COMMISSIONER INCOME TAX VS Messrs PUNJAB CLOTH HOUSE, 2006 PTD-LAHORE-HIGH-COURT-LAHORE 2402 (2006)

(a) income Tax Appellate Tribunal Rules, 1981---

----R. 11---Appeal not accompanied by all or any of the documents referred to in R. 11 of Income Tax Appellate Tribunal Rules, 1981---Effect---Discretion of Tribunal either to accept or reject such appeal---Such discretion, if exercised by Tribunal, would not be arbitrary or fanciful calling for interference by superior Courts---Principles.

Shahzada Muhammad Umar Beg v. Sultan Mahmood Khan and another PLD 1970 SC 139 rel.

(b) Discretion---

----Discretionary orders passed by subordinate Courts would not be interfered with by superior Courts, unless those were found to be arbitrary and fanciful.

Shahzada Muhammad Umar Beg v. Sultan Mahmood Khan and another PLD 1970 SC 139 rel.

Muhammad Ilyas Khan for Appellant.

ORDER

Commissioner of Income Tax/Wealth Tax, Companies Zone, Faisalabad, has sought reference on the following questions of law laid to have arisen out of order, dated 18-4-1995, passed by the Income Tax Appellate Tribunal, Lahore in I.T.A No.377/LBI of 1989-90 (Assessment year 1988-89):--

(I) "Whether under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal was justified in rejecting the departmental appeal for non-compliance of Income Tax Appellate Tribunals Rule 11 in the presence of the fact that the original order subjected to appeal was available in the assessment record and the assessee/respondent has not challenged the authenticity of the copies annexed with the appeal."

(II) "Whether under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal was justified in rejecting the departmental appeal without providing an opportunity to make up the deficiency, if any, observed/found by the Income Tax Appellate Tribunal."

2. Facts necessary to answer the aforenoted references are that Assessee a private limited company, feeling aggrieved by order in original, dated 23-2-1989, filed the appeal before the Commissioner of Income Tax (Appeals) Faisalabad, who reduced the sales from Rs.1,02,00,000 to Rs.50,00,000, whereas G.P. rate applied at 5% and add backs out of profit and loss Account were confirmed, vide order, dated 5-7-1989. The department filed he second appeal before the learned Tribunal who, after finding that certified copy of the impugned order has not been submitted and no explanation for non-compliance with Rule 11 of Income Tax Appellate Tribunal Rules, 1981 (Rules), has' been rendered, proceeded to dismiss department's appeal, vide order, dated 18-4-1995. The department filed reference application before the learned Tribunal but the same was dismissed on 24-9-1997, hence the present reference, under section 136(2) of the Income Tax Ordinance, 1979.

3. We have heard the learned counsel and examined the available record.

4. Since both the questions of law are interconnected, therefore, we proposed to Answer the same jointly. Rule 11 of Income Tax Appellate Tribunal Rules, 1981 (Rules), inter alia, provides that every memorandum of appeal shall be accompanied by a certified copy of the order appealed against. Sub Rule(3) of the said rule envisages that 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. It appears appropriate to reproduce Rule 11(3) of the Rules, which reads as follows:

Rule 11(3) "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."

It flows from he above that the discretion has been conferred upon the Tribunal, either to accept or reject a memorandum of appeal, which' is not accompanied by all or any of the documents referred to in this rule. In the instant case, the learned Tribunal in its discretion, after finding that certified copy of the order is not annexed with the memorandum of appeal, proceeded to reject the memorandum of appeal. In view of the aforenoted Rule 11(3) of Rules, it lies within the discretion of the Tribunal either to accept or reject a memorandum of appeal, which was filed without the documents, as mentioned in Rule 11(1). We find that the learned Tribunal has exercised its discretion in accordance with the recognized principles regarding exercise of discretion and it has not been exercised arbitrarily or in a fanciful manner. It is settled law that the discretionary orders, passed by subordinate Courts are not to be interfered with by the superior Courts unless those are found arbitrary and fanciful. Reference can be made to Shahzada Muhammad Umar Beg v. Sultan Mahmood Khan and another (PLD 1970 SC 139).

5. In view of the above findings, we are of the view that in case any of the document to be filed with the memorandum of appeal, under Rule 11(1) of the Rules, is not filed by any of the parties, it is within the discretion of the learned Tribunal either to accept or reject the memorandum of appeal without those documents including the certified copies of order appeal against.

References are answered.

S.A.K./C-25/LReference answered.