COMMISSIONER OF INCOME TAX AND WEALTH TAX, GUJRANWALA VS Messrs MUGHAL MECHANISMS (PVT.) LTD., GUJRANWALA, 2006 PTD-LAHORE-HIGH-COURT-LAHORE 1626 (2005)

(a) Income Tax Ordinance (XXXI of 1979)---

----Ss.108 & 139---Income Tax Rules, 1982, Rr.53, 61 & 61-A---Penal provisions of S.108 of the Income Tax Ordinance, 1979 (since repealed) were attracted to the case of non-compliance with Rr. 53, 61 & 61-A of the Income Tax Rules, 1982---Rules 53, 61 & 61-A of the Income Tax Rules, 1982 prescribing the time limit were validly legislated even though the said rules made no reference to the particular sections of the Income Tax Ordinance, 1979 under the statutory authority of which the rules were made---Mere non-mentioning of principal statutory provisions as the source and authority for the subordinate legislation like the said rules was not a reason to invalidate or avoid the rules.

Commissioner of Income Tax/Wealth Tax, Companies Zone, Faisalabad v. Messrs Asim Textile Mills Limited Faisalabad 2003 PTD 2077 fol.

1999 PTD 3456 approved.

Commissioner of Income Tax v. Messrs Flora Food Industries (Pvt.) Ltd., Faisalabad 2005 PTD 1012; PTR No. 386 of 2004; PTR No.15 of 2003; PTR No. 16 of 2003; Commissioner of Income Tax/ Wealth Tax Companies Zone, Faisalabad v. Messrs Kamil Cotton Industries (Pvt.) Ltd., Toba Tek Singh PTR No. 115 of 2001 and 2005 PTD 2283 ref.

(b) Interpretation of statutes---

----Subordinate legislation---Mere non-mentioning of principal statutory provisions as to source and authority for the subordinate legislation was not a reason to invalidate or avoid the subordinate legislation.

1999 PTD 3456 ref.

(c) Income Tax Ordinance (XXXI of 1979)---

----S.136(6)---Income Tax Ordinance (XLIX 2001), S.133(12)---Reference/appeal to the High Court---Decision by High Court on question of law raised in appeal or reference---Copy of High Court judgment under the seal of the High Court and signatures of the Registrar of the High Court shall have to be sent to the Appellate Tribunal "which shall pass such orders as are necessary to dispose of the case conformably to such judgment"---Appellate Tribunal, on receipt of the copy of the judgment from the High Court, was therefore, required to apply itself to the case and pass such orders as were necessary to dispose of the case, complaint in conformity to and in accord with the judgment of the High Court.

Shahid Jamil for Revenue.

Ch. Anwaar-ul-Haq for Respondent.

ORDER

MUHAMMAD SAIR ALI, J.---On 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.20,400 under section 108(b) ibid was imposed. Assessee's appeal thereagainst was accepted by the Commissioner of Income Tax, Appeals Zone, Gujranwala through order dated 15-9-1998. Revenue's appeal and then reference application were refused by the learned Income Tax Appellate Tribunal. Hence the present appeal by the department.

2.following question has been raised to seek opinion of this Court:---

"Whether in the circumstances and on the facts of the case, the learned ITAT was justified to hold that rule 53 is in contravention of the requirement of section 139, specially in the presence of Full Bench decision of ITAT vide No.628/LB/9-99, dated 26-6-1999 1999 PTD 3456 which overrules the above-referred ITAT's order."

3. have heard the learned counsel for the parties.

4.question as herein raised was considered by a Division Bench of this Court (of which one of us: Muhammad Sair Ali, J. was the member) in the case of "Commissioner of Income Tax/Wealth Tax, Companies Zone, Faisalabad v. Messrs Asim Textile Mills Limited, Faisalabad 2003 PTD 2077. Through judgment dated 17-4-2003, the question was answered in the negative. It was held that the penal provisions of section 108 of the Income Tax Ordinance, 1979 (now repealed) were attracted to the case of non-compliance with rules 53, 61 and 61-A of the Income Tax Rules, 1982. And that the rules prescribing the time limit were validly legislated even though the said rules made no reference to the particular sections of the Income Tax Ordinance, 1979 under the statutory authority of which the rules were made. Also that mere non-mentioning of the principal statutory provisions as the source and authority for the subordinate legislation like the said rules was not a reason to invalidate or avoid the rules. For reference, the principle laid down in the above referred case of Commissioner of Income Tax/Wealth Tax, Companies Zone, Faisalabad v. Messrs Asim Textile Mills Limited, Faisalabad 2003 PTD 2077 are reproduced hereunder:---

" ..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. r he fact that the rule did not mention a particular provision under which it required doing of a particular act is not much required 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 the rules will not by itself that those rules which do not make reference to any particular provision of the Ordinance lose their efficacy and legal effect."

"In the light of various reasons stated in the above order we will return a negative answer to the question No.3 as framed."

5. In the above judgment the decision of the learned Full Bench of the Income Tax Appellate Tribunal (reported as 1999 PTD 3456) was also referred to with approval by this Court. The law was thus settled by this Court to put at rest the controversy arising out of the two contradictory judgments of the Tribunal.

6. The judgment in the case of Asim Textile Mills has since been consistently followed. The reasons recorded therein have been adopted by this Court in numerous judgments delivered by this Bench and also other Honourable Division Benches of this Court. Reference is made only to the case of Commissioner of Income Tax v. Messrs Flora Food Industries (Pvt.) Ltd., Faisalabad 2005 PTD 1012, PTR No.386 of 2004, PTR No.15 of 2003, PTR'No.16 of 2003, PTR No.115 of 2001 titled Commissioner of Income Tax/Wealth Tax Companies Zone, Faisalabad v. Messrs Kamil Cotton Industries (Pvt.) Ltd., Toba Tek Singh and 2005 PTD 2283.

7. In view thereof, the question herein raised is accordingly answered in the negative.

8. The learned counsel for the respondent assessee expressed his anxiety that as an effect of the judgment in the case of Asim Textile Mills (Pvt.) Ltd. and other cases therein referred to, the Revenue Authorities will automatically impose the penalty upon the respondent even though the respondent assessee had a right to contest the levy on the grounds other than those decided by this Court.

9. The anxiety of the learned counsel is misplaced. The learned counsel seems to have overlooked the fact that the respondent assessee's appeal against the imposition of penalty succeeded before the First Appellate Authority. The Revenue challenged such decision before the learned Tribunal in the second appeal but failed. The Revenue as such came in further appeal before us raising the sole question of the law as has herein been decided. No other questions were raised before us to become the subject-matter of our consideration.

10. The anxiety of the learned counsel for the assessee even otherwise appears to be unjustified in view of the provisions of the unamended subsection (5) of section 136 and post 2000 amended subsection (6) of section 136 of the late Income Tax Ordinance, 1979 and subsection (12) of section 133 of the Income Tax Ordinance, 2001. These provisions are identical and provide that on decision by this Court of the question of the law raised in the appeal or reference, the copy of this Court's judgment under the seal of the Court and signatures of the Registrar shall be sent to the Appellate Tribunal "which shall pass such orders as are necessary to dispose of the case conformably to such judgment". The Tribunal on receipt of the copy of the judgment from the High Court, is therefore required to apply itself to the case to pass such orders as are necessary to dispose of the case complaint or conforming to and in accord with the judgment of the High Court.

11. The copy of this judgment under the seal of the Court and signatures of the Registrar, is thus to be forwarded to the learned Income Tax Appellate Tribunal, Lahore for passing the necessary orders as visualized under the law.

12. Decided as above.

M.B.A./C-18/LOrder accordingly.