(a) Interpretation of Statutes---

---- Scheme of law has to be examined in its totality in order to arrive at correct conclusion---No provision of law is to be considered in isolation.

(b) Income Tax Ordinance (XLIX of 2001)---

----Ss. 2(13), 210 & 239---Income Tax Ordinance (XXXI of 1979), S.66-A---Matter pending at the time of commencement of Income Tax Ordinance, 2001---Decision of such matter by Commissioner of Income Tax---Validity---Such matter would be decided in accordance with substantive law contained in repealed Income Tax Ordinance, 1979, but by authority competent under Income Tax Ordinance, 2001---Authority competent under Income Tax Ordinance, 2001 to exercise power of inspecting Additional. Commissioner (IAC) was Commissioner of Income Tax also having power to delegate his power to IAC---Non-delegation of such power to IAC could not be objected to as the same was within discretion of the Commissioner of Income Tax- --Exercise of discretion in law by competent authority would not to be open to any exception.

(c) Discretion--

----When ,discretion in law was exercised by competent authority, then the same would not be open to any exception.

Agha Faquir Muhammad for Petitioner.

Aqeel Ahmed Abbasi for Respondents.

Date of hearing: 13th January, 2004

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---Succinctly stated the petitioner's case is that the proceedings were initiated. against it tinder section 66-A of the repealed Income Tax Ordinance, 1979 (hereinafter referred to as repealed Ordinance). The petitioner's appeal against the order under section 156-A of the repealed Ordinance, was allowed by the Income Tax Appellate Tribunal and the appeal preferred before High Court by the respondent No.1 was dismissed. Thereafter, appeal was filed before the Hon'ble Supreme Court, which was disposed of by consent, in the following terms:--

"(i)The impugned orders of the Income Tax Appellate Tribunal, dated 13-4-1998 passed in ITA No. 321/KB of 1997-98 and of High Court, dated 25-10-2000 passed in ITA No. 192 of 1998 are set aside.

(ii)The IAC Range-I. Cos III, Karachi (IACIT) shall serve a notice upon the respondent under section 27 of the Income Tax Ordinance, 1979 asking it to explain its position with regard to capital receipt/capital gain of Rs.86.194 (m). The respondent may raise all legal pleas available to it in defence.

(iii)The matter is remanded to IACIT to decide it afresh on merits, according to law within three months from receipt of this order. "

After remand of the case as above, the respondent No.2 served a show-cause notice on the petitioner on 27-9-2002, which was subsequently withdrawn. Fresh notice was issued by the respondent No.1. on 28-10-2002 informing the petitioner that the respondent No.2 having no power under the Income Tax Ordinance, 2001, the proceedings were being initiated by the respondent. No.1 Commissioner of Income Tax Companies Zone III, Karachi. The petitioner replied to the show-cause notice and the respondent No.1 passed the order on 22-11-2002 imposing tax liability of Rs.21,548,500 on the petitioner, under section 27 of the repealed Ordinance.

According to petitioner the order passed by the respondent No. 1, is without jurisdiction and against the directions of the Hon'ble Supreme Court, hence this petition.

We have heard Mr. Agha Faquir Muhammad, learned counsel for the petitioner, who has submitted that under section 239(4) of the Income Tax Ordinance, 2001 the pending proceedings were required to be dealt with in accordance with the provisions contained in the repealed Ordinance, as if the Income Tax Ordinance, 2001 has not come into force and therefore, the proceedings under section 66-A of the repealed Income Tax Ordinance, were required to be completed by the respondent No.2 and the order passed by the respondent No.1 is without jurisdiction He has however not denied the fact that the matter has been decided by the respondent No.1, in accordance with the provisions contained in section 27 of the repealed Ordinance. Thus, there is no objection on the point of applicability of the substantive law and the sole objection is directed on the point of procedural law and the jurisdiction.

On the other hand, Mr. Aqeel Ahmed Abbasi, learned counsel for the respondents has submitted that subsection 4 of section 239 relied upon by the learned counsel for the petitioner is to be read with subsections (1) and (2) of the said section. He has submitted that on a combined reading of all the above three subsections, the legal position which emerges is that the assessment in respect of any income year ending on or before the 30th of June, 2002 And proceedings pending under the repealed Ordinance, on the commencement of Income Tax Ordinance, 2001 are to be dealt with in accordance with the provisions of the repealed Ordinance, meaning thereby that the substantive as well as procedural law shall be applied as contained in the repealed Ordinance However, the jurisdiction shall be exercised by an income tax authority, which is competent under the Income Tax Ordinance, 2001, but in accordance with the procedure specified in the repealed Ordinance He has further pointed out that under the repealed Income Tai. Ordinance, the various income-tax authorities, subordinate to the C.B.R and Regional Commissioner of Income Tax were conferred with their independent jurisdiction under the statute and were empowered to exercise the same. However, under the scheme of law contained in the Income Tax Ordinance, 2001, a total departure has been made from the earlier scheme and the pivotal position in the execution of income tax law is occupied by the Commissioner, in whom all the powers are vested. The Commissioner may exercise all or any of the powers as Commissioner of Income Tax or a Taxation Officer which includes Inspecting Additional Commissioner or may delegate all or any of his powers to any Taxation Officer. In the absence of delegation of power by the Commissioner under section 210 of the Income Tax Ordinance, 2001, any Taxation Officer including IAC cannot exercise independent jurisdiction on its own. In support of his contention, he has referred to the definition, of Commissioner contained in section 2(13) of the Income Tax Ordinance, 2001, and the definition of Taxation Officer as contained in section 2(65). He has submitted that by virtue of the provisions contained in sections referred to above, the respondent No. 1 has decided the case in accordance with the provisions contained in the repealed Ordinance and thus, the remand order of the Hon'ble Supreme Court has been complied with in letter and spirit in accordance with the provisions of law as prevailing for the time being in force. He has maintained that the petitioner has already preferred an appeal before the Income Tax Appellate Tribunal, which is pending, and he may pursue his remedy before the Tribunal. Mr. Aqeel Ahmed Abbasi, has argued that the petitioner is misconceived, which is liable to be dismissed.

We have carefully considered the contentions raised by the learned Advocates for the parties. It would be appropriate to reproduce the relevant provisions of law referred to by the learned Advocates for the parties, which read as follows:--

Section 2 of ITO, 2001

(13) "Commissioner" means a person appointed as a Commissioner of Income Tax under section 208, and includes a taxation officer vested with all or any of the powers, and functions of the Commissioner.

(65) Any income derived from donations made by non-official or private sector sources in Pakistan to the Waqf for Research on Islamic History, Art and Culture, Istanbul set up by the Research Centre for Islamic History, Art and Culture (IRCICA). "

Section 210 of ITO, 2001

Delegation. ---(1) The Commissioner may, by an order in writing, delegate to any taxation officer all or any of the powers or functions conferred upon or assigned to the Commissioner under this Ordinance, other than the power of delegation.

(2) An order under subsection (1) may be in respect of all or any of the persons, classes of persons or areas falling in the jurisdiction of the Commissioner.

(3) The Commissioner shall have the power to, cancel, modify, alter or amend an order under subsection (1).

Section 239 of ITO, 2001

(1) Savings.---(1) Subject to subsection (2), in making any assessment in respect of any income year ending on or before the 30th day of June, 2002, the provisions of the repealed Ordinance insofar as these relate to computation of total income and tax payable thereon shall apply as if this Ordinance had not come into force.

(2) The assessment, referred to in subsection (1), shall be made by an income tax authority which is competent under this Ordinance to make an assessment in respect of a tax year ending on any date after the 30th day of June, 2002, and in accordance with the procedure specified in section 59 or 59th 3[or 61] or 62 or 63, as the case may be, of the repealed Ordinance.

(4) Any proceeding under the repealed Ordinance pending on the commencement of this Ordinance before any income tax authority, the Appellate Tribunal or any Court by way of appeal; reference, revision or prosecution shall be continued, and disposed of as if this Ordinance has not-come into force.

From a bare perusal of the above provisions of law, we find substance and force in the contention of Mr. Aqeel Ahmed Abbasi. We agree with the proposition that, in order to arrive at the correct conclusion, a scheme of law is to be examined in its totality and no provision of law is to be considered in isolation. We fully agree with the proposition of law variably argued by Mr. Aqeel Ahmed Abbasi and hold that all the pending matters at the time of commencement of Income Tax Ordinance, 2001 are required to be decided in accordance with the provisions contained in the repealed Ordinance, but by an income tax authority competent under the Income Tax Ordinance, 2001. In the context of the facts and law involved in this case, the, Income Tax Authority competent under the Income Tax Ordinance, 2001, to exercise the power of IAC is the Commissioner of Income Tax. Although he is empowered to delegate his authority to an IAC but the non-delegation of power to IAC cannot be objected to, as it is within the discretion of Commissioner of Income Tax and when a discretion in law is exercised by competent authority, it is not open to any exception.

Consequent, to above view it is held that the respondent No.1, (Commissioner of Income Tax) has complied with direction of Hon'ble Supreme Court in accordance with law and has passed the order under section 66-A of the repealed Ordinance, in accordance with the 'substantive law contained in the said Ordinance in the capacity of IAC, Such order is open to appeal before the Income Tax Appellate Tribunal, where the appeal has been preferred and is pending, The Income. Tax Appellate Tribunal shall decide the appeal on merits' in accordance with law. The impugned order passed by the respondent No. 1, does not suffer from any lack of jurisdiction and consequently, the appeal stands dismissed in limine.

After hearing the learned Advocates for the parties on 13-1-2004, the petition was dismissed by a short order. These are the detailed reasons in support thereof. .

S.A.K./A-15/KPetition dismissed