ILYAS FOUNDRY WORKS, LAHORE VS COMMISSIONER OF INCOME-TAX, ZONE, LAHORE, 2002 PTD-LAHORE-HIGH-COURT-LAHORE 2546 (2001)

Income Tax Ordinance (XXXI of 1979)---

---S.136---Reference to High Court---Absence of assessee---Effect---In absence of assessee at whose instance the questions had been referred, High Court declined to answer the questions---Reference was disposed of accordingly.

Dada Bhai H. Mama & Sons Karachi v. Commissioner of Income Tax (1967) 16-Tax 43 and M.M. Ispahani Ltd. v. Commissioner of Excess Profits Tax West Bengal (1995) 27 ITR 188 fol.

Nemo for Petitioner.

Muhammad Ilyas Khan for Revenue.

ORDER

NASEEM SIKANDAR, J.---The Lahore Bench of the Income-tax Appellate Tribunal has framed the following questions for our consideration and reply:

(i) Whether any established yard stick/principle has been adopted in estimating sales so exorbitant, if not, on what basis sales have been estimated?

(ii) Whether Income-tax Tribunal was justified in law in segregating the part of statement of assessee qua G.P. rates which were on higher side and favourable to Department and rejecting the order part qua the sales declared by assessee and favourable to him being an act contrary to law, equity and principles of judicial procedure?

2. Learned counsel for the Revenue by relying upon a reported judgment of a Division Bench of the Karachi High Court in re Dada Bhai H. Mama & Sons Karachi v. Commissioner of. Income Tax (1967) 16 Tax 43) states that in absence of the assessee at whose instance the aforesaid questions were referred, no opinion can be expressed by this Court.

3. In the said judgment their Lordships interpreted the provisions of section 66(5) of the Income-tax Act, 1922 which are similar to section 136 of the Income Tax Ordinance under which the aforesaid questions have been referred to us. In the view of their Lordships the obligation of the High Court to decide the questions of law referred to it was contingent upon the hearing of the case. Further that the hearing of the case could not be made unless the party at whose instance the questions had been referred to the Court was present and had argued its case. Therefore, their Lordships found that they were not bound to answer the questions referred to it if the party at whose instance the questions had been referred, had remained absent. Reference in that respect was made to a decision of the Calcutta High Court in Re: M.M Ispahani Ltd. v. Commissioner of Excess Profits Tax, West Bengal (1995) 27 ITR 188).

4. Being in respectful agreement with their Lordships in absence of the assessee at whose instance the above questions have been referred, we will decline to answer and dispose of the reference accordingly.

Q.M.H./M.A.K./I-122/L

Answer to reference declined