M. As. (Rect.) Nos.401/KB to 404/KB of 2003, decided on 29th October, 2003. VS M. As. (Rect.) Nos.401/KB to 404/KB of 2003, decided on 29th October, 2003., 2004 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 730 (2003)

(a) Wealth Tax Act (XV of 1963)‑‑‑

‑‑‑‑S. 35‑‑‑Income Tax Ordinance (XXXI of 1979), S. 156(1)‑‑‑Income Tax Ordinance (XLIX of 2001), S.221‑‑‑Rectification of mistake‑‑ Miscellaneous application for rectification by the Department ‑‑‑Assessee contended that under the provisions of S.35 of the Wealth Tax Act, 1963, the rectification of mistake could be made suo motu by the Authority passing the order or on the motion of the assessee bringing to the notice of the Authority passing the order and the Department had no legal right in this regard‑‑‑Validity‑‑‑Under S.35 of the Wealth Tax Act, 1963, the mistake could be rectified suo motu on his own motion by the Authority passing, the order or the assessee might bring to the notice of the Authority passing the order ‑‑‑Assessee or the Department, in the income‑tax matter under the Income Tax Ordinance, ,1979 as well as under the Income Tax Ordinance, 2001 the both were authorized to bring to the notice of the Tribunal for the rectification of mistake‑‑ Applications moved under S.35 of the Wealth Tax Act, 1963 by the Department were not maintainable.

(b) Wealth Tax Act (XV of 1963)‑‑‑

‑‑‑‑S. 35‑‑‑Rectification of mistake‑‑‑Evidence in grounds of rectification‑‑Appellate Tribunal had dealt with the issue of jurisdiction in appeals filed by the Department as well as in the decision by the First Appellate Authority and on behalf of the Department ‑notification regarding jurisdiction had never been referred‑‑‑No justification was available to accept the evidence in this regard at belated stage in the grounds of rectification.

(c) Wealth Tax Act (XV of 1963)‑‑‑

‑‑‑‑S. 35‑‑‑Rectification of mistake‑‑‑Legal issue‑‑‑Evidence‑‑‑Legal issue may be raised at any stage of continuity of the proceeding up to the Supreme Court but the evidence in this regard had to be the subject matter at the initial stage.

Ghulam Shabbir Memon, D.R. for Applicant.

Athar Saeed for Respondent.

Date of hearing: 29th October, 2003.

ORDER

JAWAID MASOOD TAHIR BHATTI (JUDICIAL MEMBER).‑‑. Through these four miscellaneous applications, the applicant Department has sought rectification in the order of this Tribunal, dated 10‑3‑2003 in W.T.As. Nos.201 to 204/KB of 2002 (Assessment years 1997‑98 to 2000‑2001) regarding findings of this Tribunal on the issue of jurisdiction.

2. Mr. Athar Saeed, Advocate, representing the respondent/ assessee has at the very outset raised preliminary objection that. the instant four miscellaneous applications are not maintainable under the law as there .is no mistake apparent from the record. He has in this regard referred to provision regarding "Rectifications of mistakes" which is section 35 of the Revoked Wealth Tax Act, 1963. According to this section, 'at any time within four years from the date of any order passed by him, or if, the Commissioner, the Wealth Tax Officer, the Appellate Assistant Commissioner, Appellate Tribunal may, on his, or its, own motion rectify any mistakes apparent from the record and shall, within a like period, rectify any such mistake which has been brought to the notice of the Commissioner, the Wealth Tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal, as the case may be, by an assessee:‑‑---". According to the learned counsel, in the above referred provision of law only the assessee has the right to bring to the notice of the competent authority, passing the order regarding rectification of mistake, and the Department has no legal right in this regard. He has in this respect also referred the relevant provision of the Repealed Income Tax Ordinance, 1979, regarding rectification of mistake which is section 156, wherein it has been specifically mentioned that the mistake may be brought to the notice by any other Income Tax Authority or by the assessee and in the Income‑tax matters due to that provision of law the rectification of mistake may be brought to the notice of the authority passing the order by the Department. According to the learned counsel, likewise, under section 221 of the Income Tax Ordinance, 2001 any mistake can be brought to the notice of the authority passing. the order by a taxpayer or in the case of the Commissioner (Appeals) or the Appellate Tribunal, the Commissioner. He has contended that under the Revoked Wealth Tax Act, 1963, the rectification of mistake can be made suo motu by the authority passing the order or on the motion of the assessee bringing to the notice of the authority passing the order. He has, therefore, submitted that the instant applications are not maintainable. Learned counsel has also vehemently objected the submission Notification, dated 18th September, 1994 regarding territorial jurisdiction over the case. He has in this regard drawn our attention to the grounds of appeals filed by the Department wherein it has been specifically mentioned in ground No.7 for all the four appeals of the assessment years under consideration that the jurisdiction was properly assigned by the Regional Commissioner of Income Tax (Southern Region Karachi) vide his Order No.2624, dated 20‑6‑2001, and according to learned counsel, there is no mention in the grounds of the main appeal regarding territorial jurisdiction of the Assessing Officer through Notification, dated 18th September, 1994, which according to him, is clearly afterthought to damage the legal rights of the assessee.

3. Mr. Ghulam Shabbir Memon, learned Representative of the appellant‑Department is however opposing the above preliminary objection made by the learned representative of the assessee. He has contended that this Tribunal has unconsciously misconceived this fact regarding jurisdiction' and mistakenly, the departmental appeals on the issue of jurisdiction of the case been dismissed. He has submitted that this is an anomalous situation. As, according to him, the assessee in this case has wrongly filed this return of income in Circle D‑9, Zone‑D without considering the fact that the land of the assessee bearing Survey No. NA‑118, Deh Okweari, Rashid Minhas Road, Karachi falls under the territorial jurisdiction of Circle E‑14, Zone‑E, Karachi. Learned D.R. is of the view that the DCIT Circle D‑17, Zone‑D, Karachi has wrongly completed the wealth tax assessment without having proper jurisdiction and therefore, the Assessing Officer having jurisdiction regarding Circle E‑14, Zone‑E, has rightly initiated the proceedings in the case of the assessee on the basis `of jurisdiction assigned through the Commissioner of Income Tax Zone‑E Karachi vide his Notification, dated 18th September, 1994 wherein both sides of Rashid Minhas Road starting from Shahrah‑e‑Faisal up to intersection of University Road, (NIPA) are under the jurisdiction of Circle E‑14, Zone‑E, Karachi. According to the learned DR, as during the course of Wealth Tax proceedings, the Assessing Officer issued show‑cause notice informing the assessee about correct jurisdiction over the case and the assessee has expressed his uncertainty on jurisdiction for, avoiding the lawful proceedings. The Assessing Officer referred the case to the RCIT to remove the ambiguity regarding jurisdiction who vide his Order No.2624, dated 20‑6‑2001 has assigned permanent jurisdiction over the case to Circle E‑14, Zone‑E, Karachi. Regarding the preliminary objection raised by the learned‑counsel for the assessee/respondent, learned DR has submitted that the mistake can be brought to the notice of the Authority passing the order by any aggrieved person and as in this case the Department is aggrieved by this order due to mistake apparent from the record there is no bar for entertaining the applications filed by the applicant. Regarding the second objection, learned DR has submitted that the issue of jurisdiction is a legal issue and can be brought to the notice of the appellant‑Authority at any stage up to the Hon'ble Supreme Court of Pakistan and the assessee in this case has placed an evidence regarding jurisdiction which should have to be considered by this Tribunal.

4. We have heard learned representative of both the parties and have also perused the order of this Tribunal, dated 10‑3‑2003, the impugned order of the learned CIT(A) and the grounds of appeals which are common for all the years under review, i.e. 1997‑98 to 2000‑2001. We have perused the relevant provisions of laws regarding rectification of mistake in the Revoked Wealth Tax Act, 1963 as well as in the Income Tax Laws. For the sake of elucidation the said provisions are reproduced hereunder:‑‑

SECTION 35 OF THE WEALTH TAX ACT, 1963

35. Rectification of mistake.‑‑‑At any time within four years from the date of any order passed by him, or if the Commissioner, the Wealth‑tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal may, on his, or its, own motion rectify any mistake apparent from the record and shall, within a like period, rectify any such mistake which has been brought to the notice of the Commissioner, the Wealth‑tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal, as the case may be, by an assessee:

Provided that no such rectification shall be made which has the effect of enhancing the assessment unless the assessee has been given a reasonable opportunity of being heard in the matter.

SECTION. 156 (l) OF THE REPEALED INCOEM TAX ORDINANCE, 1979

156.‑ Rectification of mistake.‑‑‑(1) Any Income Tax Authority or the Appellate Tribunal may amend any order passed by it to rectify any mistake apparent from the record no its own motion or on such mistake being brought ‑to its notice by any other Income Tax Authority or by the assessee.

SECTION 221 OF THE INCOEM TAX ORDINANCE, 2001

221. Rectification of mistakes.‑‑‑(1) The Commissioner, the Commissioner (Appeals) or the Appellate Tribunal may, by an order in writing, amend any order passed by him to rectify any mistake apparent from the record on his or its own motion or any mistake brought to his or its notice b a taxpayer or, in the case of the Commissioner (Appeals) or the Appellate Tribunal the Commissioner. (Underlined is for emphasis).

While perusal of the above said provisions of law, we have found that under section 35 of the Wealth Tax Act, the mistake can be rectified suo motu on his own motion by the Authority passing the order or the assessee may bring to the notice of the Authority passing the order. While in the Income‑tax matters under the Repealed Income Tax Ordinance, 1979 as well as in the Income Tax Ordinance 2001, the assessee or the Department both are authorized to bring to the notice of this Tribunal for the rectification of mistake and in the present case as the applications have been filed by the Department, we find force in the arguments raised by the learned counsel for the respondent/assessee that the applications moved by the applicant Department are not maintainable. Even otherwise, we have found that during the hearing of the main appeal on behalf of the Department. The Notification issued by the Commissioner of Income Tax, Zone‑E, dated 18th September, 1994 regarding territorial jurisdiction has never been referred by the learned representative of the Department. Even in the grounds of appeal for all the four years under review filed by the Department, there is no mention of such notification. Likewise, such Notification has never been referred in the consolidated impugned order for all the four years. We, therefore, find no force in the arguments of the learned representative of the applicant Department that the issue of jurisdiction being legal issue, should be considered on merits and the evidence in this regard should be accepted. We are of the view that the learned CIT(A) as well as this Tribunal has mainly dealt with the issue of jurisdiction in the appeals filed by the Department as well as in the decision referred by the learned CIT(A) in the impugned order and on behalf of the applicant‑Department H the Notification, dated 18th September, 1994 has never been referred. We, therefore, find no justification to accept the evidence in this regard, at this belated stage in the grounds of rectification. Undoubtedly, it is the settled law that the legal issue may be raised at any stage of continuity of the proceeding up to the Hon'ble Supreme Court of Pakistan but the evidence in this regard should have to be a subject‑matter of the initial stage. In the Grounds of the instant applications which are common/ similar for all the four years under review, it has been mentioned that the Assessing Officer issued show‑cause notice informing the assessee about correct jurisdiction over the case and in response to which the assessee has expressed his uncertainly on jurisdiction which according to Assessing Officer is for avoiding the lawful proceedings. But it is nowhere mentioned that the assessee was ever informed regarding Notification, dated 18th September, 1994. Rather in the proceedings up to this Tribunal, it has been the contention of the Department that the jurisdiction was assigned by the RCIT vide his Order No.2624, dated 20‑6‑2001. We, therefore, in view of the above facts and circumstances of the case, find no merits in the applications filed by the applicant Department, which are dismissed.

C.M.A./1063/Tax (Trib.) Application dismissed