I.T.A. No. 1547/KB of 2003, decided on 26th September, 2005. VS I.T.A. No. 1547/KB of 2003, decided on 26th September, 2005., 2006 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2361 (2005)

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

----Ss. 131 & 210---Income Tax Ordinance (XXXI of 1979), S.134---Appeal to the Appellate Tribunal---Filing of appeal by Deputy Commissioner/Commissioner---Income Tax Ordinance, 1979 provides that the Deputy Commissioner shall file an appeal before the Appellate Tribunal, if the Commissioner objects to any order passed by the Appellate Additional Commissioner and directs the Deputy Commissioner to institute the appeal; contrary to this, S.131 of the Income Tax Ordinance, 2001 empowers the Commissioner only, to file the appeal before the Income Tax Appellate Tribunal if he objects to the order passed by the Commissioner of Income Tax (Appeals)---Term "direction" envisaged in the Income Tax Ordinance, 1979 finds no place in the Income Tax Ordinance, 2001, as such, even under the directions of the Commissioner, no appeal could be lodged challenging the order passed by the Commissioner of Appeals, as absolute authority vests in the Commissioner himself to file the appeal---Section 210 of the Income Tax Ordinance, 2001 empowers the Commissioner to delegate powers vested in him in writing to any Taxation Officer, the Commissioner under the said provision may delegate all of his powers/authority under the Income Tax Ordinance, 2001 other than the power of further delegation---Exercising authority under S.210 of the Income Tax Ordinance, 2001, the Commissioner may delegate the powers of filing of appeal to the Deputy Commissioner, if he so desires, in that case, S.134(2) of the Income Tax Ordinance, 1979 and S.131 of the Income Tax Ordinance, 2001 will have concurrent effect.

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

----S. 210---Income Tax Appellate Tribunal Rules, 1981, R.11(2)(ii)---Delegation---Signature on appeal by the Taxation Officer---Procedure---Procedure of the Income Tax Appellate Tribunal Rules, 1981, provides that in an appeal at the instance of the Commissioner there shall be appended a certificate to the memorandum of appeal stating that the appeal had been preferred in exercise of the powers delegated by the Commissioner under S.210 of the Income Tax Ordinance, 2001, in case the appeal was signed by the Taxation Officer.

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

----Ss. 210 & 131---Delegation---Appeal---Grounds of appeal were signed by the Taxation Officer instead of Commissioner of Income Tax---Validity---Taxation Officer in the absence of delegated powers under S.210 of the Income Tax Ordinance, 2001 had no authority to institute the appeal, where the Income Tax Ordinance, 2001, had prescribed any procedure for the doing of a thing such procedure was to be followed---Since the provisions are exhaustive and clear insofar as they prescribe a particular procedure and as there was a specific prohibition of a particular act, the Court could not circumvent the procedure in the exercise of its inherent power---Any such act was wrongful exercise of powers not vested in Taxation Officer.

I.T.A. No. 1446/KB of 2003 in case of Messrs Javed Arif Fattani Estate Agency; 1996 PTD (Trib.) 334 and 1972 SCMR 73 rel.

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

----Ss. 210 & 131---Delegation---Appeal---Grounds of appeal were signed by the Taxation Officer instead of Commissioner of Income Tax---Curability Lacuna---Appellate Tribunal declined to agree with the findings that the act of tiling of appeal by an authority other than the Commissioner was fatal and incurable and that there was no alternate course except to strike off appeals---Law is always framed for advancement of justice, therefore, it should not be allowed to operate so as to defeat the ends of justice; since it was in the interest of justice to avoid miscarriage of justice, the present act was curable being a technical error---Appellate Tribunal permitted to rectify and cure the omission so as to enable the parties to contest on merit in order to meet the ends of justice.

1997 PTD (Trib.) 879 and 2004 PTD (Trib.) 1812 ref.

I.T.A. No. 1446/KB of 2003 in case of Messrs Javed Arif Fattani Estate Agency and 1996 PTD (Trib.) 334 dissented from.

2003 PTD (Trib.) 711 not relevant.

Chaman Lal Oadh, D.R. for Appellant.

Muhammad Mehtab Khan for Respondent.

ORDER

S. HASAN IMAM (JUDICIAL MEMBER).---By this order we would prefer to decide the question referred to the Full Bench of the Income Tax Appellate Tribunal constituted on the instance of the Department vide order, dated 20-5-2005.

2. The issue involved is regarding alleged contrary findings in respect of the continued applicability of the repealed Income Tax Ordinance, 1979 for signing memo, of appeal-reference/applications etc. for the assessment years up to 2002-2003 and onwards. The facts narrated in the application moved for constitution of the Full Bench, are reproduced hereunder:--

"The Income Tax Appellate Tribunal vide order, dated 19-3-2005 in I.T.A. No. 1562/KB of 2003 was pleased to conclude that the CIT of the Zone-C is the competent authority to file appeals after promulgation of Income Tax Ordinance, 2001" in respect of assessment years upto 2002-2003. It is added in the application that Tribunal while recording the above finding totally ignored the basic fact that the right of appeal is a substantive right for which the repealed Income Tax Ordinance, 1979 would be effectively applied. It is added that another Bench had also maintained the same order. Moreover the Full Bench of the Income Tax Appellate Tribunal vide order reported as 1999 PTD (Trib.) 879 held that the previous orders of the D.B. on the same point are binding on the subsequent D.B. and in case there appears different view from the subsequent D.B. then there is no alternate except to refer the matter for constitution of a larger Bench to avoid controversial order, vide order reported as 2004 PTD (Trib.) 1812 various Departmental Appeals have been dismissed on this ground i.e. "the forms of appeals as well as grounds of appeals to the Tribunal have been signed by Taxation Officer instead of learned CITs."

3. We have heard the learned representatives of the two parties at length and have also gone through the various orders in this context. The orders passed in I.T.A. No.1446/KB of 2003 in case of Messrs Javed Arif Fattani Estate Agency, the learned members of the Income Tax Appellate Tribunal after great deal of discussion maintained the order of the learned CIT(A) dismissing the appeal filed with the signatures of the Taxation Officer instead of CIT Income Tax. In order to arrive at a proper conclusion, it would be more proper to refer the relevant paras of the judgment:

"At the very outset, the learned AR has raised the legal objection on the issue of jurisdiction to file the instant appeal by the Taxation Officer in spite of CIT(A) being the competent authority. He has forcefully asserted that the learned Commissioner has not delegated the powers of Taxation Officer for filing the departmental appeal bearing I.T.A. No.1562/KB of 2003. He has drawn our attention to section 13(2) and section 210 of the Income Tax Ordinance, 2001, which reads as under:

Section 210.

"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."

In support of his version, the learned AR has relied upon a reported judgment cited as 2004 PTD (Trib.) 1812.

On the contrary, the learned DR has opposed to the objection raised by the learned AR and has contended that Departmental appeal is maintainable being filed in accordance with Law.

We have given due consideration to rival arguments. From careful perusal of case record, appreciation of the contents of section 13(2) along with section 210 reproduced above, and examination of memo of appeal, it is evident that the, departmental appeal has not been instituted by the CIT(A), who is competent under the law.

Therefore, we have no hesitation to hold that the appeal filed by the Department bearing I.T.A. No. 1562/KB of 2003 is not maintainable in the eyes of law. Thereby dismissed.

4. Contrary to above judgment, in a case reported as 1996 PTD (Trib.) 334 the learned Members of the Tribunal were not in agreement with each other. Mr. Rasheed Ahmed Sheikh, learned Judicial Member was of the opinion that the Memos of appeal have been signed and verified by the Inspecting Assistant Commissioner whereas the section 134 of the Income Tax Ordinance, 1979 provides that Commissioner of Income Tax if he objects to any order under section 132 direct the ITO to appeal to the Income Tax Appellate Tribunal against such order, thus appeals preferred with the signatures of the Inspecting Assistant Commissioner are not maintainable. Contrary to this, the learned Accountant Member observed that the default is not of substantive nature, it is an error not vitiating the appeal, hence appellant should be given an opportunity to correct the procedural default to avoid the miscarriage of justice.

5. In the circumstances, in order to resolve controversy, the matter was referred to the Third Member who was pleased to observe that the appeal is invalid for the reason that Memorandum of appeal having not been signed and verified by the person authorized by law to file the appeal and that requirement of filing of appeal by the ITO under the direction of the Commissioner is mandatory; hence Memorandum of appeal if signed by unauthorized person/any other officer, is non-compliance of substantive provisions of law, which cannot be cured.

6. The another judgment referred before us, reported as 2003 PTD (Trib.) 711 is not relevant because in this case reference was dismissed, whereby the issue was not referred to the High Court that the Departmental appeal if not filed by an authorized Assessing Officer is a technical error. Before taking into consideration the above reported judgments, we would prefer to refer the relevant provisions under the Income Tax Ordinance, 1979 (Repealed) and Ordinance, 2001:--

Income Tax Ordinance, 2001

131. Appeal to the Appellate Tribunal.---(1) Where the taxpayer or Commissioner objects to an order passed by the Commissioner (Appeals), the taxpayer or Commissioner may appeal to the Appellate Tribunal against such order.

(2) An appeal under subsection (I) shall be---

(a) in the prescribed form;

(b) verified in the prescribed manner;

Income Tax Ordinance, 1979 vide section 134 provides as under:--

134(1) -------------------

(2) The Commissioner may, if he objects to any order passed by an Appellate Additional Commissioner under section 132 direct the. Deputy Commissioner to appeal to the Appellate Tribunal against such order.

7. Income Tax Ordinance, 1979 (repealed) provides that the Deputy Commissioner shall file an appeal before the ITAT, if the Commissioner objects to any order passed by the Appellate Additional Commissioner and direct the Deputy Commissioner to institute the appeal. Contrary to this, section 131 of Income Tax Ordinance, 2001 empowers the Commissioner only, to file the appeal before the Income Tax Appellate Tribunal if he objects to the order gassed by the Commissioner of Income Tax (Appeals). The germ "direction" envisaged in the repealed Ordinance find no place in the Ordinance, 2001, as such, even under the directions for the Commissioner, no appeal could be lodged challenging the order passed by the Commissioner of Appeals, as absolute authority vests with the Commissioner itself to file the appeal. However, it would not be unaccustomed to point out that section 210 of the Income Tax Ordinance, 2001 empowers the Commissioner to delegate powers vested in him in writing to any taxation officer, the Commissioner under the said provision may delegate all of his powers/authority under the Ordinance other than the power of further delegation. Hence exercising authority under section 210 of the Income Tax Ordinance, the Commissioner may delegate the powers of filing of appeal to the Deputy Commissioner, if he so desires, in that case, section 134(2) of the repealed Ordinance, 1979 and section 131 of the Income Tax Ordinance, 2001 will have concurrent effect.

8. Unfortunately, the Commissioner in exercise of powers under section 210 delegated various powers to the Taxation Officers other than the power vested with him under section 131 which means that Commissioner wanted to exercise power of filing of appeal by itself. Reason behind this may be that in normal course, no proper care or caution is observed while filing appeals before the Tribunal and some times cases set aside at the first appellate stage and involving verification of facts for re-assessment are taken to the Tribunal without much justification. The other reason is to eliminate unnecessary litigation, the Commissioner itself carefully wants to examine a case to decide whether it is fit for second appeal in order to avoid multiplication of appeals before the Income Tax Appellate Tribunal and because in certain appeals quite insignificant revenue is involved.

9. Clause (ii) of sub-rule 2 of rule 11 of Income Tax Appellate Tribunal Rules notified on 4th December, 2004 to regulate the procedure of the Income Tax Appellate Tribunal, however, provides that in an appeal on the instance of the Commissioner there shall be appended a certificate to the Memorandum of appeal stating that the appeal has been preferred in exercise of the powers delegated by the Commissioner under section 210, in case the appeal is signed by the taxation officer. Income Tax Appellate Tribunal Rules referred above read with other relevant sections discussed above, support our finding that exercising powers under section 210 of the Ordinance, 2001, the Commissioner may delegate his authority of filing appeals although section 131 of the Ordinance is silent regarding transfer of powers vested with Commissioner in this context sub-rule (2)(ii) of Rule 11 of the Income Tax Rules, 200-1, although provides that it should be stated that the appeal has been preferred in exercise of the powers delegated by the Commissioner under section 210 in ease the appeal is signed by Taxation Officer but rule 3 above further empowers the Tribunal in the following terms:--

"The Tribunal may in its discretion accept a Memorandum of Appeal which is not accompanied by all or any of the documents referred to in this Rule. Since Rule terms to exercise discretionary powers and rules itself are for advancement of justice and should not be allowed to operate to as to defeat the ends of justice and it is for the ends of justice to hear a matter on merit treating the mistake or procedural omission curable instead of making an adverse order inadvertently disposing of an appeal without hearing".

Admission of appeal is therefore, absolute discretion of the bench to be exercised in view of the peculiar facts of each case.

10. In the circumstances, we are in agreement with the finding recorded in 1.T.A. No.1446/KB of 2003 and 1996 PTD 36 (Trib.) page 334 to the extent that the taxation officer in the absence of delegated powers under section 210 has no authority to institute the appeal, where the Ordinance, has prescribed any procedure for the doing of a thing such procedure is to be followed as laid down in a reported judgment cited as 1972 SCMR 73. Since the provisions are exhaustive and clear insofar as prescribed a particular procedure and as there is a specific prohibition of a particular act the Court cannot circumvent the probation in the exercise of its inherent power. Any such act is, therefore, wrongful exercise of powers not vested within Taxation Officer.

11. However, we are not in agreement with the findings of the learned Benches recorded in I.T.A. No.1446/KB of 2003, in case of Messrs Javed Arif Fattani Estate Agency and order reported as 1996 PTD (Trib.) 334 that the act of filing of appeal by an authority other than the Commissioner is fatal and incurable and that there is no alternate except, to strike off appeals. Law is always framed for advancement of justice, therefore, it should not be allowed to operate so as to defeat the ends of justice. Since it is in the interest of justice to avoid miscarriage of justice, as such in our view the present act is curable being a technical error. We in the circumstances supra find sufficient reasons to rectify and cure the present omission so as to enable the parties to contest on merit in order to meet the ends of justice.

12. In the circumstances we further find that the better course would be to admit and entertain pending appeal if signed by the respective Commissioner. D.R. concerned is directed to intimate all Commissioners of Income Tax including (i) D.B. L.T.U. (ii) Commissioner M.T.U. (iii) Regional Commissioner Corporate Region and (iv) Regional Commissioner Southern Region to direct the Commissioners to sign memorandum forms of appeals to the Tribunal, verification and grounds of all the pending appeals before the Tribunal, within 30 days from the date of service of present order.

13. In case the mistake is not rectified as directed within the stipulated period, all such appeals be presented before the Bench on a suitable date for passing an order dismissing appeals, being filed by an incompetent authority vested with no such powers.

14. Appeal accordingly disposed of.

C.M.A./97/Tax(Trib.)Order accordingly.