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

----S.131(4)---Admission of documentary evidence in Appellate Forum-- Notice under Ss.56 & 61 were issued by the Assessing Officer---No one attended on due date---Subsequently explanations without any documentary evidence were furnished---Document4ry evidence was produced for the first time before Appellate Forum---First Appellate Forum admitted the evidence---Validity---Appellate Authority was not competent to receive documentary evidence at appellate stage in the circumstances.

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

----Ss.56 & 61---Issuance of notices under Ss.56 & 61 of the Income Tax Ordinance, 1979 would not be illegal when no response was made by assessee after issuance of notice under S.56 of the Ordinance.

1987 PTD (Trib.) 325; Star Rolling Mills v. C.I.T. 1974 PTD 200; M/s. Dhanarjamal Manumal & Sons v. C.I.T. 1985 PTD 33; Bean H. M. Inspector of Taxes v. Doncaster Amalgamated Colling Ltd. (1946) 27 TC 296; Industrial Management Limited, Karachi v. C.I.T. PLD 1978 Kar. 673; M/s. Sultan Textile Mills Limited v. C.I.T. 1990 PTD 241 and Mrs. Yasmeen Lari v. Registrar, Income-tax Appellate Tribunal 1990 PTD 967 ref.

Tariq Mehmood for Petitioner.

H. Shakeel Ahmad for Respondent.

Date of hearing; 4th March, 1998.

JUDGMENT

JAVED IQBAL, J.---This is an application preferred on behalf of Memoona Ahmed (petitioner) under section 136(2) of Income Tax Ordinance, 1979 (hereinafter referred to as the Ordinance) against refusal of Tribunal to refer the question involved in the matter and for decision of said questions with the following prayer:

"It is accordingly respectfully prayed that this Honourable Court in its Advisory Jurisdiction may be pleased to answer the following questions: ---

(i) Whether notice issued under section 56 accompanied by notice under section 61 of Income Tax Ordinance, was illegal and consequently the whole proceedings were incompetently initiated.

(ii) Whether Tribunal was justified in holding that the A.E.C. was not justified in admitting the evidence for first time at the appellate stage. "

2. Briefly stated the facts of the case are that in pursuant to some information that petitioner had purchased property located at Mouza Kaichi Baig in sum of Rs.32,99,900, the Assessing Officer found that the petitioner has not filed any Return of Income for the assessment year corresponding to the Income Year for which the property was purchased. The learned Assessing Officer in said view of the matter issued notice under section 56 of the Ordinance, on 4-1-1995, but since there was no response from petitioner another notice under section 61 of the Ordinance was issued on 15-3-1995 followed by another notice under section 61 of the Ordinance, on 1-4-1995 with the direction that needful be done by 15-4-1995. On behalf of petitioner Mr. Kamal Hussain Siddiqui, the learned counsel stated in writing on 25-4-1995 that petitioner is an agriculturist and she made the investment of Rs.32,99,900 out of her income from Agricultural. But the said plea was not substantiated by any documentary evidence in spite of various opportunities arid consequently the learned Assessing Officer record ex parte assessment in view of provisions as contained in section 63 of the Ordinance. Being aggrieved the said order was assailed before the learned A.E.C. who reversed the order passed by learned Assessing Officer and consequently an appeal was filed by the Department before Income Tax Appellate Tribunal (Pakistan, Karachi) by whom the order of Assessing Officer was kept intact. The Tribunal also declined to refer the questions sought to be referred for advice to High Court, in view of the provisions as contained in section 131 (4) of the Ordinance, and the application moved in this regard was dismissed being frivolous and misconceived, hence this application under section 136(2) of the Ordinance.

3. It is mainly contended by Mr. Tariq Mehmood, Advocate that the order of Tribunal, dated 4-9-1997 whereby it has refused to refer the matter to this Court )s contrary to facts and law and, therefore, deserves to be set aside as the legal and factual position has not been appreciated in its true perspective which resulted in serious miscarriage of justice. It is next contended that the provisions as contained in sections 56 and 61 of the Ordinance, have been misinterpreted and misconstrued as by no stretch of imagination simultaneous notices can be issued under sections 56 and 61 of the Ordinance, and therefore, the entire proceedings are illegal and ab initio void, hence liable to be set aside. It is urged with vehemence that the learned Tribunal has not correctly interpreted the provisions as contained in section 139(4) of the Ordinance, while holding that no further interpretation is required from this Court in its Advisory Jurisdiction because the questions so formulated having important far-reaching effect require that same be dilated upon and decided by this Court while exercising its Advisory Jurisdiction. Mr. Tariq Mehmood, Advocate in support of his contentions has referred 1987 PTD (Trib.) 325 = 1995 PTD 752 and 1239.

We have carefully examined the respective contentions as adduced on behalf of petitioner in the light of relevant provisions of Income Tax Ordinance, 1979. It is an admixed feature of

the case that the learned Assessing Officer issued notice under section 56 of the Ordinance, on 1-1-1995 with specific direction that needful be done by 18-1-1995 but no response was known by the petitioner and in such view of the matter notice under section 61 of the Ordinance, was issued on 15-3-1995 followed by subsequent notice under section 61 of the Ordinance, on 1-4-1995 with the direction that compliance be made by 15-4-1995. It is worthwhile to mention here that no compliance was made till 15-4-1995 but position was explained on 25-4-1995 by the petitioner. The simultaneous issuance of notices under sections 56 and 61 of the Ordinance, at the best can be considered and irregularity on the basis whereof entire proceedings cannot be declared as null and void specially when no prejudice whatsoever has been caused to the petitioner. It is an admitted feature of the case and as mentioned above, that the conduct of petitioner never remained above board who has done her best to avoid the proceedings and failed to reply within the stipulated period and now an attempt is being made to flout the order passed by a competent forum with diligent application of mind and after having in depth scrutiny of entire material without any justifiable cause but on the basis of hyper technicalities. There is no denial to the fact that the learned Assessing Officer has done his best to have the explanation of petitioner regarding the transaction of land for a consideration of Rs.32,99,000 to know her income resources and at the first instance notice under section 56 of the Ordinance, was issued which followed the notices issued under section 61 of the Ordinance, because no reply was received for the notice issued under section 56 of the Ordinance The petitioner was afforded proper opportunity to offer his explanation regarding the question in issue who declined to avail it on one or the other pretext and nothing better could have been done in the peculiar circumstances of the case. It is quite amazing that when the petitioner submitted her explanation on 25-4-1995 no documentary evidence could be attached to substantiate the version and plea as agitated in the said explanation and at very belated stage and that too before Appellate Tribunal certain documents were filed and, thus, the Assessing Officer was deprived to exercise his jurisdiction in accordance with law and therefore, no option was available for the learned Assessing Officer to make an ex parte assessment order under section 63 of the Ordinance. It seems appropriate to reproduce here in below section 56 of Income Tax Ordinance, 1979 to appreciate the legal controversy in a better way: ---

"56. Notice for furnishing return of total income.---The Deputy Commissioner may, at any time by notice in writing, require any person who, in his opinion is chargeable to tax for any income year to furnish a return of total income for such year within thirty days from the date of service of such notice or such longer or shorter period as may be specified in such notice or as the Deputy Commissioner may allow."

5.A bare perusal would indicate that language as employed in the said section is free from any ambiguity and as such it does not require scholarly interpretation. A plain reading would indicate that the following powers have been conferred upon the Income Tax Officer and mode of exercising the same has been provided which can be mentioned as follows: ---

(a) Vast discretion has been conferred upon the Income Tax Officer forissuance of notice as the word 'may' has been used.

(b)No particular time has been specified for issuance of such notice.

(c)The notice must be in black and white.

(d)Such notice can be issued to any person whether such person is chargeable to tax or otherwise depends upon the opinion of Income Tax Officer.

(e)The Return shall be furnished within a period of 30 days, which shall be commenced from the date of service.

(f)The limit of 30 days can be curtailed or enhanced by Income Tax Officer.

Section 61 of the Income Tax Ordinance, 1979 is reproduced hereinbelow for ready reference: ---

"61. Notice for production of Books of Account, etc.---The Deputy Commissioner may serve upon any person who has furnished a return of total income for any income year, or upon whom a notice has been served to furnish such return, a notice requiring him on a date specified therein, to attend at the Deputy Commissioner Office or to produce, or cause to be produced, any evidence on which such person may rely in support of the return if furnished and such accounts, documents or evidence (including accounts or documents relating to any period prior or subsequent to the said income year) as the Deputy Commissioner may require:

Provided that the Deputy Commissioner shall not require the production of any accounts relating to a period more than three years prior to the income year."

The abovementioned provisions as contained in section 61 of the Ordinance, can be interpreted as follows: ---

(a)Issuance of notice to any person who has filed his return of total income earned for any year, which include the previous year as well.

(b)Such notice can also be issued to such person who has yet to file his Return subject to condition that he has been served with a nonce (Notice under section 56 of Income Tax Ordinance).

(c)Where notice has been issued and served under section 56 and there is no compliance a notice under section 61 can be issued as no bar whatsoever has been imposed in this regard.

(d)Such notice shall specify date for appearance to attend the office of Income Tax Officer.

(e)Production of evidence oral/documentary in support of return.

(f)Production of such evidence if so required by Income Tax Officer include Accounts or documents relating to any period prior or subsequent to the said income year.

6. In the light of analysis of the provisions as contained-in sections 56 and 61 of the Ordinance, as made hereinabove it can be inferred safely that the issuance of notice under section 61 of the Ordinance, would not be illegal where no response has been shown by the person concerned after issuance of notice under section 56 of the Ordinance. It does not depend upon the whims and wishes to furnish reply whenever so desired and Income Tax Authorities cannot be kept waiting for an indefinite period. In such circumstances where a notice has been served under section 56 of the Ordinance, and in absence of response for doing the needful a subsequent notice can be issued under section 61 of the Ordinance, and it cannot be equated to that of issuance of 'simultaneous notices under sections 56 and 61 of the Ordinance. We have focused our attention on the dictum laid down in 1987 PTD (Trio.) 325 which cannot be made applicable in this case as facts are totally distinguishable. It has also come on record and as discussed above that no documentary evidence could be furnished to the learned Assessing Officer and subsequently it was produced before the appellate forum by whom it was considered which cannot be held lawful for the simple reason that initially such evidence should have been produced before the learned Assessing Officer being competent Authority to exercise such material and take appropriate action which could not be taken due to non-furnishing of such documentary evidence by the petitioner for the reasons best known to her. It may not be out of place to mention here that such evidence is to be scrutinized by the Assessing Officer and without having such scrutiny and his opinion the same could not have been appreciated or scrutinized by the Appellate Forum as initially such function falls within the jurisdictional ambit of assessing Officer.

7. We are conscious of the fact as it is well-settled by now that "Rejection of accounts without any evidence and on the basis of conjectures and presumptions is a question of law for a finding of fact can also be challenged on the ground that there is no evidence to support such finding of fact or that the finding is based on conjectures, presumptions and irrelevant material--where the finding of the Tribunal clearly appeared to be based on surmises, conjectures and irrelevant material while the evidence brought on record by the assessee was completely overlooked, finding of the Tribunal involved question of law". (Star Rolling Mills v. C.I.T. 1974 PTD 200, M/s. Dhanarjamal Manumal & Sons v. C.I.T. 1985 PTD 33, Bean H. M. Inspector of Taxes v. Doncaster Amalgamated Colling Ltd. (1946) 27 TC 296, Industrial Management Limited, Karachi v. C.I.T. PLD 1978 Kar. 673; M/s. Sultan Textile Mills Limited v. C.I.T. 1990 PTD 241 and Mrs. Yasmeen Lari v. Registrar, Income-tax Appellate Tribunal 1990 PTD 967 ref.)". But no question of law is involved as the decision in question has not been made on the basis of surmises and conjectures. It is an admitted fact tat in spite of various opportunities the petitioner failed to portal her plea in a convincing manner. At the fast instance the petitioner avoid to attend the proceedings initiated by Assessing Officer and subsequently explanation without any documentary evidence was furnished and documentary evidence 'was produced before Appellate Forum which was not competent to receive it at appellate stage as it was violative of the provisions as contained in section 131(4) of the Ordinance, which runs as follows: ---

" 131. Procedure in Appeal.---(1) . . ... . . . . . . . . . . . . . . . . . .. . . . . . . . .......

(2) ...............................................................................

(3) ...............................................................................

(4) The Appellate (Additional Commissioner) shall not admit any documentary material or evidence which was not produced before (Deputy Commissioner) unless he is satisfied that the appellant was prevented by sufficient cause from producing such material or evidence before the Deputy Commissioner."

There is no denial that documentary evidence was produced at first instance before the Appellate Forum which was erroneously received and error so committed has rightly been rectified by the learned Tribunal. Absolutely no question of law is involved and, therefore, we are, not inclined to exercise our Advisory jurisdiction and accordingly the application is dismissed.

M.B.A./686/Q Petition dismissed.