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

‑‑‑‑S. 136 (1)‑‑‑Reference to High Court ‑‑‑Condonation of delay‑‑‑Notice for hearing of application for condonation ‑‑‑Main appeal was disposed of with the application of condonation ‑‑‑Validity‑‑‑If the main appeal was disposed of on the same date after disposing of the condonation application, no irregularity was caused‑‑‑Reference application was dismissed by the Appellate Tribunal.

(2000) 81 Tax 240 (H. C. Kar.) and PLD 1992 SC 369 ref.

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

‑‑‑‑S. 136(1)‑‑‑Reference to High Court‑‑‑Passing of order after 8 months from the date of hearing without rehearing‑‑‑Validity‑‑‑No embargo existed on the Appellate Tribunal not to pass an order after a certain time period ‑‑‑Assessee failed to cite any law that in such a case there should have been rehearing of the appeal‑‑‑Reference was dismissed by the Appellate Tribunal.

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

‑‑‑‑S. 136(1)‑‑‑Reference to High Court‑‑‑Setting aside of order‑‑ Reference‑‑‑Validity‑‑‑No Reference could be admitted by the High Court, where an assessment order had not been set aside by the lower appellate authority.

1988 PTD 111 rel.

Agha Zafar, A.R. for Applicant.

Sajjad Ahmed, D.R. for Respondent.

Date of hearing: 5th November, 2003.

ORDER

AGHA KAFEEL BARIK (ACCOUNTANT MEMBER).‑‑‑The assessee has filed this application requiring us to refer the following questions of law as arising out of the order of the Tribunal, dated 19‑4‑2003 in I.T.A. No. 61/KB of 2002 under section 62 and M.A. (Cond.) No.22/KB of 2002, both relevant to assessment year 1998‑99, to the Honourable High Court of Sindh under section 136(1) of the Income Tax Ordinance, 1979.

(i) Whether on the facts and grounds the reasons for delay explained by the respondent are `sufficient cause.' within the meaning of section 134(4) of the Income Tax Ordinance, 1979?

(ii) Whether under the law and practice first the application of condonation of delay is to be heard and only after passing a speaking order on such application the ITAT can pass orders on merits of the appeal after hearing the parties?

(iii) Whether the ITAT has powers to pass orders after more than 8 months from the date of hearing without rehearing?

(iv) Whether valuable rights accrue to the party on the expiry of period of limitation and the delay in presenting an appeal can only condoned when each and every delay is satisfactorily explained?

(v) Whether a show‑cause notice as required under the principle audi alteram partem was served while excluding the return of the petitioner from the purview of self assessment scheme and whether intimation of processing the return under normal law can be equated with a show‑cause notice?

2. The learned AR argued that the Tribunal allowed condonation application of the department, although the delay of 20 days was not fully explained. He submitted that under section 134(4) there should be sufficient cause for condonation of delay which was ignored by the Tribunal.

3. It is noted that questions at serial No. (i)(ii) and (iv) are related to the order of the Tribunal condoning the delay of filing departmental appeal with detailed discussion and finally giving decision that "in our view the provision of such limitation should only be invoked if the decision of the learned CIT(A) is found to be based on fair and reasonable grounds. Otherwise the technicalities of limitation clause should not be invoked in the aid of any damage to the cause of the Revenue". The Tribunal has relied on a judgment of the honorable High Court of Sindh reported as (2000) 81 Tax 240 (H.C. Kar.) as well as judgment of the Supreme Court reported as PLD 1992 SC 369. It is further pointed out that the condition to extend sufficient cause is binding on the part of the applicant and not for the Tribunal. Subsection (4) of section 134 clearly provides that the Tribunal may admit an appeal "if it is satisfied" .. " which means that if the Tribunal is satisfied that the cause of delay was sufficiently explained by the applicant it can allow condonation. In other words it is the discretion of the Tribunal to allow condonation and it is neither a matter of the right of the applicant nor infringement of the right of the other party.

4. In question No. (iii) above, the assessee has challenged the powers of the Tribunal to pass orders after a period of more than 8 months from the date of hearing without rehearing of the appeal. The learned AR for the, assessee argued that the hearing was mainly focused on the arguments regarding departmental application for condonation of delay and little was argued about the facts of the case in departmental appeal ITA No. 61/KB of 2001. He also argued that while the hearing departmental miscellaneous application (Condonation) No. 22/KB of 2002 was fixed for 10‑8‑2002 and was to be disposed of before deciding the departmental main appeal ITA No. 61/KB of 2002, the Tribunal disposed of departmental main appeal also with the condonation application, which was not proper and was against the procedure and practice of the Tribunal. He also argued that the order was reserved for more than 8 months and therefore rehearing of the appeal should have been fixed.

5. Here we note that the learned counsel has objection on the order of the Tribunal on two points; firstly disposing of departmental appeal alongwith its miscellaneous application for condonation and secondly passing the order after 8 months of the hearing of the appeal and condonation application. We observe that there is no bar to conduct hearing of the main appeal and disposal thereof immediately after the condonation application is heard and disposed of. In this case the Tribunal has' firstly disposed the departmental condonation application which has been discussed at length and finally allowed at page 10 of its order as referred above also, and subsequently in the same consolidated order the departmental appeal has been heard and decided. The adjudication of departmental appeal in ITAN No.61/KB of 2002 spreads over the 12 pages from page 12 to page 23. The learned counsel of the applicant also admitted that a notice for the hearing of the appeal was also duly served on him alongwith a notice of hearing of departmental application for condonation. Hence, we hold that if the main appeal was disposed of on the same date after disposing of the condonation application, no irregularity was caused. About the second issue regarding passing of an order after 8 months of the hearing of the appeal we do not find any embargo on the Tribunal not to pass an order after a certain time period. The learned AR also failed to cite any decision in support of his argument that in such a case there should have been rehearing of the appeal.

6. Question No.(V) above is regarding exclusion of the return of income of the petitioner from the purview of Self‑Assessment Scheme. The learned A.R. argued that firstly the return was wrongly excluded from the scheme and secondly no show‑cause notice was given to the assessee before such exclusion. However we find that the Tribunal after giving its findings on the issue has remanded the case back to the learned CIT(A) for order on merits on the same issue. The learned Karachi High Court in its judgment reported as 1998 PTD 111 has held that no reference can be admitted by the High Court. where an assessment order has been set aside by the lower appellate authority.

7. In view of the above discussion we do not find any reason to refer any of the questions framed in this reference application to the Honourable High Court. Accordingly the reference application is dismissed.

C.M.A./49/Tax (Trib.)Reference application dismissed.