Income Tax Ordinance (XXXI of 1979)---

----S. 136---Reference to High Court---Question whether Appellate Tribunal was justified in law in holding that by giving effect to order of First Appellate Authority under, S.132 of the Income Tax Ordinance, 1979, the departmental appeals before the Appellate. Tribunal had become infructuous and thus liable to be dismissed, was referred to the High Court by the Appellate Tribunal being question of law.

Wishno Raja Qavi, D.R. for Appellant.

Nemo for Respondent.

Date of hearing: 9th August, 2003.

ORDER

MUHAMMAD ASHFAQUE BALOUCH (JUDICIAL MEMBER).---These reference applications for the assessment year 1993-94 and 1994-95 have been filed on behalf of the department and the learned CIT Zone-B Karachi requires us to refer to the Hon'ble High Court the following question said to be of law and arising out of the orders of this Tribunal in ITA Nos. 1124 and 1125/KB of 1995-96 (Assessment Years 1993-94 and 1994-95) wherein the consolidated order was made by this Tribunal on 14-6-2002:--

QUESTION

"Whether on the facts and circumstances of the case the learned Income Tax Appellate Tribunal was right in law in holding that by giving effect to the order of the learned CIT(A), the departmental appeal becomes infructuous and thus liable to be dismissed. "

2. We have heard the learned D.R. as the respondent has chosen not to appear and the relevant appellate orders have also been perused by us.'

3. The facts of the case briefly stated are that the Assessing Officer had made regular assessments for the assessment years 1993-94 and 1994-95 although the assessee had submitted the returns under the relevant Self-Assessment' Schemes. The assessee went in appeal before the learned CIT(A) who held that the returns submitted by the assessee qualified to be processed under the relevant Self-Assessment Schemes and therefore, he directed the Assessing Officer to accept the returned income of the assessee under the Self-Assessment Schemes.

4. In order to give effect to the order of the learned CIT(A), the Assessing Officer passed orders under section 132 on 12-11-1995 wherein the returned version was accepted by him as per directions of the learned CIT(A). However, the department came in appeal before the Tribunal on 24-12-1995 against the directions of the learned CIT(A) for accepting the returns under the Self-Assessment Schemes. When the matter came up for hearing before the Tribunal the learned AR argued that the departmental appeals for the assessment years 1993-94 and 1994-95 bad become infructuous because the Assessing. Officer had given appeal effect to the orders of the learned CIT(A) on 12-12-1995 and therefore, the appeals filed on 24-11-1995 had become infructuous. In support of his submissions the learned A.R. had referred to an earlier decision-of the Tribunal in ITA No. 992/KB of 1993-94 (Assessment Year 1989-90), dated 30-9-2000 where the departmental appeal filed on 24-10-1993 was held to be infructuous in view of the fact that the Assessing Officer had already in compliance with the directions of learned CIT(A) passed orders under section 62/132 on 24-9-1993 i.e. before filing the said appeal. The Tribunal while deciding the appeals of the present cases for the assessment year 1993-94 and 1994-95 followed its earlier decision in ITA No.992/KB of 1993-94, dated 30-9-2000 referred supra considering it to be of binding nature and dismissed the departmental appeal but the Tribunal had made following observations:--

"It is pertinent to mention that appeal effect is a procedural (matter), because till the time appeal is pending before the Appellate Tribunal the issue is wide open and could not be said to have been closed. All acts done to the filing of appeals before the Appellate Tribunal were subject to the result of the implementation of impugned order, which the Assessing Officer was obliged to do because of having procedural nature while, it has been held by superior forums that the procedural and. technical lapses are to be ignored."

5. It is in these circumstances that the learned D.R. argues that the observations made supra by the Tribunal in the consolidated order made in the case of the assessee and the final conclusions drawn thereunder appear to be contradictory and the present Bench of the Tribunal had unwillingly followed an earlier decision of the another Bench alt ugh the Members sitting on this Bench were inclined to hold a view contrary to that of the earlier Bench. He further submits that even if it is presumed that the earlier decisions are binding on the subsequent Benches of the Tribunal, the Bench would have considered that the facts of the case in ITA No.992/KB of 1993-94, dated 30-9-2000 which as followed by the Tribunal in the instant case were different insofar as in that case the appeal, effects were given under section 62/132, meaning thereby that the Assessing Officer had applied his mind on the facts of the case whereas in the case now impugned the Assessing Officer had only carried out directions of the learned CIT(A) and there was no application of mind on his part.

6. Considering the arguments of the learned D.R. and after perusing the relevant orders we feel that the question as proposed by the department does arise out of the order of the Tribunal and we accordingly refer the following question of law arising out of the order of this Tribunal for both the years for obtaining authoritative opinion of the Hon'ble High Court:-

QUESTION

"Whether on the 'facts and circumstances of the case the learned Income Tax Appellate Tribunal is right in law in holding that by giving effect to the order of the learned CIT(A) under section . 132 of the Income Tax Ordinance, 1979, the departmental appeals before the Tribunal had become infructuous and thus liable to be dismissed."

7. The documents in the appendix will form part of the Paper Book.

8. The above order under application is however, conditional on the payment of printing charges of Paper Book by the applicant to the extent of Rs.(sic) within period of 16 days from the service of the notice by the Registrar or the service of the present order, whichever is later.

C.M.A./1040/Tax (Trib.) Reference Application accepted.