Rao TALIB ALI KHAN VS INCOME TAX APPELLATE TRIBUNAL, LAHORE
2006 P T D 327
[Lahore High Court]
Before Nasim Sikandar and Jawwad S. Khawaja, JJ
Rao TALIB ALI KHAN
Versus
INCOME TAX APPELLATE TRIBUNAL, LAHORE and 2 others
Income Tax Appeal No. 536 of 1998, decided on 16/05/2005.
(a) Income Tax Ordinance (XXXI of 1979)---
---S.134---Appeal to Appellate Tribunal---Question of fact---Production of fresh evidence before Tribunal, prayer for---Scope---Question of fact could not be converted into a question of law on the idea that Tribunal itself ought to have probed into the matter to find out the truth---In absence of an application (oral or in writing) and without first recording reasons, Tribunal could not grant such prayer---Principles illustrated.
Director Food, N.-W-F.P. and another v. Messrs Madina Flour and General Mills (Pvt.) Ltd. and 18 others PLD 2001 SC 1 ref.
(b) Income Tax Ordinance (XXXI of 1979)---
----S.136---Question of fact cannot be a subject-matter of appeal before High Court.
Ch. Jan Muhammad for Appellant.
Nemo for Respondents.
Date of hearing: 16th May, 2005.
JUDGMENT
NASIM SIKANDAR, J.---In this further appeal under section 136 of the late Income Tax Ordinance, 1979 it is claimed that following questions of law arise out of the impugned order of the Income Tax Appellate Tribunal dated 6-7-1998:---
"(i) Whether on the facts and in the circumstances of the case, learned Income Tax Appellate Tribunal was justified in refusing to allow time to collect and submit documents from the Liquidation Board?
(ii) Whether on the facts and in the circumstances of the case, learned Income Tax Appellate Tribunal was justified in confirming the addition of Rs.9,00,000 by relying upon the statement of the donor in the presence of documentary evidence i.e. agreement?
(iii) Whether on the facts and in the circumstances of the case, learned Income Tax Appellate Tribunal was justified to accept the statement of donor against affidavit of ex-Manager of the Corporation from where the amount of Rs.9,00,000 was transferred?
(iv) Whether on the facts and in the circumstances of the case, Income Tax Appellate Tribunal was justified to rely on the statement of donor although appellant was never afforded opportunity to cross-examine him?"
2. According to the statement of the case the appellant, an individual, deriving income from running a Cinema House as well working as Contractor during the period 1989-90 returned an income assessment order was set aside by the First Appellate Authority, C.I.T. (Appeals). After remand the Assessing Officer again framed an assessment at a total income for the year 1989-90 at Rs.12,06,000. In the process he disallowed the claimed cash gift of Rs.9,00,000. In that regard it was, inter alia, observed that to verify the claim the donor Muhammad Ali son of Mian Rehmat Ali of Chak No.31/2/L, Okara was issued notice under section 148 of the late Income Tax Ordinance. On representation the alleged donor denied to have ever made the claimed gift of a cash sum of Rs.9,00,000 to the assessee-appellant. The Appellate Additional Commissioner, Sahiwal on 29-1-1995 maintained the addition on the ground that the assessee had not been able to establish the factum of gift. On further appeal a Division Bench of the Tribunal by way of the impugned order dated 6-7-1998 maintained the findings of the Assessing Officer as well the Appellate Additional Commissioner paras. 10 and 11 of the impugned order read as under:---
"(10) It was under these circumstances when the learned A.R. was insisting that the gift was paid through cross cheque that he was asked to substantiate his claim. He failed to produce any bank statement or any other document in support of his contentions and insisted on further time to allow him to get the copy of the documents from the liquidation board. The time was not allowed for the obvious reasons that the original documents were to be with the assessee since long i.e. when for the first time proceedings were taken up under section 62 of the Income Tax Ordinance. As the relevant documents have never been produced before any officer and instead an affidavit had been filed from a relative affirming the transaction on the basis of his memory only.
(11) We have considered the arguments of the two sides and are convinced that these finance corporations were doing shaddy business and the individuals were defrauded to a large extent. In such shaddy conditions, the only reliable basis is the statement of the alleged gift and his sources to gift the said amount. As Mr. Muhammad Ali clearly denied having gifted anything to the assessee, he has to be believed. The addition was thus fully justified and is thus confirmed."
3. Learned counsel for the appellant by relying upon in re-Director Food, N.-W-F.P. and another v. Messrs Madina Flour and General Mills (Pvt.) Ltd. and 18 others PLD 2001 SC I attempts to argue that the Tribunal had the discretion to investigate the matter or at least to remit the same to the Assessing Officer for re-considering the issue of gift and failure on its part to use that discretion has resulted in miscarriage of justice. We are however not inclined to agree. In the first place there has never been a request before the Tribunal for affording another opportunity to produce other documentary evidence to support the factum of gift. Even otherwise if it was so the Tribunal could not oblige the assessee-appellant without first recording the reasons to allow introduction of fresh evidence and that too to be searched out by the A Tribunal itself. Secondly, the issue if the gift was genuine or otherwise is predominantly a question of fact and it cannot be converted into a question of law on the far-fetched idea that the Tribunal itself ought to have probed into the matter to find out the truth. There is no question of failure of exercise of discretion by the Tribunal when it was never called upon by way of an application or even orally at the time of arguments before the Tribunal.
4. Accordingly, the claim that the Tribunal failed to exercise discretion is not made out from the impugned order. Also as noted above, the question of genuineness or otherwise of a gift is predominantly a question of fact, which cannot be a subject-matter of an appeal before this Court under the provisions of late Ordinance.
5. Dismissed.
S.A.K./T-113/LAppeal dismissed.