Income Tax Ordinance (XLIX of 2001)---

----S. 133(1)---Income Tax Ordinance (XXXI of 1979), Ss. 52/86, 50(3-A), 12(5), 80-AA & 156---Reference to High Court---Assessment framed under Ss.52/86 of the Income Tax Ordinance, 1979 was annulled by the First Appellate Authority being barred by time as the same was to be made within a period of four years as prescribed under S.156 of the Income Tax Ordinance, 1979--Action of the First Appellate Authority was confirmed by the Appellate Tribunal---Question for reference to High Court as to whether Appellate Tribunal was justified in maintaining the annulment of order despite the fact that no period of limitation had been prescribed for initiation/completion of action under Ss.52/86 of the, Income Tax Ordinance, 1979---Validity---Proposed question of law did not appear to be a question of such a nature as necessarily required reference to High Court for decision, since similar reference had already been specifically answered by the superior Courts---Settled and answered proposition need not to be referred again for decision---Appellate Tribunal declined to make reference to High Court and reference applications stand refused.

1999 PTD (Trib.) 3357 and 1996 PTD (Trib.) 65 ref.

(1961) 4 Tax 96 and 2002 PTD 14 rel.

Abdul Jaleel, D.R. for Applicant.

Irfan Khan for Respondent.

Date of hearing: 22nd April, 2003.

ORDER

The department, through these applications, has sought for making a reference on the following proposed question of law stated to be arising out of the order, dated 26-9-2002 passed by the Tribunal in I.T.As. Nos. 1138/IB to 1147/IB of 2000-2001:--

"Whether on the facts and in the circumstances of the case the learned ITAT was justified in maintaining the annulment of order under section 52/86 of the Income Tax Ordinance, 1979 by the CIT(A) for assessment year 1991-92 to 1994-95 despite the fact that no period of limitation has been prescribed for initiation/completion of action under section 52/86 of the aforesaid Ordinance?"

2. Hence the applicant/department required the Tribunal in terms of subsection (1) of section 133 of the Income Tax Ordinance, 2001 for drawing up statement of the case and for referring the above question of law to the Honourable High Court for decision.

3. We have heard learned representatives of parties and have perused the respective orders.

4. Briefly the relevant facts are that the assessee-Company was incorporated as "an unlisted public limited" having main business activities in the nature of providing cellular/mobile telephone facilities in utilizing Public Switching Telephone Network (PSTN) and against whom a report was received about certain payments to have been made to Messrs Ericsson Radio System A.B. Sweden on account of fee for technical services labelled by the assessee-Company as "Services and Subscription Fee". The tax under section 50(3A) was reported to have not been withheld/deposited in the Government treasury. The Assessing Officer in consequence to the said information issued letters to the assessee-Company for explaining its position and also issued notice under section 144. According to Assessing Officer, the information submitted by the assessee-Company in response to the said notice was inadequate and was not including particulars of all the payments made from time to time under the suppliers credit agreement. Therefore, a final show-cause notice under section 52 of 1986 of the then Income Tax Ordinance, 1979 (hereinafter called the Ordinance) was issued and AR of the assessee made a reply thereto. However, the Assessing Officer adjudged the assessee-Company as assessee in default for failure to deduct tax under section 50(3A) read with section 12(5) and section 80AA of the Ordinance and imposed tax under section 52/86 as per calculation given in the assessment order: Thereafter, the assessee preferred appeals before the first appellate forum and the learned Appeal Commissioner while order, dated 2-4-2001 annulled the assessments for the years 1991-92 to 1994-95 (the years under present reference) and also set aside the orders of the Assessing Officer for the assessment years 1995-96 to 2000-2001 through said combined order. The department, feeling aggrieved with the said action of the learned Appeal Commissioner, came up in appeals before the Tribunal and the Tribunal vide order, dated 26-9-2002 in respect of appeals for the assessment 1991-92 to 1994-95 maintained the action of learned Appeal Commissioner of annulment of assessments. The relevant para. 8 of the order of the Tribunal is reproduced as under:--

"The learned DR during the course of arguments contended that the action of the learned Appeal Commissioner was not justified and was without any cogent reasons and the action of Assessing Officer was proper in the circumstances of the case. However, he could not advance any plausible and cogent reasoning to establish that the action of the learned Appeal Commissioner was not justified. On the other hand, the learned AR contended that the learned Appeal Commissioner has rightly annulled the assessment for the assessment years 1991-92 to 1994-95 which was to be made under section 52 of 1986 within a period of four years as prescribed under section 156 of the Ordinance. In this respect, the learned AR referred case-law reported as 1999 PTD 3357 (Trib.) to support his contention that the action taken under section 56 of 1986 for the assessment years 1991-92 to 1994-95 was barred by the time. He also referred another case of Full Bench of the Tribunal reported as 1996 PTD (Trib.) 65 to strengthen his stand in that regard. The learned DR could not rebut the said contentions of the learned A.R. As the decision of the learned Appeal Commissioner was based on case-law quoted above, therefore, while finding no contrary case-law to the said proposition, we hold that the` action taken by the learned Appeal Commissioner was proper in the given circumstances of the case."

5. The Tribunal resultantly rejected the appeals of the department. Now the department has filed these reference applications for referring the above stated proposed question of law to the Honourable High Court.

6. The learned DR in the course of his arguments that the question of law proposed by the department was arising out of the order of the Tribunal because there was no limitation prescribed for taking an action under section 52 of 1986 of the Ordinance and that the provisions of section 52 of 1986 were independent provisions than that of other assessment provisions and hence the action of learned Appeal Commissioner for annulling assessments on that score and subsequent maintaining of said action by the Tribunal was giving rise to the said question requiring for a decision by the Honourable High Court.

7. On the other hand, the learned AR vehemently repelled the contentions of learned DR and argued that the Tribunal in the order, dated 26-9-2002 has not given any judgment of its own and has in fact followed the earlier decisions of the Tribunal through which the stand of the assessee was accepted and the action of the learned Appeal Commissioner being in line with the earlier decisions of the Tribunal was maintained. In this regard, he referred the relevant part of the order of the Tribunal wherein the citations of the earlier decisions of the Tribunal have beets given as 1999 PTD 3357 (Trib.) and 1996 PTD (Trib.) 65. While controverting the arguments of the learned DR with respect to limitation as having not been prescribed for taking action under section 52 of 1986, the learned AR referred a case from the Honourable Supreme Court of Pakistan reported as (1961) 4 Tax 96 and a case of the Honourable Karachi High Court reported as (2002) PTD 14 and contended that where there was no period of limitation provided for an action than a period of four years would be available for taking such action. On the strength of above case-laws the learned AR finally contended that the action of the learned Appeal Commissioner which has been maintained by the Tribunal was in line with the findings of the Honourable Superior Courts and now there was no need to refer a similar proposition of law which has already stood answered and settled by the Honourable Superior Courts.

8. We have considered the above contentions advanced by both the parties.

9. As we have already reproduced relevant part of the observations and findings of the Tribunal, therefore, we need not further dilate upon the facts of the case in the perspective of the merits of the reference applications. We will have to confine ourselves with the simple proposition as to whether there arose a question of law of substantial general importance to be referred to the Honourable High Court for opinion thereon. In our view, in the case in hand the proposed question of law did not appear to a question of such a nature necessarily requiring for being referred to the Honourable High Court for decision thereon for the reason that a likewise proposition with regard to limitation for initiating any action in respect of any provisions of law under the Income Tax Ordinance where no period of limitation has been prescribed in the said provisions of the Ordinance had already been specifically answered by the Honourable Karachi High Court in the case reported as 2002 PTD 14 and a similar yard-stick has been prescribed by the Honourable Supreme Court of Pakistan in the case reported as (1961) 6 Tax 96. Obviously, a settled and answered proposition needs not to be referred again for decision.

10. As a result of above discussion, we see no reason to refer the proposed question of law to the Honourable High Court and hereby decline to make the reference. Therefore, the reference applications stand refused.

C.M.A./775/Tax(Trib.) Reference application declined.