I.T.A. No.5698/LB and M.A. (Cond.) No.831/LB of 2003, decided on 13th January, 2005 VS I.T.A. No.5698/LB and M.A. (Cond.) No.831/LB of 2003, decided on 13th January, 2005
2005 P T D (Trib.) 993
[Income-tax Appellate Tribunal Pakistan]
Before Jawaid Masood Tahir Bhatti, Judicial Member and Mazhar Farooq Shirazi, Accountant member
I.T.A. No.5698/LB and M.A. (Cond.) No.831/LB of 2003, decided on /01/.
13th January, 2005. (a) Income Tax Ordinance (XXXI of 1979)---
----Ss. 134(3) & 66-A---Appeal to Appellate Tribunal---Limitation---Date of communication ---Condonation of delay---Assessee contended that period of limitation in filing the appeal starts from the date of communication of order---Order had never been served or communicated to the assessee and assessee had filed the appeal after obtaining certified copies of the order which might be entertained by condoning delay in filing of appeal---Validity---Assessee s contention was not accepted by the Appellate Tribunal due to the fact that all the issues agitated by him had already been adjudicated and decided by the AppellateTribunal on appeal filed by the Department--- Communicate means, to impart, to reveal, to demonstrate, to bestow, to succeed inconveying one s meaning to others and to have something in corner---Order has been communicated to the assessee if not before filing of appeal before the First Appellate Authority at least at the time ofhearing of appeal before the First Appellate Authority and while processing of departmental appeal before the Appellate Tribunal but assessee failed to file appeal even after the order of Appellate Tribunal within the reasonable time---No plausible explanation had been offered in approaching the Appellate Tribunal after lapse of more than ten years---Order passed under S.66A of the Income Tax Ordinance, 1979 had already been subject-matter of appeal filed by the Department before Appellate Tribunal and the Appellate Tribunal had already given findings on the issues which may be subject-matter of this appeal---No justification was available to condone the delay in filing of appeal---Miscellaneous application for condonation of delay in filing of appeal was rejected by the Appellate Tribunal and consequently, appeal filed by the assessee was dismissed.
Reference Case No.547 of 1962, decided on 7-2-1967; Civil Appeal No.104 of 1965, decided on 28-11-1966; 2002 PTD 549; AIR 1965 Punjab (at Delhi) 315 (V52 C92) and Hind Development Corporation v. Income Tax Officer decided in the Calcutta High Court on June 1, 1978 distinguished.
2001 SCMR 1062 (1072) rel.
(b) Income Tax Ordinance (XXXI of 1979)---
----S. 154---Civil Procedure Code (V of 1908), O. III, R. 2(b), O. V, Rr.23(1) & 17---Service of notice---If service of notice is on his salesman not authorized in writingby assessee to accept such notices, even if fact of service of notice is within the knowledge of assessee such service of notice is not valid in law.
Civil Appeal No.104 of 1965, decided on 28-11-1966rel.
(c) Income tax---
----Condonation of delay---Principles of condonation of delay to be kept in mind by every judicial or quasi-judicial forum while dealing with question of limitation.Â
2002 PTD 549 rel.
(d) Income Tax Ordinance (XXXI of 1979)---
----S. 134(3) & 66-A---Appeal to Appellate Tribunal---Limitation for filing of appeal---Condonation of delay---Void and illegal order---Assessee contended that no limitation runs against the void order and the order of the Inspecting Additional Commissioner under S.66-A of the Income Tax Ordinance, 1979 was ab initio void and illegal---Validity---Contents of order had already been upheld by the Appellate Tribunal and at this stage such order could not be held to be void or illegal by Appellate Tribunal--Even against the void order, an aggrieved person was required to initiate proceedings within reasonable time, instead of invoking the jurisdiction of the Courts after lapse of considerable time when the order under attack in fact had achieved finality.
Shafqat Mehmood Chohan for Appellant.
Anwar Ali Shah, D.R. for Respondent.
Date of hearing: 25th September, 2004
ORDER
The above titled appeal along with application under section 5 of the Limitation Act for condonation of delay in filing of appeal under section 134 of the Repealed Income Tax Ordinance, 1979 has been filed by the assessee against the impugned order of the learned IAC, dated28-6-1993 for the assessment year 1989-1990.
Assessee in this case is an individual/Director of Messrs SunshineCottonMillsLimited,Originalassessmentmadeundersection 59 of the Repealed Income Tax Ordinance, 1979 on 30-11-1989 was cancelled vide impugned order. The relevant para. of the impugned order is reproduced hereunder:--
Assessment in the above noted case was finalized undersection 59 on 30-11-1989. This assessment order is erroneous insofar as it is pre-judicial to the interest of Revenue. A show-cause notice was issued under this Officer letter No.131, dated 3-9-1992 requiring the assessee to offer explanation if any by 15-9-1992. Show-cause notice is reproduced as under:--
The examination of reconciliation statement annexed with the wealth statement as at 30-6-1989 reveals that during the period under review, you disposed of 84 Kanals and 13 Marlas land for a total consideration of Rs.73,73,750. By virtue of this transaction, gain of Rs.53,94,048 was included in your reconciliation statement, to explain the accretion in wealth. This gain was claimed exempt being capital gain and the claim was erroneously accepted by the Income Tax Officer. This gain arose from transaction which was adventure in the nature of trade.
In response to this show-cause notice, Mr. Iqbal Khawaja, A.R. of the assessee submitted explanation vide letter No. nil, dated 3-10-1992 which is placed on file. The explanation given by the A.R. has been duly considered and found unsatisfactory. The assessment order, dated 30-11-1989being erroneous insofar as it is prejudicial to the interest of Revenue, is hereby cancelled. The Assessing Officer is, therefore, directed to make assessment and charge tax in the light of the observation indicated above .
2.The Assessing Officer subsequent to the impugned order issued a show-cause notice vide No.422, dated 27-2-1996 to the assessee directing to explain the purpose of purchase and sale of land. The assessee through her AR filed reply, dated 1-4-1996 along with certain documents. The Assessing Officer found the contention of the assessee lacking in substance due to the following reasons:--
(1)It is a known fact that the agricultural land around Lahore city is fast transforming into the commercial and residential estate due to fast expansion of the city population and business. The non-disclosure of the actual whereabouts of the land in question further lend to this opinion. Besides the assessee has not elaborated credence as to how she failed to exploit the agricultural land to her benefit.
(2)The amount of profit earned by the assessee i.e. Rs.53,94,048 itself suggests that the assessee was waiting for opportune time to dispose of the land in order to maximize her profit. This view is further reinforced by her admission that the so realized as again pumped into business money.
(3)As regards her assertion that the same and purchase of land is not her line of business, the following facts with themselves falsify this notion:
(a)In the assessment year 1990-91, the assessee sold her property bearing No.72-D-I, Gulberg, Lahore after getting this property commercialized by L.D.A.
(b)In the assessment year 1991-92, the assessee againpurchased2-subplots on
Main Road, Gulberg, Near Sher Pau Bridge, Lahore and raised plaza commonly known as SunshinePlaza. This property was rented out to various companies on fabulous value. (c)In the assessment year 1993-94, she again purchased 2-subplots adjoining the above plot and constructed two town houses.
(d)In addition, she is the member of two Cooperative Societies namely Gold Star Coop. Housing Society and Coop. Housing Society. The main object of which is the deal in real estate .
The Assessing Officer due to the above reasons treated the profit earned by the assessee to be of business nature and not a solitary and isolated transaction and therefore, assessed the income of the assessee at Rs.54,64,595 as against Rs.70,547 originally assessed vide his order under sections 62/66A.
3.Against that order of the Assessing Officer under sections 62/ 66-A the assessee filed appeal before the learned CIT(A) which was allowed vide order, dated 31-8-1996 with the following observation:--
The arguments as put forth were given due consideration and are plausible and go in favour of the Appellant on the following grounds:--
(a)From the record, it is clear that assessment in this case was framed under section 59 originally without any detail of document and hence, the assessment in this case if at all warrantedunderlawshouldhavebeenreopenedundersection 65. The provisions of section 66-A are not attracted as per wording of section itself. The section 66-A action as taken purely on subsequent information and hence the case should have been reopened under section 65 only. The present action under section 66-A being not warranted and hence on this score only, the original assessment framed under section 59(b) is being restored.
(b)The IAC and Deputy Commissioner of Income Tax both are unable to establish any profit motive when the land waspurchased away back 1985 for agricultural purpose. Since the character of this land remained throughout as of agriculture, so the attempt to treat the sale of agricultural land as venture in nature trade is legally not permissible and on this score, the department s case is also failed. The judgments of Supreme Court as referredfully cover the case of Appellant and hence, the appeal on this score also succeeds. The addition of Rs.53,94,048 is hereby deleted .
4.The Department against that order of the learned CIT(A), dated 31-8-1996 filed appeal before this Tribunal, which has been decided by this Tribunal vide order, dated 23-4-2003 in ITA No.7912/LB/1996 (assessment year 1989-1990). In this order, all the facts and the law relevant to the case have been discussed in detail. We, therefore, for the convenience find it appropriate to reproduce hereunder the concluding paras of the order of this Tribunal, dated 23-4-2003:--
(22) We have heard both sides and have perused the case-law cited and examined the available record and our findings are record as under:--
(a)The CIT(A) has indeed illegally assumed jurisdiction over 66A matter and no appeal against IAC exercise of revisionary jurisdiction lies before the First Appellate Authority. The CIT(A), Zone-I, Faisalabad has no jurisdiction to take up matter pertaining to exercise of revisionary jurisdiction under section 66-A by the IAC and his action in this regard is patently illegal. The assessee went in appeal before the CIT(A) after order under section 62 had been passed by the DCIT subsequent to cancellation of original order under section 59(b) by the IAC. The CIT(A) could only have taken uptheincomedeterminedby the DCIT consequent to finalization of assessment under section 62 and the CIT(A) could not examine the merits of the IAC s exercise of revisionary jurisdiction under section 66A. All observations made in the findings recorded by the CIT(A) with regard to exercise of revisionary jurisdiction by the IAC under section 66A are, therefore, required to be ignored. So ordered.
(b)The arguments made by the AR contesting the IAC s recourse to the provisions of section 66A is an attempt to contest the IAC s action under section 66A without filing formal appeal againsttherevisionmadebytheIAC.Inourconsideredjudgment,theassesseecannotatthis stageleadargumentsand cite case-law against the order passed under section 66A by the IAC, as no appeal has been filed by the assessee against the said order. We will, therefore, ignore the arguments made and the case-law cited by the AR against the IAC s order under section 66A against which no appeal has been filed by the assessee.
(c)While it is a fact that the assessee has not contested the IAC s order under section 66A before the Tribunal and no appeal has beenfiled,however,inouropinion,thisdoesnotdivestthe assessee of the right to contest the DCIT s orderundersection 62. Once the IAC had cancelled the original order under section 59(b) only the return of income for the year remained in the field and this was then taken up by the DCITfor (fresh) assessment under section 62. No doubt the DCIT was required to pass normal law order in consequence of the IAC s finding that the gain in sale of Raiwind land was a revenue gain being an adventure in the nature of trade and was not a capital gain. However, this does not mean that the DCIT s role was purely passive and that he was bound under all circumstances to pass an order of assessment strictly in line with the IAC s findings/ observations recorded in his revisionaryorder. Thus if proof positive had been placed before the DCIT by the assessee to establish conclusively that the gain was indeed a capitalgain, the Assessing Officer could have accepted the assessee s contention notwithstanding the IAC s revision. However, the record shows that the assessee was unable to lead necessary evidence before the DCIT to establish her contention that the gain constituted capital gain. That being so the DCIT brought the gain to tax as business profits. All this goes to show that the DCIT was not bound, under all circumstances, to merely implement the IAC s order and he could have taken a different view under certain circumstances. This leads to the inescapable conclusion that the order under section 62, though a sequel to the IAC s order under section 66A, is an independent order and thus is appealable before the CIT(A). This order is thus not akin to an order to give effect to a decision in appeal (appeal effect) where the DCIT has no choice but to strictlyimplement the findings of the Appellate Authority. We, therefore, hold that the CIT(A) adjudication dealing with the DCIT s treatment of gain arising from sale of Raiwind land is within his jurisdiction and has been rightly contested by Revenue before the Tribunal.
(d)The core issue here is whether the transaction of sale of Raiwind land canconstitute an adventure in the nature of trade. To resolve the matter, we have to see first what is the assessee s nature of trade. As per return of income filed, the assessee is a Director in the Sunshine Group of Industries in which her father plays a dominant role. The facts on record go to show that the assessee, besides being Director also undertakes sale/purchase of immovable property and the DCIT has detailed a number of instances of such transactions entered into by the assessee. What does this mean? The only logical conclusion is that these transactions have been entered into by the assessee as a business venture. Notwithstanding, the assessee s AR s protestations to the contrary, the multiple transactions of sale/purchase of property lead inescapably to the conclusion that the assessee is actively engaged in the business of purchase/sale of immovable property held as stock as trade and the gains arising therefrom constitute business profits. Given this context, the purchase and sale of Raiwind land would appear to be a purely business transaction. The assessee has emphasized that the Raiwind land would appear to be a purely business transaction. The assessee has emphasized that Raiwind land was allegedly agricultural land and could not be treated at par with the other immovable property units purchased/sold by her as these were admittedly not agricultural in nature. We have looked into this aspect and we find that firstly the necessary documentation (Khasra Girdavri) to establish its alleged agricultural character does not appear to have been placed before the DCIT or even the CIT(A) and was not available with the AR when he argued the case before the Tribunal. Further, we note that in many cases, land though originally classified as agricultural is fast being transformed into urban land as the urban perimeter is pushed outwards. Thus a person with foresight, business acumen and necessary financial resources can always purchase suitable land on the urban outskirts in order to profit from its escalation in value as the urban perimeter is pushed outwards -- as the assessee has one, and the resultant gain would constitute business profits, especially when the property is not held for any significant length of time, but is purchased/sold at relatively short intervals as in the case of the present assessee. Normally when property is held as an investment , the time frame is invariably extended but when held as business stock in trade , the retention period is much shorter and the stock frequently rotated in assessee s case it is clear that the land in question has not been held for an extended period and this land along with assessee s other property units can be seen as the assessee s overall stock in trade of immovable property.
(e)Where immovable property is held as stock in trade and it is the business of the assessee to buy and sell such property for profit then, in such circumstances, the (immovable) property will not constitute a capital asset . Thus in such circumstances i.e. when immovable property is held as stock in trade, the gain realized on its sale can be brought to tax as business profits under section 22 of the Ordinance, 1979. Resultantly, all gain realized on the sale of immovable property is not necessarily capital gains and can therefore be brought to tax by the DCIT as revenue gain, business profits where the situation so warrants.
(f)The apex Court judgment referred to by the assessee has been looked into and is not found applicable in assessee s case, as it deals with the sale of immovable property that had been acquired by a limited company from members of a family and when company had been set up as a property holding company to develop the family property. No purchase from outsiders was made at all. In fact, the company was prohibited by its memorandum of association from carrying on the business of buying and selling of immovable property. Some land owned by the company wasacquired under the provisions of Land Acquisition Act at the instance of the Ministry of Defence, Government of Pakistan, and compensation was paid to the company for the compulsory acquisition. The company disbursed the compensation amount to the appellant who was owner of the property acquired by the Ministry of Defence/Government of Pakistan. The gain realized by the appellant on the compulsory acquisition of land by Govt. was held to be capital gain. It is to be noted that the land in question has not been sold in the open market but has been compulsorily acquired by Government. There is thus no normal purchase/sale of immovable property (land) here at all. As explained supra, this is not so in the assessee s case. The assessee has actually purchased land from the market and sold it in the open market after a short period without making any improvement thereon and has realized a gain on the disposition which is a revenue gain as it relates to the assessee s business of purchase and sale of immovable property as detailed by the DCIT in the assessment order.
(g)In the case of the Karachi High Court judgment also, the facts are distinguishable from assessee s case insofar as that judgment pertains to a property developer . Property Development by definition entails significant outlay of resources to develop an area as say a housing society . It entails the plotting of land and investment in infrastructure so as to make it attractive for buyers. As the benefits to the developer are spread over an extended time frame and as these benefits are consequential to the capital investment made by him in its development, the profits that he realizes on the eventual sale of the (developed) property units constitute capital gains. The present assessee is not placed in such a situation.
(h)The assessee comes from a well-known business family and has sound business credentials. The assessee has no agricultural interest/assets and has no expertise whatsoever in this area. Her assertion that the Raiwind land was intended to be put to agricultural use by her is, therefore, not at all plausible. The assessee made no efforts whatsoever to put the land to agricultural use. She made no purchase of fertilizer or agricultural machinery to prepare the land foragricultural use.
(i)Even if for argument sake, it is conceded that the Raiwind land transaction is unique, even then it can constitute an adventure in the nature of trade as the ambient circumstances strongly suggest that the property had been purchased with a view to its sale at an opportune moment and given assessee s other dealings in immovable property, this Raiwind land transaction is part of the overall of business of the assessee.
The ambient circumstances are of overriding significance there and these show that the assessee made no effort whatsoever to make any improvements on the Raiwind land purchased by her. No plotting of the land was done and no investment in infrastructure was made. Thus the land was not held by her as an investment because whenever a significant block of land is held an investment then invariably improvements are made by way of investment in infrastructure so as to increase its sale value significantly vis-a-vis the purchase price. As pointed out above, the assessee could nor possibly have held the land for agricultural purposes as not only she had no experience whatsoever in this area but also the fact got to show that after its purchase, the assessee made no efforts to actually utilize the land for agricultural purposes. She did notpurchase any machinery or fertilizer and did not hire any labour to cultivate the land. Under these circumstances, it is obvious that the assessee had purchased the land with the intention of selling it at an opportune moment without making any improvement thereon. The fact that she sold the land en bloc also goes to show that she was not interested in any plotting on the land and the sale of land in small units i.e. 1 Kanal or 2 Kanalplots. That being so, the Raiwind land must rightly be treated as assessee s stock in trade and the profits realized on its disposition must therefore constitute business profits and not capital gain.
We, therefore, vacate the order of the CIT(A) and reinstate the order of the DCIT .
5.Now the assessee at this belated stage has filedthis appeal beforethis TribunalagainsttheorderofthelearnedIAC,dated28-6-1993. Regarding the main appeal, following grounds of appeal have been framed by the assessee:--
(1)That the order passed by the learned Inspecting Additional Commissioner of Income Tax under section 66A of the Income Tax Ordinance, 1979, dated 28-6-1993 is illegal, void, ab initio and without lawful authority.
(2)That the learned Inspecting Additional Commissioner of Income Tax has erred in law, as the order passed under section 59B of the Ordinance was neither erroneous nor prejudicial to the interest of the Revenue.
(3)That the learned Inspecting Additional Commissioner of Income Tax has only issued the show-cause notice under section 66A of the Ordinance for interpretation of the transaction already shown as capital gain against the sale of agricultural land.
(4)That the order passed by the learned IAC, dated 28-6-1993 served upon the Deputy Commissioner of Income/Wealth Tax on 29-6-1993 could not be implemented within stipulated period of two years; hence the order passed by the learned IAC is illegal, void having no legal sanctity.
(5)That the amount against the sale of agricultural land was purely capital gain, same can never be treated as adventure in the nature of the trade.
(6)That since the order passed under section 66A of the Ordinance allegedly passed on 28-6-1993 was never served upon the assessee, hence it has no legal effect.
(7)That the order allegedly passed on 28-6-1993 was required to be served upon the assessee within stipulated period of four years which could not be done hence, the same is time barred and having no legal effect.
Underthesecircumstances,itishumblyprayedthattheappeal may very graciously beacceptedandtheorderpassedby the learned IAC under section 66A of the Ordinance, dated 28-6-1993 may be declared without lawful authority, void, ab initio having no legal effect and the order passed by the Assessing Officer under section 59B of the Ordinance may be directed to be restored .
6.While regarding application under section 5 of the Limitation Act for condonation of delay in filing of appeal, following grounds have been framed on behalf of the assessee:--
(1)That the accompanied appeal has been filed before this learned Tribunal which is pending adjudication in which no date of hearing has been fixed so far.
(2)That the assessment in the case of the assessee was finalized for the assessment year 1989-90 under section 59B of the Ordinance, dated 30-11-1989. (Copy of IT-30 is attached as Annex-A).
(3)That the show-cause notice under section 66A of the Ordinance, dated 3-9-1991 was received by the assessee issued by the then Additional Commissioner of Income/Wealth Tax Mr. Munir Ahmad Sheikh. (Copy of notice Annex-B).
(4)That the assessee replied the said notice prior 15-9-1992 fixed by the concerned IAC. (Copy of the reply Annex-C).
(5)That the assessee received notice under section 61 of the Ordinance for the assessment year 1989-90, dated 2-4-1995 for compliance on 23-9-1995. (Copyof notice Annex-D).
(6)That the assessee filed an application, dated 17-4-1995 with the Deputy Commissioner of Income/Wealth Tax with the submission that the proceedings under section 66A were closed by the concerned IAC. It was further contended that the notice under section 61 was time barred hence same may be withdrawn, as the concerned learned IAC had filed the proceedings. (Copy of application Annex-E).
(7)That the assessee again received notice under section 61 of the Ordinance, dated 13-2-1996 for the year, 1989-90 for compliance on 18-12-1996. (Copy of notice Annex-F).
(8)That the assessee again replied the said notice on 18-2-1996 with the submission that the order under section 66A of the Ordinance could not be passed bythe learned IAC after a lapse of four years. (Copy of Annex-G).
(9)That the assessee also filed the same application on 18-2-1996 with the learned IAC regarding non-issuance of the order allegedly passed on28-6-1993 as well as to the Commissioner of Income Tax/Wealth Tax for necessary action. However, till to date, the concerned authorities have done nothing. (Copy of the application Annex-H).
(10)That the applicant received an order under sections 62/66A of the Ordinance, dated 22-5-1996 and appeal before the learned CIT(A) was filed on 15-6-1996 and same was decided in the favour of the applicant on 31-8-1996. (Copy of order Annex-I).
(11)That the learned CIT(Appeals) accepted the appeal of the assessee and the order of the Assessing Officer was vacated on the basis of legal grounds as well as on the basis of merits.
(12)That the Department field an appeal before the learned Tribunal, same was decided vide order, dated 23-4-2003. (Copy of order of the Tribunal Annex-J).
(13)That the assessee categorically submitted before the appellate authorities that neither any order under section 66A of the Ordinance ever has been passed nor it was served upon the assessee/applicant, hence the sanctity of the order undersections 62/66A of the Ordinance does not attach to the said order. Thus, proceedings were illegal and void ab initio.
(14)That the Department never supplied evidence regarding issuance of service of the order passed under section 66A of the Ordinance, dated 28-6-1993 before the appellate authorities.
(15)Thatbeingfailuretogetthecopyoftheorderundersection 66A, the assessee filed an application along withpayment of Challan, dated 21-11-2003 with the Taxation Officer, Circle-04, Companies Zone-I, for issuance of the attestedcopyof thesaidorder. (CopyoftheapplicationAnnex-K).
(16)That on the receipt of attested copy of the said order, the appeal has been filed immediately by the assessee/applicant without any delay.
(17)That the order allegedly passed on 28-6-1993 is void ab initio and illegal, as same was never passed nor it was served upon the assessee.
(18)That non-filing of the appeal on the part of the assessee was beyond the control of the assessee/applicant, as no order was served uponthe assessee in spite of its repeated requests.
(19)That the order under section 66A of the Ordinance allegedlypassed on 28-6-1993 is void, illegal and ab initio; hence, no limitation runs against the said order.
Under these circumstances, it is humbly prayed that the appeal of the assessee may very graciously be entertained by allowing condonation of delay in filing of the said appeal .
The assessee has also sworn affidavit regarding correctnessof the above said grounds.
7.The main contention of the learned counsel for the assessee before this Bench is that the period of limitation in filing the appeal as provided in section 134(3) of the Repealed Ordinance, 1979 will start from the date of communication of the order and as in this case, impugned order has not been served, therefore, the present appeal may be entertained by allowing condonation of delay in filing of the appeal. The matter was partially heard and adjourned due to non-availability of recordsetc. on various dates of hearing from 14-5-2004, 17-6-2004,20-7-2004, 31-7-2004, 7-8-2004, 21-8-2004, 4-9-2004, 11-9-2004 and was finally heard on 25-9-2004. It has been contended by the learned counsel for the assessee that the impugned order has never been served or communicated to the assessee and he has filed the appeal after obtaining certified copies of the order. He has, in this respect, placed before ushisletter,dated21-11-2003 to the Taxation Officer wherein on behalf of the assessee, it has been requested as under:--
In the case of the above named assessee, alleged order under section 66A, dated 28-6-1993 for the assessment year 1989-90 has been received in your office on 29-6-1993. As no order could be received or find out by the assessee till to date. On the other hand, coy received by our office on 29-6-1993 may very kindly be attested and issued to the assessee and obliged .
In support of his contention, the learned counsel has placed reliance on the decisions of the Hon ble High Courts of India and Pakistan, but we are of the view that no inference can be drawn from the reported cases in favour of the assessee in view of the particular circumstances of the case and the reported cases being distinguishable from the instant case. Firstly, we take the case decided by the Hon ble Karachi High Court in the matter of Haji Abdul Rahim Haji Abdullah and others v. Commissioner of Income Tax in a Reference case No.547 of 1962, decided on 7-2-1967. In this case, during the course of assessment proceedings, the authorized representative of the assessee ontheunderstandingthattheassessmentwouldbecompletedverysoon, made an application for certified copy of the assessment order on 14-12-1950 which was made available to the assessee on 21-7-1953, as the assessment in the case was completed on 27-9-1951. The appeal against that order was filed before theAppellate Assistant Commissioner on the 1st August, 1953 which was dismissed being barred by time for the reason that application for copymadeon14-12-1950 was not valid, as it was not made by a person who was not authorized on this behalf. The Appellate Tribunal on appeal by the assessee held that though the appeal was in fact time barred, the Appellate Assistant Commissioner should have considered the question of condonation of delay and the case was remanded back to the AAC who again dismissed the appeal in limine holding that no case for condonation had been made out by the assessee. When thematteragaincameupbeforetheTribunalinthesecondround of appeal, the Tribunal held thatAACwasjustifiedinrefusingto condone the delay. The reference Application filed by the assesseewas also rejected wherein the assessee has proposed the following questions:--
(i)Whether the appeal was barred by time.
(ii)Whether it was not a fit case for condonation of delay.
The Hon ble High Court in this case held that in cases where the copy is applied for within limitation and it is only because in the preparation of the copy that the appellants are unable to present the appeal, that is considered as sufficient ground for condonation of delay.
But in the case in hand, circumstances are totally different and this decision of the Hon ble High Court is in no way applicable.
Likewise, the other case referred by the learned counsel in the matter of Commissioner of Income Tax v. Muhammad Idris Barry and Company, Lahore, the Hon ble Supreme Court of Pakistan while deciding Civil Appeal No.104 of 1965, decided on 28-11-1966 held that if service of notice is on the salesman not authorized in writing by assessee to accept such notice, even if fact of service of notice is within the knowledge of assessee, service of notice is not valid in law as per Civil Procedure code, 1903 Order III, R. 2(b), Order V, rules 23(1), 17.
The other case referred by the learned counsel for the assessee is of the Hon ble Lahore High Court reported as 2002 PTD 549 wherein, in the matter of Sales Tax, it has been held that to condone or not to condone of delay under Limitation Act rests upon consideration of sufficient cause andthe same actually means the peculiar circumstances of that very case. Every case needs to be considered keeping in view the facts obtaining therein. These cannot be a precise definition of sufficient cause, nor there can possibly be laid down the exact parameters which can fit in the situation in every case. Attempt to define sufficient cause would amount to curtail judicial power and discretion which the legislature has left open and unfettered in the form. In this case, the Hon ble High Court has settled following principles which has been directed to be must kept in mind by every judicial or quasi-judicial forum while dealing with questions of condonation of delay:--
(i)Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
(ii)Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned the highest that can happens is that a case would be decided on merits after hearing the parties.
(iii) Every day s delay must be explained does not mean that a pedantic approach should be made. Why not every hours delay, every second s delay? The doctrine must be applied in a rational, common sense and pragmatic manner.
(iv)When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a on-deliberate delay.
(v)There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.
(vi)It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so .
The learned counsel has also referred a case of Indian Jurisdiction reported as AIR 1965 Punjab (at Delhi) 315 (V52 C92), but we have found that in this case, referred law (Slum Areas (Improvement and Clearance) Rules, 1957) specifically provided that the competent authority shall furnish a copy of the order refusing to grant the permission with brief statement of reasons for refusal and every appeal under section 20 of the Slum Areas (Improvement and Clearance) Act 1956 shall be filed within a period of 30 days of the date of communication of the order of the competent authority and appeal prepared after the said period shall be dismissed. But in the instant case, facts and circumstances are totally different.
In another case of the Indian Jurisdiction titled Hind Development Corporation v. Income Tax Officer decided in the Calculate High Court on June 1, 1978, it has been held that The only condition that is to be fulfilled is that the Tribunal must be satisfied about the existence of sufficient cause for the delay in filing the memorandum of appeal and if the Tribunal is satisfied about the same, the Tribunal can condone the delay .
8.Now coming to the fact of the instant case, we have found that the learned counsel for the appellant/assessee argued before this Tribunal while proceeding of appeal filed by the Department that the order of the DCIT has been framed under section 62 as the original order under section 59(b) had been cancelled by the IAC under section 66A and as appeal lies before the CIT (Appeals) against an order passed under section 62, the same had been rightly contested by the assessee and the adjudication as made by the CIT(Appeals) was in order .
This above contention of the learned counsel for the assessee is part of the order of this Tribunal, dated 23-4-2003 in para. 5. It clearly shows that the impugned order of the learned IAC under section 66A was communicated to the assessee but he did not file appeal against that order, which he may file during that proceeding of appeal so that both the appeals could be decided collectively. But the assessee has not taken the benefit of this option and has remained silent up to 5-12-2003 when he has filed the appeal even after more than seven months of the order of this Tribunal inthe appeal filed by the Department arising out of thesame impugned order of the learned IAC which is subject-matter of the present appeal.
9.We have further noted that the contentions as made by the learned counsel for the assessee as mentioned in the paras. 6 to 9 of the Tribunal order, dated 23-4-2003 very clearly show that the impugned order of the learned IAC was very much communicated to the assessee as he has argued on each and every fact of the case as disputed in the impugned order of the learned IAC. We are, therefore, of the view that at this belated stage, the assessee s contention that the impugned order has not been communicated to him, is not acceptable especially due to the fact that all the issues agitated by the assessee have already been adjudicated and decided by this Tribunal vide order, dated 23-4-2003 on the appeal filed by the Department.
10.We have also consulted the dictionary meaning of the word communicate , which means, to impart, to reveal, to demonstrate, to bestow, to succeed in conveying one s meaning to others and to have something in corner.
We are of the view that the impugned order in accordance with the above dictionary meanings has been communicated to the assessee if not before filing of appeal before the learned CIT(A) on 15-6-1996 atleast at the time of hearing of appeal before the learned CIT(A) and while proceedings of departmental appeal before the Tribunal. But the assessee failed to file appeal even after the order of this Tribunal within the reasonable time.
11.Regarding the contention of the assessee that no limitation runs against the void order and the impugned order of the learned IAC is ab initio, void and illegal, we are of the view that the contents of the impugned order have already been upheld by this Tribunal vide order, dated 23-4-2003 and at this stage, the impugned order cannot be held to be void or illegal by this Tribunal. We are further of the view that even against the void order, an aggrieved person is required to initiate proceedings within reasonable time, instead of invoking the jurisdiction of the Courts after lapse of considerable time when the order under attack in fact had achieved finality. For this view, we have taken strength from the decision of the Hon ble Supreme Court of Pakistan reported as 2001 SCMR 1062 (1072). In the present case, no plausible explanation has been offered in approaching this Tribunal after lapse of more than ten years. The impugned order under section 66A of the Repealed Ordinance was passed by the learned IAC on 28-6-1993 which has already been subject-matter of the appeal filed by the Department before this Tribunal and this Tribunal has already given findings on the issues which may be subject-matter of this appeal. Therefore, in these circumstances, no justification is available to condone the delay in filing of appeal.
12.The miscellaneous application for condonation of delay in filing of appeal is, therefore, rejected. Consequently, the appeal filed by the assessee is also dismissed.
C.M.A./362/Tax (Trib.)Appeal dismissed.