate authority maintained the order. On further appeal the submissions made by the assessee were repelled on the ratio of the first reported decision by the Division Bench at Islamabad.

20. In the presence of these decisions as said above, the issue stands resolved as for the Tribunal is concerned. The assessee having failed to challenge the reasons as well as the ratio settled in the above three cases we entertain no doubt that shares held by the Board in the assessee company cannot be taken to have been held by the Government as contemplated in the aforesaid definition of a public company. Also mere fact that in the earlier years the status of the assessee company was accepted as a public company or that in the case of another concern managed by the P.I.D.B. the Revenue had accepted the claimed status as a public company will not be of any significance. There is no estopple against law and one wrong cannot be acted upon as a precedent when it comes to give effect to the express words of a Statute.

21. The objection of the assessee against competency of the appeal as noted earlier is also not tenable. The provisions of section 5(1) (c) are so clear and obvious that we have not been able to find any trace of the assumed incompetency of the appellant I.A.C. before us. According to this provision the D.C.I.T. and I.A.Cs. are to perform their functions as conferred upon them under the Ordinance in respect of person or class of persons or such areas as directed by the Commissioner to whom they are subordinate. The provision further empowers and authorises the Commissioner to direct that the powers conferred. On D.C. I.T. in respect of any proceedings relating, to specified cases or class of cases shall be exercised by the I.A.C. After it has so been directed by the Commissioner any reference to D.C.I.T. for the purpose of such proceedings or cases or class of cases shall be deemed to be a reference to the I.A.C. Therefore, once a notification or an order under this section has been issued the IAC assigned with the job in relation to specific cases to areas shall by legal presumption be a D.C.I.T. and all references in the Ordinance to D.C.I.T. shall be so read. The notification dated 5-1-1992 issued by Commissioner of Income Tax Companies, Lahore as referred to in the earlier part of this order has not been challenged on any legal or factual ground. A copy of it-has been produced for our record. The appellant I.A.C. has been mentioned at Serial No.208 of this Notification inter alia empowered to have jurisdiction over the assessee under the aforesaid provision of law. Therefore on and from the date of such notification the I.A.C. Range-VI Companies, Lahore became a D.C.I.T. for all intents and purposes. To hold that the appellant I.A.C. could frame assessment and conduct all other proceedings except filing of an appeal, as suggested by the learned counsel for the assessee would be anomalous. According to him it would still be D.C.I.T. who is competent to tile an appeal. However, the learned counsel has not identified as to which D.C.I.T. is competent to file an appeal after the jurisdiction has been transferred and assigned to an I. A. C.

22. The restricted interpretation of the words "proceedings as used in section 5(1.) (c) of the Ordinance is also not acceptable. In the first case relied upon by the learned counsel re: Rahe Manzil Transport and others (supra) after a difference of opinion the resolving Judge held that word "proceedings" as used in section 6(e) of the General Clauses Act (X of 1897) included proceedings in suit, appeal or execution. This section of the General Clauses Act in which the word "proceedings" was used it may be noted, pertained to effect of repeal of a Central Act or Regulation. In the second case re: Chiragh Muhammad (supra) a learned Single Bench of the Lahore High Court was interpreting the word "proceedings" as used in section 6 of the Limitation Act. This section relates to kinds of exceptions or extensions allowable in limitation to persons under legal disabilities. Therefore, for obvious reasons the use of word "proceedings" was held not extendable to appeals, None of the two cases accordingly support the submission of the learned counsel for the assessee that the I.A.C. directed to do the job of D.C.I.T. "could conduct only proceedings" which did not include appeal' proceedings. It is, on the other hand, established beyond any shadow of doubt that appeals are merely a. continuation of original proceedings. The Supreme Court of India in re: Garikapati Veeraya v. N. Subbiah Chaudhary PLD 1957 SC (Ind.) 448 held that "an appeal is legal pursuit of a remedy. A suit, appeal and second appeal are really steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding". Their Lordships of the Supreme Court of Pakistan approved the ratio so settled in re: C.B.R. v. Chanda Motors reported as 1992 PTD 1681. Earlier in PLD 1964 SC 125 -re: F.A. Khan v. Government of Pakistan the Supreme Court of Pakistan reiterated the legal position that original and appeal proceedings were steps in one proceedings. Same were the findings recorded by Karachi Bench of West Pakistan High Court in re: Flour Mills Employees Union, Karachi v. Steam Roller Flour Mills cited as PLD 1964 (W.P.) Kar.584. The legal position with regard to proceedings and their continuation till appellate forum being totally settled, we find no reason to hold otherwise.

23. The proposition that an appeal filed by an incompetent person is liable to be rejected at the threshold, in limine, is not at all disputed. However, the extension of the principle to the appeal filed by an I.A.C. in the facts before us cannot be approved. The provisions of Section 5(1) (c)' have created a clear and an unambiguous presumption that after issuance of an order by the Commissioner all references to D.C.I.Ts shall be deemed to be references to I.A.Cs. The presumption so. created being well within the power of the Legislature there appears no reason to refuse its implementation in letter and spirit. The principle is that interpretation should be preferred which makes a system workable. If as proposed by the learned counsel the I.A.C. directed to perform the functions is not competent to file an appeal, for this purpose alone the jurisdiction will have to be changed and a D.C.I.T. will have to be called in. Thereafter, when the appeal has been filed another notification will have to be issued to re-invest the I.A.C. with the powers as contemplated in section 5(1)(c). This will make the machinery unworkable. The use of words "and for the purpose of any proceedings in respect of such cases" in section 5(1)(c) are so clear that kind of interpretation as being pressed by the learned counsel cannot be considered to be a serious reading of the letters of law. The appellant I.A.C. was conferred with the jurisdiction to exercise all the powers of D.C.I.T. in respect of the case of the assessee on 5-1-92 while these appeals were preferred on 2-4-92. These were therefore filed by a person who was competent in law and in fact. The objection in this regard accordingly stands rejected.

24. The imagined line of distinction drawn between the words "powers" and "functions" also appears far-fetched as for the interpretation of the aforesaid provision is concerned. Further submission that a D.C. I.T. being a persona designate in section 134(2) of the, Ordinance his functions could not be performed by an I.A.C. is also devoid of any force. A persona designata according to Black's Law Dictionary, 5th Edition, page 1029 means "A person pointed out or described as an individual as opposed to a person ascertained as a member of a class or as filing a particular character". Same definition of the term appears in "A Concise Law Dictionary" by P.G. Osborn, 5th Edition at page 240. In the light of these meanings if a D.C.I.T.is a persona designata then after issuance of a notification or order under section 15(1)(c) the I.A.C. stepping into the shoes of the D.C.I.T. also becomes an equal persona designata. Once the C.I.T. has decided to object to an order passed by an A.A.C. he is competent to make a direction to the person entrusted with the jurisdiction to file appeal be it a D.C.I.T., or an f IAC notified for this purpose under section 5(1)(c). The kind of lack of competence to file an appeal by an I.A.C. on the supposed interpretation of the words functions and powers is not seen anywhere nor is reasonably deduced from the words of the statute. This objection too shall, therefore, be rejected.

25. Both the objections having been decided in favour of the Revenue, these departmental appeals shall now be listed for decision on facts before any available Bench and per roster arrangement.

M.B.A./404/Trib.Order accordingly.