Messrs JILLAN PACKAGING AND PAPER INDUSTRIES (PVT.) LTD. VS INCOME TAX APPELLATE TRIBUNAL OF PAKISTAN, LAHORE BENCH, LAHORE, 2006 PTD-LAHORE-HIGH-COURT-LAHORE 1479 (2005)

Income Tax Ordinance (XXXI of 1979)---

----Ss. 50(4), 108 & 143-B---Deduction of tax at source---Non-filing of. requisite statement---Imposition of penalty on assessee for such default---Appellate Authority in appeal set aside order of penalty and directed Assessing Officer for de novo action---Assessee's appeal against remand order was dismissed by Appellate Tribunal' with observation that penalty had rightly been levied---Validity---Such observation of Tribunal had made remand order futile---High Court in appeal struck out such observation of Tribunal, thus , impugned order would be read to mean that order of Appellate Authority was upheld by Tribunal.

Shahbaz Butt for Appellant.

Muhammad Ilyas Khan for Respondents.

Date of hearing: 30th November,. 2005.

ORDER

The appellant i.e. Messrs Jillan Packaging and Paper Industries (Pvt.) Ltd. on deduction of the tax at source under section 50(4) of the late Income Tax Ordinance, 1979 defaulted in filing the requisite 'statement under section 143-B of the said Ordinance. Notice under section 116 thereof was served on 20-1-1994, followed by reminder, dated 21-1-1995. Reply submitted by the appellant. was rejected and through an order under section 108 of the said Ordinance penalty was imposed on the appellant by the Assistant Commissioner of Income Tax Circle-6, Companies Zone-II, Lahore. On appeal, the Commissioner of Income Tax (Appeals) set aside the penalty order and. directed the Assessing Officer to initiate de novo action after service of a proper notice upon the appellant and on providing it a reasonable opportunity of being heard. Dissatisfied the appellant filed appeal before the Income .Tax Tribunal which through the impugned order, dated 27-9-1999 dismissed the appeal through recording the following observations:--

"The penalty has been rightly levied. However, the penalty orders having been set aside by the learned CIT(Appeals), no further interference is called for."

Hence, the present reference application.

2. The learned counsel for the parties stated that I.T.A. No.593 of 1999 being between the same parties and against the same impugned order was disposed of by this Court through judgment, dated 7-4-2005 and sought decision of the present appeal in terms of the said judgment, dated 7-4-2005.

3. While deciding I.T.A. 593 of 1999 between the same parties through judgment, dated 7-4-2005 a Division Bench of this Court which one of us (Muhammad Sair Ali, J.) was a member held:--

Mr. Muhammad llyas Khan, Advocate was confronted with the intriguing situation arising in the present case. CIT (Appeals) on setting aside the penalty directed de novo action to the Assessing Officer upon service of notice to' the appellant and on providing a reasonable opportunity to the appellant. On appellant's appeal, the learned Tribunal however upheld the order of C.I.T. (Appeals) yet proceeded in the same para. to hold that "penalty has been rightly levied". When questioned as to the propriety of the above-said observations of the Tribunal made in order, dated 27-9-1999, Mr. Muhammad Ilyas Khan, Advocate stated that the order of the CIT (Appeals) had been upheld and the consequences will flow therefrom. He was however unable to answer that the two observations made by the Tribunal in the last para. were contradictory. The Commissioner set aside the penalty order. The Tribunal upheld the said order of the Commissioner but also recorded that the penalty had been "rightly levied". This practically closed the case of the appellant before the Assessing Officer to whom the case had been remanded by the CIT(Appeals). The appellant would obviously had no case to present against the penalty if the same was meant to be upheld by the Tribunal. The Tribunal contrarily upheld the order of Commissioner by dismissing assessee's appeal thereagainst. The following observations passed by the Tribunal would make the remand futile, wherefor the same are struck out of the Tribunal's order:--

"The penalty has been rightly levied."

The above observations shall be treated to have been deleted from the last para of order, dated 27-9-1999. The order shall be read to mean that the order of CIT (Appeals) was upheld by the Tribunal and was thus maintained. The Assessing Officer shall proceed in accordance with the terms of the order, dated 21-11-1998 of CJT (Appeals) Zone II, Lahore.

4. In absence. of any distinguishing features the present appeal is also disposed of in terms of the above observations recorded in I.T.A. C 593 of 1999.

S.A.K./J-6/LOrder accordingly.