(a) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art. 199‑‑‑Income Tax Ordinance (XXXI of 1979), S.136‑‑ Constitutional petition‑‑‑Alternate remedy, availability of‑‑‑Effect‑‑ Where remedy by way of appeal/revision was available in the statute, Constitutional petition would not lie, except where impugned order was without jurisdiction or remedy provided in law was illusory.

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

‑‑‑‑Ss. 156 & 136‑‑‑Constitution of Pakistan (1973), Art. 199‑‑ Constitutional petition filed after withdrawal of appeal against order under S.156 of Income Tax Ordinance, 1979 on wrong perception of law‑‑‑Maintainability‑‑‑Such Constitutional petition would not be maintainable‑‑‑High Court, however, declined to nod‑suit the petitioner on such score as same would amount to technical knock‑out‑‑‑Appeal withdrawn had been filed within period of limitation‑‑‑Constitutional petition had been filed within period of limitation provided for filing appeal‑‑‑High Court showing indulgence converted the Constitutional petition into appeal.

Pakistan Electric Fittings Manufacturing Company Limited v. Commissioner of Income‑tax and 2 others 2000 PTD 2407 rel.

(c) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art. 199‑‑‑Income Tax Ordinance (XXXI of 1979), Ss. 129, 134 & 136‑‑‑Conversion of Constitutional petition into another proceedings‑‑ Scope‑‑‑Such concession would not be available to petitioner ignoring forum of appeal/reference provided in statute and filing Constitutional petition particularly after expiry of limitation for filing appeal/reference.

Pakistan Electric Fittings Manufacturing Company Limited v. Commissioner of Income‑tax and 2 others 2000 PTD 2407 ref.

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

‑‑‑‑Ss. 136 & 156‑‑‑Appeal/reference to High Court and rectification application‑‑‑Scope‑‑‑Scope of appeal/reference is much wider than rectification application‑‑‑Party in appeal/reference can raise all questions of law arising out of findings of Tribunal‑‑‑Objection allowable to be raised in rectification application is restricted to mistake apparent from record.

Islamuddin and 3 others v. Income Tax Officer and 4 others 2000 PTD 306 rel.

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

‑‑‑‑Ss. 19(2), 66‑A & 156‑‑‑Rectification of mistake‑‑‑Authority revised assessment for subsequent years on basis of order of Tribunal for earlier years‑‑‑Facts of subsequent years were entirely different from facts forming basis for orders of earlier years‑‑‑Tribunal after considering such facts by deliberate and conscious findings deviated from its earlier judgment‑‑‑Tribunal rejected rectification application‑‑‑No exception could be taken to impugned order being not suffering from any illegality and infirmity‑‑‑High Court answered, reference in negative.

1996 PTD (Trib.) 122; 1989 PTD (Trib.) 859; CIT Companies‑II v. National Food Laboratories 1992 PTD 570; 1996 PTD (Trib.) 420; 1996 PTD (Trib.) 492; 1997 PTD (Trib.) 831; 1997 PTD (Trib.) 902; Glaxo Laboratories Ltd. v. Inspecting Assistant Commissioner of Income‑tax and others 1992 PTD 32 = PLD 1992 SC 549; Mansab Ali v. Amir and 3 others PLD 1971 SC 124; Major Syed Walayat Shah v. Muzaffar Khan and 2 others PLD 1971 SC 184; Messrs Julian Hoshang Dinshaw Trust and others v. Income Tax Officer, Circle XVIII South Zone, Karachi and others 1992 PTD 1; Yousuf Ali v. Mohammad Aslam Zia and 2 others PLD 1958 SC (Pak.) 104; Abdul Rauf and others v. Abdul Hamid Khan and others PLD 1965 SC 671; Utility Stores Corporation of Pakistan v. Punjab Labour Appellate Tribunal and others PLD 1987 SC 447; PLD 2003 Lah. 614 and Pakistan Electric Fittings, Manufacturing Company Limited v. Commissioner of Income‑tax and 2 others 2000 PTD 2407 ref.

Muhammad Rafique v. Baqar 2003 SCMR 1401 fol.

(f) Merger, doctrine of‑‑‑

‑‑‑‑Doctrine of merger in judicial/quasi‑judicial proceedings‑‑‑Basis of such principle is that appeal is continuation of original proceedings, and when Appellate Authority hears appeal against order of original/lower forum, then all issues considered and adjudicated upon by Appellate Court merge in order of Appellate Court‑‑‑Pre‑condition for law of merger is existence of an original lower forum order and appeal against such order.

(g) Income‑tax‑‑‑

‑‑‑‑Res judicata, principle of‑‑‑Applicability‑‑‑Every assessment year and order is ‑an independent unit‑‑‑Such principle not applicable to Income Tax Law‑‑‑If facts and circumstances are changed in subsequent years, then neither assessee nor Assessing Officer would be bound by assessment order or finding of Appellate Court given in earlier assessment years‑‑‑With changed facts and circumstances, assessment and finding can also be changed, to which no exception can be taken.

CIT, Central Zone "B", Karachi v. Farrokh Chemical Industries 1991 SCC 805 rel.

Shahenshah Hussain for Petitioner.

Jawaid Farooqi for Respondent.

Dates of hearing: 10th and 11th September, 2003.

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J.‑‑‑The relevant facts giving rise to this petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, are that the petitioner is owner of a property situated at Club Road Karachi. The petitioner filed Return of income for the assessment years 1991‑92, 1992‑93 and 1993‑94, declaring ALV of the property at Rs.19,10,646 for the assessment years 1991‑1992 and 1992‑93 and at Rs.21,01,710 for the assessment year 1993‑94. The Assessing Officer accepted the declared ALV. The Inspecting Additional Commissioner of Income Tax Range III, Companies IV, Karachi, issued a show‑cause notice under section 66‑A of the Income Tax Ordinance, 1979, stating that ALV of the building for three assessment years under consideration have been assessed as declared. The Building was given on lease to a sister concern since 1964 for which no Lease Deed was written. The sister concern, Hotel Metropole (Pvt.) Limited is using the Building for rental purpose from where rental has been declared as under:‑‑

The IAC stated that the petitioner was showing ALV, at much lesser figure than this property is actually fetching from year to year. He pointed out that under section 19 of the Income Tax Ordinance, 1979, the "annual value" is defined, as the sum for which the property might reasonably be expected to let from year to year. Its Proviso states, that "where the property is let on rent, the annual value shall not be less than the rent payable by the tenant". The IAC stated that, in the above circumstances, the property owned by the petitioner has been assessed at too low a rate and, therefore, the assessment orders for the three years under consideration were erroneous insofar as these were prejudicial to the interest of Revenue. IAC proposed to take action under section 66‑A of the Income Tax Ordinance, 1979 and called for the explanation, if any, within one week of receipt of show‑cause notice.

In reply to the above notice, the petitioners vide their letter, dated February 18, 1995 stated the rental income declared and assessed is in line with the directive of the Income Tax Appellate Tribunal in. the appeals pertaining to the assessment years 1978‑79 to 1985‑86. Attention was also drawn to para. 12 of the Tribunal order, which reads as follows:‑‑

"(12) For the foregoing reasons the annual value fixed by the Assessing Officer in disregard to the rent restriction law is held to be unreasonable and, therefore, it is set aside. The Assessing Officer is directed to determine the annual value of the property afresh in the light of provisions contained in the Sindh Rented Premises. Ordinance, 1979. For the sake of guidance of the Assessing Officer it is clarified that the annual letting value fixed by this Tribunal at Rs.11,86,360 may be taken as base and 10% increase thereon may be calculated for the assessment year 1978‑79 which should be maintained for three years and thereafter 10% increase 'may be made after every three years".

It was further stated that Reference Application filed by the Department was withdrawn and, therefore, the provisions of section 66‑A were not attracted.

Learned IAC did not accept the explanation and repelled the same as follows:‑‑

"I have gone through the said order. It is my considered opinion that this judgment of the learned Tribunal is not on all fours with the facts of the years under reference. The section proposed under section 66‑A is regarding non‑application of law which clearly lays down that, where the property is let on rent "the annual value shall not be less than the rent payable by the tenant". The order of the Tribunal pertains to the old years i.e. assessment years 1978-79 to 1985‑86 wherein the learned Tribunal has dilated upon the question of enhancement of the rent".

After referring the findings of Tribunal in the earlier years the learned IAC observed that the decision of the Tribunal in earlier years has no bearing on the issue involved in three years under reference.

The petitioner feeling aggrieved preferred appeals before the Income Tax Appellate Tribunal bearing I.T.As. Nos. 1939, 1949 and 1941/KC of 1994‑95. The plea taken before the Tribunal was that the issue pertaining to the ALV already stood decided by the Tribunal vide order, dated 12‑1‑1989, in the appeals pertaining to the assessment years 1978‑79 to 1985‑86; which has been followed by Income Tax Officer and consequently the IAC had no jurisdiction to revise the assessment orders under section 66‑A of the income Tax Ordinance, 1979.

The learned Members of Division Bench of Tribunal did not accept the contention holding that it was misconceived and misplaced for the reason that the facts forming basis for, the order in the earlier years were distinguishable from the facts in the appeal for the subsequent years. Learned Members of Division Bench of Tribunal held that in the earlier years the facts, as brought on record were that a particular amount of rent was being charged but the Assessing Officer was enhancing the annual letting value, every year, without considering the fact that there was restriction on enhancement of rent. In the circumstances, it was held that at the most ALV could be increased by taking guidance from section 9 of the Sindh Rented Premises Ordinance, 1979. However, for the assessment years 1991‑92 to 190‑94, it was brought on record that the property was actually fetching much, higher rent and the annual letting value declared was legs than the said rent. This fact was not available when a Division Bench of Tribunal passed order, dated 12‑1‑1989 in respect of the assessment years 1978‑79 to 1985‑86.

In view of the changed circumstances and facts, the learned Members of Division Bench of Tribunal placed reliance on subsequent judgment of the Tribunal reported in (1995) 72 Tax 93 (Trib.) and upheld the order under section 66‑A of the Income Tax Ordinance, 1979 and all the three appeals were dismissed.

The petitioner instead of filing Rectification Application under section 136 (1), submitted a Rectification Application under section 156 of the Income Tax Ordinance, 1979, seeking rectification and recalling of the Tribunal's order, dated 17‑7‑1996. It was contended that the Tribunal's order, sought to be rectified suffered from mistake, apparent from record. It was further prayed that, "as the rectification of mistake apparent from record, tantamount to recalling and re‑writing of the appellate order, it would be mere conducive to justice and equity that there appeal be reheard".

During the course of hearing of Rectification Application, it was reiterated that the earlier order of the Tribunal, dated 12‑1‑1989 relied upon by the petitioner was passed in its own case and the Assessing Officer had merely followed the direction, contained therein, while accepting declared ALV. The order subsequently passed by the Tribunal and sought to be rectified, gave indication that the learned Members of Division Bench of Tribunal fell in error, in concluding that the earlier order of the Tribunal was passed in the case of some different assessee. It was submitted that the learned Members of Division Bench of Tribunal erroneously relied upon the judgment reported as (1995) 72 Tax 93 (Trib.). It was alleged that the learned Members of Division Bench of Tribunal committed mistake by drawing distinction between the facts in the earlier years and those years under consideration. The emphasis was on the point that Inspecting Additional Commissioner had no jurisdiction to revise an order passed by the Appellate Authority. Reliance in this behalf was placed on the Judgment of Hon'ble Supreme Court in the case of Glaxo Laboratories (Pvt.) Limited v. Inspecting Assistant Commissioner (1992) 66 Tax 74.

Learned Members of Division Bench of Tribunal while hearing the Rectification Application observed that most of the submissions made at the bar on behalf of the assessee pertain to tile merits of the case; which cannot be considered or ruled upon in the applications under section 156 of the Income Tax Ordinance, 1979. It was further observed that Rectification Applications were based upon the sole reason that learned Members of Division Bench of Tribunal wrongly recorded the facts in the order of the Tribunal; dated 12‑1‑1989 were distinguishable from those placed before it under three assessment years under consideration. It was further observed that, in view of the learned counsel for the assessee, this misconception coloured the whole order inasmuch as the facts and the issues did not undergo any change for the assessment years 1978‑79 to 1985‑86 and 1991‑92 to 1993‑94.

Learned Members of Division Bench of Tribunal while hearing the Rectification Application observed that there was no misconception while passing the order, sought to be rectified, and that at the time of passing order sought to be rectified the learned Members of Division Bench of Tribunal were not oblivious of the fact that the order, dated 12‑1‑1989 was recorded in the case of assessee itself. Learned Members of Division Bench of Tribunal in the order, dated 14‑7‑1997, whereby the Rectification Application was decided, observed that although while deciding the application for rectification, they need not to touch the merits of the case, already ruled upon yet to order to answer the submissions made at the bar, they will observe that points in issue before the Tribunal were totally different from the facts when the appeals in the earlier years came up for decisions on 12‑1‑1989, as is evident from the perusal of the said order. It was further held that there was no substance in the submissions, that the learned Members of Division Bench of Tribunal while deciding appeals for thesubsequent years committed any error of fact or law by relying upon the judgment reported in (1995) 72 Tax 93 (Trib). They further held that the earlier decision of the Tribunal, dated 12‑1‑1989 in the case of Assessee reported as (1989) 60 Tax 129 (Trib.) and the subsequent judgment reported in (1995) 72 Tax 93 (Trib.) addressed to different issues and that the last mentioned decision was on all fours to the facts, in the assessment years 1991‑92 to 1993‑94. It was also held that nothing has been shown to establish that the judgment reported as (1995) 72 Tax 93 (Trib.) was not attracted to the facts and circumstances of the case. Thereafter, a very pertinent observation was made to the effect that "a decision of the Tribunal in favour of an assessee on factual aspect cannot arid does not shut the doors on the face of the Revenue for all times to come. The principle of res judicata being inapplicable in Revenue matters, even claims of similar nature can be re judged by the Revenue in the light of the disclosed version in any subsequent year. This is why that even the doctrine of merger has been restricted only to the exact subject‑matter in appeal by way of amendment introduced in 1991 subsection (1‑A) to section 66‑A, of the Ordinance. The Revising Authority proceeded to exercise its jurisdiction on the basis that the declared ALV in the three years was accepted by the Assessing Officer in violation of the provisions contained in section 19(1) of the Ordinance read with the proviso thereto. The learned Division Bench agreed with the reasons for which the action was initiated. A reference was therefore, made to another reported decision in which in similar circumstances such action was maintained by a Division Bench of Tribunal at Lahore. The learned Division Bench of this Tribunal while maintaining the action of Inspecting Additional Commissioner, agreed with him, that the sums of ALV determined by the Tribunal in earlier years were relateable only to the consideration of the issue if the Revenue could enhance the ALV in contravention of the local' Rent Restriction Laws.

The learned Members of Division Bench of Tribunal further held that the ratio in the case of Glaxo Laboratories is not attracted as it pertained to the period prior to the insertion of subsection (1‑A) of section 66‑A, of the Income Tax Ordinance; 1979. It was further observed that after insertion of subsection (1‑A) in section 66‑A. Revising Authority can revise a part of assessment, even if the assessment has traveled through the echelons of appellate hierarchy, provided the issue sought to be revised was not mooted before the appellate forum.

Learned Members of Division Bench of Tribunal held that the scope of rectification, as envisaged in section 156 of the Income Tax Ordinance, 1979 is too narrow to admit of such an exercise through rectification application. They placed reliance on the judgment of the Hon'ble Supreme Court in the case of CIT Companies‑II v. National Food Laboratories reported as, 1992 PTD 570 = (1992) 65 Tax‑237. In this judgment, the Hon'ble Supreme Court held that such mistake can be rectified, which is apparent on the face of record; the mistake which may be seen floating on the surface and does not require investigation or further evidence. Learned Members of Division Bench of Tribunal further held that Rectification' Application appeared to be Review Application and consequently it cannot be granted, in fact and law. With these findings/observations, the Rectification Application was dismissed.

The petitioner still feeling dissatisfied, preferred Appeal before this Court under section 136 of the Income Tax Ordinance, 1979. (During the relevant period appeal was provided in law instead of Reference). At the same time it filed this petition assailing the order, dated 14‑7‑1997, passed by the learned Members of Division Bench of Tribunal. However, the petitioner withdrew the appeal and preferred to pursue this petition. This fact is reflected from the amendments sought by the petitioner in the Memo of Petition, which was allowed. Ground No.9 in the Memo. of Petition is reproduced below:

"(9) That the petitioner has filed appeals under section 136 of the Income Tax Ordinance in this Hon ble Court under an impression that the order passed the Income Tax Appellate Tribunal under section 156 of the Income Tax Ordinance was appealable in the same manner as such an order when passed by the Appellate Additional Commissioner is appealable to the Income Tax Appellate Tribunal. It however, transpired subsequently that no such amendment was made in section 136 so as to include order under section 156 which is therefore, not subject to appeal to this Hon'ble Court These appeals are still pending".

The respondent No.2 in his comments have taken plea that from the perusal of the assessment record, it was found that assessment orders for the assessment years 1991‑92 to 1993‑94 were erroneous and prejudicial to the interest of Revenue for the reason that the declared ALV accepted by the Assessing Officer was much less than the actual rent being fetched by the Building. The appeal preferred was dismissed by the Tribunal vide order, dated 16‑7‑1996 and no Reference Application within the period of limitation, provided in section 1136 of Income Tax Ordinance, 1979, was filed. It was further contended that the petitioner has himself waived his right of Reference/Appeal before the High Court and, therefore, the order of Tribunal has attained finality. He submitted that the petition, is liable to be dismissed. In their rejoinder, the petitioners have taken plea that they have not waived their, right of appeal/Reference but had recourse to the remedy available under section 156 of Income Tax Ordinance, 1979.

We have heard Mr. Shahenshah Hussain, learned counsel for the petitioner and, Mr. Jawaid Farooqi, learned Counsel for the respondent No.2.

Mr. Shahenshah Hussain, learned counsel for the petitioner has reiterated the contentions raised before the learned Members of Division Bench of Tribunal at the time of hearing of Rectification Application. He has conceded that while replying the notice under section 66‑A, dated February 12, 1995, through their letter, dated February 18, 1995 the petitioner did not deny that the ALV declared for three assessment years under consideration, was much lower than the actual amount of rent fetched from the Building He has submitted that, notwithstanding the admitted facts that the petitioner declared much lower ALV of the Building in contravention of the provisions contained in proviso to subsection (2), of section 19 of the Income Tax Ordinance, 1979, the notice issued by Inspecting Additional Commissioner, under section 66 A of the Income Tax Ordinance, 1979 and subsequent order passed thereon was without jurisdiction, as the order passed by the Assessing Officer was neither erroneous nor prejudicial to the interest of Revenue and the Income Tax Officer had merely followed the order passed by the learned Members of Division Bench of Tribunal on 12‑1‑1989, pertaining to the assessment years 1978‑79 to 1985‑86. He has submitted that when an action initiated is without jurisdiction, the entire subsequent proceedings in pursuance thereof must, fail. He has contended that for exercising the jurisdiction under section 66‑A of the Income Tax Ordinance, 1979 the conditions‑ precedent are that Inspecting Additional Commissioner, on examination of the record of any proceedings under the Income Tax Ordinance, 1979, should consider any order passed thereon by the Income Tax Officer to be erroneous and prejudicial to the interest of Revenue. He has further submitted that the jurisdiction conferred on Inspecting Additional Commissioner under section 66‑A is confined to the orders passed by the Income Tax Officer and is not extended to the orders, which have been merged with the orders of the Appellate Authority. Explaining his contentions, Mr. Shahenshah Hussain, learned counsel for the petitioner has submitted that the law of merger is attracted, to the assessment orders passed by the Income Tax Officer for the assessment years 1991‑92, 1992‑93 and 1993‑94, for the reason that issue pertaining to the determination of ALV in respect of the property held by the petitioner was already finally, decided by the Tribunal vide its order; dated 12‑1‑1989 in the appellate orders pertaining to the assessment years 1978‑79 to 1985‑86. He has contended that once Income Tax Appellate Tribunal has passed an order, it has to be followed in all subsequent years.

In support of his contentions, he has placed reliance on the following judgments of Income Tax Appellate Tribunal:‑‑

(1) 1996 PTD (Trib) 420: (2) 1996 PTD (Trib.) 492; (3) 1997 PTD (Trib.) 831 and (4) 1997 PTD (Trib.) 902.

He has further submitted that even on examination of fact, the order passed by the Income Tax Officer was not prejudicial to the interest of Revenue and consequently, the jurisdiction exercised by Inspecting Additional Commissioner was not warranted in law. He has, further contended that the jurisdiction under section 66‑A of Income Tax Ordinance, 1979 does not extend to the decided issues. In support of his contentions, he has placed reliance on the following judgments:‑‑

(1) Glaxo Laboratories Ltd. v. Inspecting Assistant Commissioner of Income Tax and others 1992 PTD 32 = PLD 1992 SC 549:

(2) Mansab Ali v. Amir and 3 others, PLD 1971 SC 124;

(3) Major Syed Walayat Shah v. Muzaffar Khan and 2 others, PLD 1971 SC 184.

He has next contended that even if jurisdiction is vested with Inspecting Additional Commissioner, it has to be exercised in accordance with law. He has contended that in this case, the Assessing Officer exercised his jurisdiction in accordance with law, therefore, Inspecting Additional Commissioner is not empowered to consider as to what was the actual amount of rent received by the tenant. According to Mr. Shahenshah Hussain although the ALV declared by the petitioner is riot factually correct but the Inspecting Additional Commissioner cannot consider this point in exercise of jurisdiction under section 66‑A of the Income Tax Ordinance, 1979.

In support of his contentions, he has placed reliance on the following judgments:

(1) Messrs Julian Hoshang Dinshaw Trust and others v. Income Tax Officer Circle XVIII South Zone, Karachi and others 1992 PTD 1; (2) Yousuf Ali v. Mohammad Aslam Zia and 2 others (Mohammad Aslam Zia and 2 others v. Yousuf Ali, PLD 1958 SC (Pak.) 104; (3) Abdul Rauf and others v. Abdul Hamid Khan and others PLD 1965 SC 671; (4) Utility Stores Corporation of Pakistan v. Punjab Labour Appellate Tribunal and others PLD 1987 SC 447 and (5) PLD 2003 Lah. 614‑617.

On the other hand Mr. Jawaid Farooqi, learned counsel for the respondent No.2 has submitted that the petition is not maintainable. The petitioner could prefer appeal before this Court against the order passed under section 156 of Income Tax Ordinance, 1979. In support of his contention he has placed reliance on two D.B. judgments of this Court in the following cases:

(1) Pakistan Electric Fittings, Manufacturing Company Limited v. Commissioner of Income Tax and 2 others 2000 PTD 2407 and (2) Commissioner of Income Tax v. Ateed Riaz 2002 PTD 570.

He has next contended that even on merits there is no substance in the petition, which is liable to be dismissed. He has argued that the entire emphasis of the learned counsel for the petitioner is that Inspecting Additional Commissioner had no jurisdiction to revise the orders for the assessment years 1991‑92 to 1993‑94, because the Tribunal had, Massed order; dated 12‑1‑1989 in respect of ALV of the same property for the assessments year' 1978‑79 to 1985‑86. Mr. Farooqi has vehemently, argued that the assessment orders or appellate orders are confined to the orders which assessment order or appellate order relates and shall not be binding either on the tax officials or assessee in respect of the subsequent years, if some new facts are discovered or considered, which Were either not available or omitted from consideration at the time of passing the earlier orders. He has further maintained that the law of merger is not attracted as the order of the Tribunal on which Mr. Shahenshah Hussain has placed reliance, pertains to assessment years 1978‑79 to 1985‑86, dated 12‑1‑1989 and Inspecting Additional Commissioner issued notice under section 66 of the Income Tax Ordinance, 1979 in respect of assessment years 1991‑92; 1992‑93 and 1993‑94 on the basis of fresh facts, on February 12,1995.

Replying to the contention of Mr. Jawaid Farooqi, on the point of right of appeal against the order under section 156 of the Income Tax Ordinance, 1979 and consequent, non‑maintainability of the petitioner, Mr. Shahenshah Hussain has submitted that the petitioner had filed appeal as well as petition and the learned counsel for the respondent No.2 raised objection to the maintainability of appeal, therefore, the appeal was withdrawn and the petition was pursued. Mr. Shahenshah, Hussain has submitted that petition may be converted into appeal, as the appeal which was withdrawn, was filed within the period of limitation provided in law.

We have carefully considered the contentions raised by learned advocates for the parties.

First, we would take up the issue pertaining to the maintainability of the petition. By now it is trite law that if remedy by way of appeal/revision is available in statute, the petition under Article 199 of the Islamic Republic of Pakistan, 1973, shall not lie with the exceptions that the orders passed without jurisdiction or where the remedy provided in law is illusory, an aggrieved person can directly invoke the Constitutional jurisdiction of High‑Court. Since the petitioner could file an appeal against the order of Tribunal, passed under section 156 of the Income Tax Ordinance, 1979 and had actually filed the appeal, which was subsequently withdrawn by the learned counsel for the petitioner on account of wrong perception of law, therefore, it is held that the petition is not maintainable. However, we would not like to dismiss the petition on this score and non‑suit the petitioner, because it would amount to technical knockout, which is not a desirable manner or disposing of the proceedings before this Court. Dealing with inherent power of this Court, it has been observed by a Division Bench of this Court in the case of Pakistan Electric Fittings Manufacturing Company Limited v. Commissioner of Income Tax and 2 others. 2000 PTD 2407 as follows:

"The Court's inherent power to convert one form of action into another seems now quite settled. In that Engineering Industries Ltd. v. The Bank of Bhawalpur Ltd. and another 1979 SCMR 32, the Supreme Court held that there was no bar in the law if once an appeal had been treated as revision to again treat the same as an appeal and dispose of the same in accordance with law. In Akhtar Nasimi v. MLA Zone‑C, PLD 1982 Kar. 130, a Division Bench of this Court recognized the Court's power to adopt a procedure not provided by law but which was not barred by law; in doing so the learned Division Bench also observed that there was no prohibition in law against conversion of a writ petition into an appeal but a writ petition could not be converted into a miscellaneous application in a disposed of confirmation case/criminal appeal. In Abdul Aziz v. Sh Abdur Rehman PLD 1984 SC 164 the Hon'ble Supreme Court approved the conversion of revision into second appeal by the Peshawar High Court. In Karamat Hussain v. Muhammad Azam, PLD 1987 SC 139, the Hon'ble Supreme Court had observed that High Court had erred in refusing to cover second appeals into revisions, since the appeals exhibited features which demonstrated that it fell within the scope of interference under section 115 C.P.C. In Noorul Amin v. Mohammad Hashim 1992 SCMR 1744 the Hon'ble 'Supreme Court was pleased to observe as follows:‑‑

"The Courts, in order to do justice between parties, would generally allow treatment/conversion of proceedings of one kind into another unless there exists some legal bar against such treatment/conversion"'.

The request of Mr. Shahenshah Hussain for converting the petition into the appeal is therefore, accepted and the petition is treated as an appeal under section 136 of the Income Tax Ordinance, 1979. However, we would like to clarify that this indulgence is being shown for the reason that appeal was also filed within the period of limitation which was withdrawn under wrong perception of law and this petition was filed within the period of limitation provided for filing appeal. Any other person ignoring the forum of appeal/reference provided in statute and filing a writ petition only, particularly after expiry of period of limitation for filing appeal/reference, shall not be entitled for this concession, The reason being that such course would tantamount to negate the provisions contained in Article 199 of the Constitution and the period of limitation prescribed in law.

After converting the petition into appeal under section 136 of the Income Tax Ordinance 1979, (as the provisions of law stood in between 1st July 1997 to 30th of June, 2000) we find that the following question of law arises out of the order of the Tribunal:

"Whether Income Tax Appellate Tribunal misdirected in rejecting the Rectification Application?"

The entire facts have been narrated in detail, in the narrative part of this judgment. However, it would be appropriate to observe at this stage, that after dismissal of appeal by the Tribunal vide order, dated 16‑7‑1996, the petitioner (hereinafter referred to as the, appellant) had two remedies available in law. First, the filing of appeal under section 136 of Income Tax Ordinance, 1979 before this Court and the second, of filing Rectification Application under section 156 of Income Tax Ordinance, 1979 before the Tribunal itself. The appellant, out of his own volition exercised the option of submitting Rectification. Application before the Tribunal, and gave up the remedy of filing of appeal before this Court under section 136(1) of Income Tax Ordinance. 1979, thereby allowing the order, dated 16‑7‑1996 to attain finality with the efflux of time, and subject to rectification only under section 156 of Income Tax Ordinance, 1979. It requires no emphasis that the scope of appeal is much wider as compared to the rectification of mistake, as envisaged under section 156 of Income Tax Ordinance, 1979. Ink Appeal/Reference proceedings, an aggrieved party is, allowed to raise F all the questions of law, arising out of the findings of facts given by the Tribunal. However, in case of rectification before the Tribunal, the objection, which is allowed to be raised is restricted to the rectification of mistake apparent from the record. The mistake apparent from the record came for consideration before a Division Bench of this Court in the case of Islamuddin and 3 others v. Income Tax Officer and 4 others, 2000 PTD 306, wherein it was held as follows:

"It is also to be admitted that the Income Tax Officer had framed the assessment consciously, deliberately and had given plausible and cogent reasons for arriving at the findings contained in the assessment orders. In the' circumstances' it could not be said that the Income Tax Ordinance, 1979 in framing the assessment had committed any illegality or irregularity which could be said td be a mistake or error apparent on the record or the order so as to be capable of being rectified under section 156 of the Income Tax Ordinance. As to what is a mistake or error apparent from the record and what are the essential conditions which enable the same to be rectified under section 156 of the Income Tax Ordinance was considered by the Hon'ble Supreme Court in the case of Commissioner of Income Tax v. Messrs National Food Laboratories, reported in 1992 SCMR 687. In this case the Supreme Court after examining in detail the provision of section 156 of the Income Tax Ordinance made the following observations:‑‑

"Section 35 of the repealed Income Tax Act, 1922, hereinafter referred to, as `The Act' confers a power to rectify any mistake in the order which is apparent from the record Such power can be exercised suo motu or if it is brought to the notice by an assessee. Therefore, essential condition for exercise of such power is that the mistake should apparent on the face of record; mistake which may be seen floating on the surface and does not require investigation or further evidence. The mistake should he so obvious that on mere reading the order it may immediately strike on the face of it. Where an officer exercising power under section 35 enters into the controversy, investigate into the matter, reassesses the evidence, or takes into consideration additional evidence and on that basis interprets the provisions of law and forms an opinion different from the order then it will not amount to `rectification' of the order. Any mistake which is not patent and obvious on the record, cannot be termed to be an order which can be corrected by exercising power under section 35. In this regard reference can be made to Shaikh Muhammad Iftikharul Haq v. Income Tax Officer, Bhawalpur PLD 1956 SC 524, and Pakistan River Steamer Limited v. Commissioner of Income Tax, 1971 PTD 204. In the present case the mistake pointed out by the petitioner was not of a nature to attract section 35, therefore, the High Court has correctly answered the first question in the negative.

From the above observations of the Hon'ble Supreme Court, it is to be seen that a mistake or an error to be rectifiable under section 156 must be a mistake in the order which is apparent from the record, i.e., to say a finding which is absolutely contrary to or in ignorance or in disregard of the evidence, and material on record or a finding which could not have been arrived at on the basis of the material on record or a mistake or error which may be seen floating and it should be so obvious that on reading of the order it is surfaced on the face of it. The other requirement for a mistake or an error to be apparent from the record is that in exercising power under section 156 of the Income Tax Ordinance, 1979 the concerned Assessing Officer would not be required to undertake reappraisal of the evidence and interpretation of any provision of law for coming to a different opinion. If such an exercise was to be undertaken then it would not amount to rectification of the order and the concerned officer could not ‑ exercise power under section 156 of the Income Tax Ordinance, 1979 for modifying and/or amending the finding or opinion expressed originally".

The Hon'ble Supreme Court has held in a recent judgment, that finding by conscious application of mind cannot be rectified as it is not a mistake apparent from the record. (Mohammad Rafique v. Baqar, 2003 SCMR 1401).

Keeping the above principles in view we will examine, whether the Tribunal committed any illegality, irregularity or impropriety in dismissing the Rectification Application. The admitted facts are that, during the course of hearing of appeals before the Tribunal, it was contended that the issue pertaining to ALV of the property held by the appellants was already decided by the Tribunal vide judgment, dated 12‑1‑1989, pertaining to the assessment year 1978‑79 to 1985‑86 (reported as 1989 PTD (Trib.) 859 and therefore, Inspecting Additional Commissioner had no jurisdiction to take action under section 66‑A of the Income Tax Ordinance, 1979 and that the assessment orders, revised by the Inspecting Additional Commissioner, were dot erroneous as the Assessing Officer had merely followed the orders of the Tribunal for the earlier years. This contention was fully considered by the learned Members of Division Bench of Tribunal, who after consideration of contentions and the earlier order of the Tribunal gave deliberate and conscious findings to the effect that the later judgment of the Tribunal 1996 PTD (Trib.) 122 was applicable. Same contentions were reiterated through Rectification Application and while deciding Rectification Application vide order, dated 14‑7‑1997 impugned in these appeals, it was observed that:‑‑

"Most of submissions made at the bar for the assess pertains to the merits of the case which cannot be considered or ruled upon in these applications under section 156 of the Ordinance".

The learned Members of Division Bench of Tribunal further observed that Rectification Application, which is based upon the sole reason that the learned D.B. wrongly recorded that the facts in the decision recorded in the earlier years, dated 12‑1‑1989 passed in the case of assess were distinguishable from those placed before it, under three years under consideration. The plea that the learned D.B. while deciding appeals for the three years under consideration, misdirected itself in construing the facts and issues which resulted in passing orders suffering from mistake apparent on the face of the order. The contention was not accepted and it was observed that there was no elements of alleged ambiguity, confusion or misconception anywhere in order of the Tribunal and that while deciding the appeal learned D.B. was not oblivious of the reported decision 1989 PTD (Trib.) 859. The learned Members of Division Bench of Tribunal while deciding Rectification Application further observed that the facts before the Tribunal in the subsequent appeals were entirely different from the facts forming basis for the decision, dated 12‑1‑1989. We would like to observe that Mr. Shahaenshah Hussain, learned counsel for the appellant is not able to deny that during the course of hearing of the appeals for the assessment years 1978‑79 to 1985‑86 it was not brought to the notice of the Tribunal by any of the parties that the property was actually fetching much more rent than declared by the appellants while in subsequent years also this fact could not be noticed by the Assessing Officer. However learned Inspecting Additional Commissioner found the material on record to the effect that actually the Building was fetching much more rent than declared by the appellants. The factual position was not denied by the appellants in reply to the show‑cause notice under section 66‑A of the Income Tax Ordinance, 1979 and consequently, the Tribunal while hearing appeals for the assessment years 1991‑92 to 1993‑94 against the order under section 66A of the Income Tax Ordinance, 1979 was considering‑the admitted facts, which were entirely different from the facts forming basis for the order, dated 12‑1‑1989 Thus taking in view the set of facts into consideration, learned Members of Division Bench of Tribunal decided the appeals, pertaining to the assessment years 1991‑92 to 1993‑94 by a deliberate and conscious findings, deviating from the earlier judgment of the Tribunal, dated 12‑1‑1989. On the basic law laid down by the Hon'ble Supreme Court in the judgment referred to above, there was no case of mistake apparent from the record and consequently the learned Members of Division Bench of Tribunal rightly rejected the Rectification Application to which no exception can be taken. The order of Tribunal rejecting the Rectification Application does not suffer from any illegality and infirmity, which is hereby upheld. The question of lam, framed for consideration is answered in negative.

With these findings the appeals stand disposed of. However, since Mr. Shahenshah Hussain, learned counsel for the appellant has addressed very lengthy arguments on merits on the case also, therefore, we would like to give brief findings of the other points as well raised by Mr. Shahhenshah Hussain.

Mr. Shahhenshah Hussain has contended that the Inspecting Additional Commissioner had no jurisdiction under section 66‑A of the Income Tax Ordinance, 1979 to revise the orders pertaining to the assessment years 1991‑92 to 1993‑94 for the reason that the Assessing Officer had merely followed the order of the Tribunal and thus the assessment orders were merged in the order of the Tribunal. We do not find any substance in the contention. The submission is totally fallacious. The concept of merger in judicial/quasi‑judicial proceedings is based on the principle that the appeal is a continuation of original proceedings and when an Appellate Authority hears appeal against the order or, original/lower forum, all the issues, considered and adjudicated upon by the Appellate Court, merge in the order of the Appellate Court. The condition precedent for the law of merger is the existence of an original/lower forum order, and the appeal against the said order. Now coming to the facts of the present case, we find that the earlier order of the Tribunal is dated 12‑1‑1989 relating to the assessment years 1978‑79 to 1985‑86 and assessment orders for the assessment years 19.91‑92 to 1993-94 have been completed several years after .the order, dated 12‑1‑1989 and no appeal was preferred against the said assessment orders before any appellate forum. The law of merger is, therefore, not attracted at all.

There is another important aspect, which is always to be kept in view. The principle of res judicata is not applicable to the Income Tax Law. Every assessment year and order is an independent unit. The Assessment order has to be made on the basis of facts, obtaining in that particular year. If the facts and circumstances are changed in. the subsequent year then neither Assessing Officer nor assessee are bound by any assessment order or any finding by the Appellate Court given in the earlier assessment years. With the changed facts and circumstances, the assessment and the finding can also be changed, to which no exception can be taken. (CIT Central Zone "B", Karachi v. Farrokh Chemical Industries, 1991 SCC 805).

The appeals stand disposed of in terms of the answer to the question of law, as stated above.

S.A.K./K‑96/K Appeals disposed of.