COMMISSIONER OF INCOME TAX (APPEALS-I), FAISALABAD VS Messrs FLORA FOOD INDUSTRIES (PVT.) LTD., FAISALABAD
2005 P T D 1012
[Lahore of High Court]
Before Syed Zahid Hussain and Muhammad Sair Ali, JJ
COMMISSIONER OF INCOME TAX (APPEALS-I), FAISALABAD
versus
Messrs FLORA FOOD INDUSTRIES (PVT.) LTD., FAISALABAD
P.T.R. No.59 of 2001, decided on /01/.
21st September, 2004. Income Tax Ordinance (XXXI of 1979)---
----Ss. 136(2), 108(b), 139 & 142---Appeal to High Court---Penalty---Question as proposed for determination by High Court, was already proposed and raised by Revenue in an identical appeal and other cases of similar nature---High Court returned a negative answer to the question as framed in the case for determination---Other questions framed in the case had no relevancy to the order of Tribunal and the grounds stated therein while rejecting departmental appeal---High Court declined to answer any of said questions as no distinguishing features had been pleaded by the department.
Mian Yousaf Umar for Petitioner.
Date of hearing: 21st September, 2004.
ORDER
Upon the finding of the respondent s default in filing monthly statements under section 139 of the late Income Tax Ordinance, 1979 read with Rule 53 thereof, penalty of Rs.32,600 under section 108(b) ibid was imposed. On appeal, the Commissioner of Income Tax (Appeals-I), Faisalabad through the order, dated 27-11-1999 held that the provisions of sections 139 and 142 of the Ordinance of 1979 were not attracted as the respondent-Company had not made payments of sums to which sections 50(3), 50(3-A) and 50(4) applied. An appeal was filed thereagainst by the Deputy Commissioner of Income Tax, Faisalabad before thelearned Income Tax Appellate Tribunal. The departmental appeal was dismissed by the learned Tribunal for the reasons that:--
(i)Before the learned CIT (Appeals), the plea of the assessee is that no payments were made by the assessee which attracted the provisions of section 139 and section 142 of the Ordinance in view of which the penalties were set aside. The plea of the learned DR is that every person is bound to file such statement irrespective of the fact whether any such payments had made or not. However, this plea is against the provision of the law, which states that the statement shall be filed if any payment chargeable to tax had been made.
(ii)In any case, no prejudice has been caused to the Revenue.
2.The Commissioner of Income Tax, Companies Zone, Faisalabad, filed a reference application before the learned ITAT for referring the proposed questions of law tothis Court. The learned Tribunal held that the questions of law as proposed did not arise out of the Tribunal s order, dated 10-11-2000. The departmental reference application was therefore, dismissed.
3.Aggrieved therefrom the present application under section 136(2) of the late Income Tax Ordinance, 1979 was filed by the department proposingthefollowingquestionsforthedeterminationofthisCourt:--
(i)Whether Income Tax Rules, 1982 are subordinate legislation of Income Tax Ordinance, 1979?
(ii)Whether section 142 of the Income Tax Ordinance, 1979 is governing section in respect of Rule 61 of the Income Tax Rules, 1982?
(iii)Whether under the facts and circumstances of the case, the learned Tribunal was justified to hold that the provisions of section 108(b) are not attracted in the event of non-compliance of Rule 61?
4.Heard.
5.The questions as herein proposed were proposed and raised by Revenue in an identical PTR No.31 of 2001 and other cases of similar nature. A learned Division Bench of this Court (of which one of us was a member) through judgment, dated 12-3-2003 adopted the under produced reasoning recorded in judgment on I.T.A. No.402 of 1998:--
As observed earlier the provisions of section 139 read with the power of C.B.R to make rules under section 165 contain ample authority to make rules and to provide for a time limit for filing of a statement contemplated therein. The fact that the rule did not mention a particular provision under which it required doing of a particular act is not of much relevance when the provision itself either identifies a particular rule or allows a power for making of such rule through subordinate legislation. Similarly the mentioning of certain sections of the Ordinance in some of theRules will not by itself mean that those rules which do not make reference to any particular provision of the Ordinance lose their efficacy and legal effect.
And it was thus held that in the light of various reasons stated in the above order we will return a negative answer to the question No.3 as framed. Questions Nos. 1 and 2 having no relevancy with the order of the Tribunal and the grounds stated therein while rejecting the departmental appeal, we will decline to answer any of them .
6.No distinguishing features have been asserted or pleaded by the department in this case. We, therefore, in view of the above referred judgment, dated 12-3-2003 in PTR 31 of 2001 return a negative answer to the question No.3 (as framed and proposed) and also hold that questions Nos. 1 and 2 not arising from the order of the learned Tribunal, do not deserve to be answered. Decided as above.
H.B.T./C-44/LOrder accordingly.