HAJI MEHR DIN VS COMMISSIONER OF INCOME-TAX, ZONE-A, LAHORE
2002 P T D 541
[Lahore High Court]
Before Naseem Sikandar and Mansoor Ahmad, JJ
Haji MEHR DIN
versus
COMMISSIONER OF INCOME-TAX, ZONE-A, LAHORE
C.T.R. No.59 of 1998, decided on 25/06/2001.
(a) Income Tax Appellate Tribunal Rules, 1981---
----R.14----Grounds which may be taken in appeal---Additional ground-- Appellate Tribunal refused to entertain the additional ground for the reason that the issue in respect of such ground had not been raised in the memo. of appeal---Validity---When a lis is pending before a Court or a judicial forum, entertainment of an additional ground should be a rule and not an exception---Unless the purpose for making of additional ground is either to delay the proceedings or to cause embarrassment to the parties or the Presiding Officer an additional ground must not be refused provided, it is made or raised before conclusion of hearing---Fact that a ground of appeal was not taken in the original memo. of appeal would not amount, to acceptance of the assessment to that extent-- Refusing a ground to challenge the addition betrays an avoidance on the part of the Tribunal to rule upon the issue---Rules of procedure are meant to advance the cause of administration of justice rather than to thwart the same---Technicalities should never undermine the advancement of purpose for which judicial or quasi judicial forums arc established by law---Refusal of audience by Tribunal was an extreme step, it should not normally be resorted to as a matter or course ---Appeal shall be deemed to be pending and will be decided on merits it circumstances.
Manager, Jammu and Kashmir State Property in Pakistan v. Khuda Yar and another PLD 1975 SC 678; Cannon Products Ltd. And others v. Income-tax Officer and others 1985 PTD 549; Pakistan Industrial Gases Ltd. v. CIT and another 2000 PTD 2903 and CIT v. Muhammad Tariq Javaid 2000 PTD 2165 rel.
(b) Income-tax Appellate Tribunal Rules, 1981---
----R.14---Grounds which may be taken in appeal---Memorandum of appeal---grounds---Purpose.
(c) Income-tax---
---Rules of a Court or Judicial forum---Interpretation of---Principles:
Petitioner in person.
Kh. Muhammad Saeed for Respondent.
Date of hearing: 25th June, 2001.
JUDGMENT
NASEEM SIKANDAR, J.---At the instance of an individual assessee, the Lahore Bench of the Income-tax Appellate Tribunal has stated the following question of law for our opinion under section 136(1) of the Income Tax Ordinance, 1979:
"Whether on facts and in the circumstances of the case the Tribunal was right in refusing to entertain the additional ground which challenged the validity of the addition under section 13(1)(d) of the Income Tax Ordinance, 1979 did not need further investigation of facts and could be decided on material already on record?"
3.For the assessment year 1981-82 original assessment in respect of the assessee was framed under section 62 of the Ordinance, 1979 by taking his share at Rs.8,372 in the registered firm namely Messrs Noorani Corporation. The firm was engaged dealing in cloth on wholesale basis. Subsequently his case was re-opened under section 65 of the Ordinance, 1979 after it was found that he was maintaining a Bank account which was not disclosed to the Revenue and which indicated transactions amounting to Rs.11,48,950 during the period relevant to the year. After re-opening of the assessment and while computing total income at Rs.1,41,372 the Assessing Officer made an addition of Rs.50,500 under section 13(1)(d) of the Income Tax Ordinance, 1979. Earlier it was found that the declared 1/2 share in the shop purchased during the period at Rs.9,500 was grossly understated. The value of the shop was accordingly taken at Rs.1,20,000 and after llowing the benefit of the declared value the balance at Rs.50,500 was added towards the income as his share of the investment.
3. Learned First Appellate Authority found the estimated value to be reasonable and, therefore, refused to interfere.
4. On further appeal the Tribunal declined to entertain the challenge taken in the form of additional ground to assail the said addition of Rs.50,500. It was observed that on objections to the aforesaid addition in the form of additional ground could not be permitted as the issue had not been raised in the memo. of appeal. Thereafter, at the request of the assessee the aforesaid reference was made.
5. We have heard the assessee as also the learned counsel for the respondent. Rule 14 of the Income-tax Appellate Tribunal Rules, 1981 provides as under:---
Ground which may be taken in appeal.---The appellant shall not except by leave of the Tribunal, urge or be heard in support of any ground not set forth in ,the memorandum of appeal; but the Tribunal in deciding the appeal shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule:
Provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby had a sufficient opportunity of being heard on that ground.
6. A glance at the rule indicates that the view adopted by the Tribunal while refusing to entertain additional ground was not justified. The word "additional ground" itself implies that a ground not already taken was being stressed. There could be a number of reasons for not taking a ground in the memo. of appeal despite its availability. It can start from inadvertence to end at negligence. Whatever be the reason when a lis is pending before a Court or a judicial forum, entertainment of an additional ground should be a rule and not an exception. Unless the purpose for making of additional ground is either to delay the proceedings or is to cause embarrassing to the parties or the Presiding Officer an additional ground must not be refused provided, it is made or raised before conclusion of hearing. Even in cases where a hearing is complete but the order is not announced an additional ground should not ordinarily be refused except for the reasons noted above.
7. The purpose of stating grounds in a memo. of appeal is only to identify the issues both for the purpose of arguments as well as a notice to the adversary. Another purpose for taking grounds in the memo. is a kind of expression by the appellant to assail the impugned order to the H extent and in the manner taken in the grounds. As the aforesaid rule 14 of the Income-tax Appellate Tribunal Rules, 1981 indicates, its power to decide is not confined to the grounds set forth in a memo. of appeal or even taken by its leave.
8. Since on appeal the whole of the matter is thrown upon it should always be considered in the interest of justice to allow an appellant every possible objection available to the impugned order so that the matter in issue comes to end once for all. The preciser a ground of appeal the better. However, here again some allowance has to be given for the personal style and diction of the individuals reducing them in writing. An assessee should not be punished for the peculiar method in which his legal adviser couches them. A memo. of appeal if found argumentative does not cease to be so. If it is in the nature of written arguments, then the office of the Tribunal is competent to return it with an objection. It can also be done by the Tribunal at the time of arguments and a contumacious appellant can always be denied audience if she refuses to comply with the direction either trade by the office or the Tribunal itself.
9. In the present case the reasons for which the additional ground was refused appears too narrow and restrictive interpretation of the aforesaid rule of the Tribunal. To say that an additional ground could be filed only when the issue had already been agitated in the memo. of appeal sounds Greek to us. If an issue had already been agitated in the original grounds of appeal, then any additional objection on the same issue would rather be an argument and not a ground of appeal. Perhaps the learned Single Member of the Tribunal mixed up the concept of at argument or a reason to assail a finding as distinguished from the ground on which a ruling against the order of a lower forum is sought. Generally, a ground of appeal is a moot point on which a party claims legal infirmity in the order of the lower forum. An argument on the other hand is the rationale which supports the ground and by process of logical deduction influences the mind of the arbiter for or against the judgment which is subject-matter of appeal.
10. The omission to challenge the aforesaid addition was apparently due to an inadvertence because in the total income computed for the year the aforesaid addition was the direct result of the increase therein. In any case the fact that a ground of appeal was not taken in the original memo. of appeal did not amount to acceptance of the assessment to that extent. Refusing a ground to challenge the aforesaid addition betrays an avoidance on the part of the learned Tribunal to rule upon the issue. The rules of procedure are meant to advance the cause of administration of justice than to thwart it. These technicalities should never undermine the advancement of purpose for which judicial or quasi-judicial forums are established by law. Every kind of such technicality can even be ignored if directly of indirectly it hindres the process of justice or due relief to which a party is found entitled to. The Hon'ble Supreme Court of Pakistan while considering the place of these technicalities in the administration of justice observed that laws some time are called an ass, but the Judge should, as far as possible, try not to become one. This view of the Court is stated in re: Manager, Jammu and Kashmir State Property in Pakistan v. Khuda Yar and another PLD 1975 SC 678. The apex Court in that case reiterated that mere technicalities should not be allowed to defeat the ends of justice and a departure could justifiably be made if required by the circumstances of the case.
11. The place of rules in a judicial system is mare to provide strength and support rather to demolish or destruct it. While interpreting the rules of a Court or a judicial forum it is all the more necessary that these should be soon in the perspective of the purpose or the reason for the creation of the-forum and to advance its effectiveness rather than to discourage a petitioner at the threshold. The interpretation of the rules of a Court or Judicial forum is totally different from the Rules by which the administrative wings of the State proceed to curb crime, regulate the conduct of a particular relationship between the citizens or ensures peace tranquillity, franchise, enjoyment of civil liabilities-etc. The rules of a Court or a judicial forum must have only one aim it is that the person approaching seek justice must be facilitated and the rules of Count or procedure should not be used against him unless he is contumacious and attempts to employ them against his adversary or to destroy the credibility of the forum itself. If a person charged with a simple crime to felony can be the most favourite child of law then why an assessee should not be facilitated in his defence against revenue. A person contributing a single, peny to the exchequer but contesting the remaining paund deserves more respect than a person who will be acquitted of killing a human being merely for some minor discrepancy in the evidence here and there.
12. A negative and restrictive interpretation of rules of the Court or a Judicial Tribunal in fact abridges the right of an appellant conferred by a statute. In re: Cannon Products Ltd. and others v. Income-tax Officer and others 1985 PTD 549 their Lordships-were of the view that the rules could not take away or abridge a right conferred by the relevant statute. Also that a rule could be struck down if it is found to be arbitrary or unreasonable. In a recent judgment while interpreting various rules of the Income-tax Tribunal a Division Bench of this Court in re: Pakistan Industrial Gases Ltd. v. CIT and another 2000 PTD 2903 disapproved the dismissal of appeal by the Tribunal for the reason that memo. of appeal contained arguments which was violative of rule 10 of the said Rules. In another recent judgment in re: CIT v: Muhammad Tariq Javaid 2000 PTD 2165 this Court observed that in matters of collection of revenue the dispute should not be allowed to be determined in a perfunctory manner as had been done by the Tribunal. In that case the Tribunal proceeded to dismiss a Departmental appeal on the ground that that certified copy of the impugned order was not attached with the memo. of appeal.
12-A. Since the refusal of audience by a Judicial, Tribunal is an extreme step, it should not normally be resorted to as a matter of course. E The Tribunal in this case having done thesame in a casual manner, our answer to the question is in the negative.
13. Resultantly, the appeal of the assessee/petitioner to the extent of impugned addition under section 13(1)(d) of the Income Tax Ordinance, 1979 shall be deemed pending and will be decided on merits after allowing the assessee an opportunity of being heard.
C.M.A./M.A.K./M-943/LQuestion answered in negative.