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

----S.160(b)---Limitation---Computation---Excluding period of stay order granted by High Court---Validity---While computing period of limitation, under S.160(b) of Income Tax Ordinance, 1979, the time during which the proceedings were stayed by any Court, Tribunal or any other authority is to be excluded---Method or exclusion so provided is applicable to assessment and every other proceedings.

(b) Income Tax---

----Injunction---Order of interim injunction---Revenue matter---Life of stay order issued by High Court---Scope---No person can be allowed to use an injunction order issued at his request and in his favour against the adversary/opposite party---Irrespective of the legal position as regards the life of a stay order issued by High Court in revenue matters, no party to proceedings should suffer on account of an act of the Court.

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

----Ss.65 & 136(1)--Additional assessment---Limitation---Excluding period spent during interim injunction issued by High Court-- Assessment pertaining to the years 1981-82 and 1982-83 was completed ex parte---Authorities reopened the assessment under S.65 of Income Tax Ordinance, 1979 on 30-12-1987 or Appellate Authority partially allowed the appeal of the assessee while the Income-tax Appellate Tribunal annulled the additional assessment being time-barred---Validity-- Appellate Tribunal was not justified in annulling the additional assessments for the years 1981-82 and 1982-83 on 30-12-1987 under S.65 of Income Tax Ordinance, 1979---Order passed by the Tribunal was set aside with the result that appeal of the assessee would be deemed pending before the Tribunal to be decided- on merits.

Mian Yousaf Umar for Appellant.

Date of hearing: 2nd April, 2002.

JUDGMENT

NASEEM SIKANDAR, J.---This is a case stated by the Lahore Bench of the Income-tax Appellate Tribunal under section 136(1) of the Income Tax Ordinance. 1979 referring following question which is stated to have arisen out of their order recorded on 9-5-1992:---

"Whether on the facts and in the circumstances of the case the learned Tribunal was justified in annulling the additional assessment for the assessment years 1981-82 and 1982-83 framed on 30-12-1987 under section 65 of the Income Tax Ordinance, 1979 holding the same as time-barred"?

2. The respondent is an Advocate by profession. The assessments for the years 1981-82 and 1982-83 in his respect were completed ex parte in the first instance. However, subsequently these assessments were reopened under section 65. In the proceedings at followed some additions were made under section 13(1) of the Income Tax Ordinance, 1979. These assessments were challenged before CIT (Appeals) with partial success inasmuch as some relief was granted by the reducing amounts of addition etc.

3. On further appeal, a learned Single Bench of the Tribunal allowed the plea of the assessee that both assessments were barred by limitation under section 65(3-A) of the Ordinance, 1979 which required, framing of the assessments before the expiration of one year from the end of the financial year in which the notice under subsection. (I) of that section was served upon the assessee. According to the learned Member of the Tribunal there was no provision in the Income Tax Ordinance to exclude the period of stay given by the Superior Courts for the purpose of computation of limitation of period provided by section 65(3-A) of the Ordinance, 1979. Earlier it was noted that a notice under section 6i was served upon the assessee on 9-4-1984. He approached this Court and the proceedings before the Assessing Officer were suspended on his request on 25-5-1986. That injunction order was vacated on 16-2-1987 and the assessments were framed on 30-12-1987. According to the learned Member the assessments had to be framed on or before 30-3-1987, which having not been done, were found to have been barred by limitation, and therefore, annulled. Therefore, at the request of the Revenue, the aforesaid question was framed and referred.

4. After hearing the learned counsel for. the parties we will at once agree that the observation of the learned Single Bench of the Tribunal that Income Tax Ordinance did not provide for any exclusion of period of stay given by the Superior Courts for the purposes of the aforesaid section is not a correct statement of law. The provisions of section 160(b) of the Ordinance are explicit and clear. These provide that while computing period of limitation the time during which the proceedings were stayed by any Court, Tribunal or any other authority shall be-excluded. The method or exclusion so provided is applicable to assessment and every other proceedings. There is nothing in the provision or for that matter in any other provisions of the Ordinance which can possibly support the view of the learned Member that the exclusion clause under section 160(b) is not applicable to the limitation prescribed in section 65(3-A) of the Ordinance.

5. Admittedly the proceedings in this case remained stayed from 25-5-1986 to 16-2-1987 which in all comes to about nine months. If that period is excluded from the bar of limitation provided in section 65(3A), the assessments framed on 30-11-1987 were clearly within the prescribed limitation. The contention of the learned counsel for the assessee that only a period of six months for which a stay-by this Court can remain in currency under Article 199 (4-A) of the Constitution of Islamic Republic of Pakistan, 1973 is possible is hardly of any avail. Even if that be so the exclusion of six months from the limitation expiring on 30-6-1984, still makes the assessments to be within time. Secondly a person cannot be allowed to use an injunction order issued at his request and in his favour against the adversary/opposite party. Irrespective of the legal position as regard the life of a stay order issued by this Court in revenue matters, no party to proceedings should suffer on account of an act of the Court.

5. That being so for various reasons stated above, we will hold that the learned Tribunal was 'not justified in annulling the additional assessments from the years 1981-82 and 1982-83 on 30-12-1987 under section 65 of the Income Tax Ordinance, 1979.

Resultantly, the appeal of the assessee shall be deemed pending before the Tribunal to be decided on merits:

Q.M.H./M.A.K./C-159/LOrder accordingly.