COMMISSIONER OF INCOME TAX, COMPANIES ZONE-IV, KARACHI VS HAKIM ALI ZARDARI, 2006 PTD-SUPREME-COURT 271 (2005)

(On appeal from the judgment of Sindh High Court, Karachi dated 28-8-2003 passed in Wealth Tax Case No.178 of 2003).

(a) Wealth Tax Act (XV of 1963)---

----S. 17---Constitution of Pakistan (1973), Art.185(3)---Income Tax Appellate Tribunal Rules, 1982, Rr.10 & 14---Limitation---Date of notice under S.17, Wealth Tax Act, 1963 was not mentioned in the assessment order nor was the notice produced before the Appellate Tribunal, therefore, it could be safely assumed by the Tribunal that the notice was hit by limitation---Both under Cls.(a) and (b) of subsection (1) of S.17, Wealth Tax Act, 1963, said limitation was not applicable to the assessment but limitation prescribed in S.17 of the Act was applicable to the service of notice only---Tribunal was justified to accept the assessee's appeal on the issue of limitation by cancelling the assessment and modifying the order of the Commissioner so as to vacate the same to the extent of the relevant assessment year---Violation of Rr.10 & 14 of Income Tax Appellate Tribunal Rules, 1982 would in no way render the action and the finding of the Tribunal as illegal or contrary to law---No illegality, infirmity or irregularity in the order of the Appellate Tribunal, which was affirmed by the High Court, having been found, Supreme Court dismissed petition for leave to appeal against said orders.

(b) Limitation---

----Question of limitation being a matter of statute and the provisions thereof being mandatory, same could not be waived and even if waived could be taken up again by the party waiving it and even by the Court itself---Matter of limitation would not be left to pleadings of parties but a duty was imposed on the Court itself to decide whether the proceedings had been filed within the period of limitation---Higher forum would be competent to examine the question of limitation in filing the proceedings before the original/lower forum, if such issue was raised and agitated before it---Principles.

Muhammad Ishaq and another v. Shah Muhammad and others 1985 SCMR 799; Hakeem Muhammad Boota and another v. Habib Ahmad and others PLD 1985 SC 153 and Haji Ghulam Rasul and others v. Government of the Punjab and others 2003 SCMR 1815 ref.

A.R. Akhtar, Advocate-on-Record for Petitioner.

Nemo for Respondent.

Date of hearing: 8th November, 2005.

ORDER

SAIYED SAEED ASHHAD, J.--- This petition for leave to appeal has been filed against the judgment of the Sindh High Court dated 28-8-2003 dismissing Wealth Tax Case No.178 of 2003 on the ground that no question of law was raised before it for its opinion.

2. For disposal of this petition it will be appropriate to reproduce the relevant portion from the order, dated 14-10-2000 passed by the Income Tax Appellate Tribunal in Wealth Tax Appeals Nos.571/KB of 1999-2000 and 576/KB of 1999-2000 which is as under:

"(6) We have considered the submissions of both the parties. The question of limitation is a question of law and goes to the root of the matter. In a number of cases, it has been held by the superior Courts that a question of law can be raised at any stage. A perusal of the assessment order shows that the notice under section 17 of the 1963 Act was issued with the prior approval of the I.A.C. dated 11-3-1997. Although the date of issue of notice is not mentioned in the order nor was the notice produced before us, it can be safely assumed that the notice was issued on 30-6-1991. Hence the notice issued was hit by limitation both under clauses (a) and (b) of subsection (1) of section 17 of the 1963 Act as reproduced in para.3 above. We, however, do not agree with the contention of the learned counsel of the assessee that the said limitation is applicable to assessment. We hold that the limitation prescribed in section 17 of the 1963 Act is applicable to the service of notice only. Thus, we are inclined to accept the assessee's appeal on the issue of limitation and we cancel the assessment for the assessment year 1990-91 and we modify the order of the learned Commissioner of Income-tax (Appeals) so as to vacate the same to the extent of the assessment year 1990-91.

(7) Since we have accepted the assessee's appeal on the question of limitation, we see no need to adjudicate the other grounds taken in appeal. As a result, the assessee's appeal is accepted to the extent that the assessment for the assessment year 1990-91 is cancelled in view of the question of limitation whereas the departmental appeal is dismissed having become infructuous.^"

3. The order of the Income Tax Appellate Tribunal was impugned before the High Court by the Department who dismissed the same as follows:

"Learned counsel has not been able to show us any infirmity or any illegality in the impugned order of Income Tax Appellate Tribunal. Therefore, in the facts and circumstances of the case no question of law arises.

The application is accordingly dismissed."

4. From perusal of the material on record and the order of the Income Tax Appellate Tribunal we are also unable to find any illegality, infirmity or irregularity in the order of the Income Tax Appellate Tribunal. As the order of the Income Tax Appellate Tribunal did not suffer from any legal flaw and factual infirmity, the High Court was justified in dismissing the appeal and no exception can be taken to such order of dismissal.

5. It was vehemently argued by Mr. A.R. Akhtar, Advocate-on-Record of the petitioner that a grave and serious illegality was committed by the Tribunal in entertaining the question of limitation which was not raised before the lower forums and for the first time was raised before the Tribunal. He submitted that the Tribunal in allowing the question of limitation to be raised before it during the course of arguments violated Rules 10 and 14 of Income Tax Appellate Tribunal Rules, 1982.

6. The contention raised and arguments advanced by Mr. A.R. Akhtar do not carry weight in view of the pronouncements made by this Court in large number of cases to the effect that the question of limitation being a matter of statute and the provisions thereof being mandatory, same could not be waived and even if waived could be taken by the party waiving it and even by the Court itself. It has further been observed that matter of limitation would not be left to pleadings of parties but a duty is imposed on Court itself to decide whether the proceedings have been filed within the period of limitation. This Court in the case of Muhammad Ishaq and another v. Shah Muhammad and others 1985 SCMR 799 held that the question of limitation relatable to filing of proceedings beyond the time before the lower forum could be raised before the High Court and the High Court would be under legal duty to examine the question of limitation regarding institution of the proceedings before the lower Court. This Court, however, had laid down a condition for consideration of the question of limitation by the High Court in such cases and the same was that it should have been raised before it and in case it was not raised before the High Court then the High Court would not be bound to examine the question of limitation regarding institution of the proceedings before the lower forum. An observation almost to the same effect was made by this Court in case of Hakeem Muhammad Boota and another v. Habib Ahmad and others PLD 1985 SC 153. In this case it was held that limitation being a matter of statute, same could not be waived and even if waived could be taken by the party waiving party or by the Court itself. This Court went on to observe that it was the duty of the Court to notice the point of limitation whether such plea was raised or not. The pronouncement to the above effect was reiterated by this Court in the case of Haji Ghulam Rasul and others v. Government or the Yuman and others LUU. SCMR 1815. It will be appropriate to reproduce the relevant portion from the cited judgment dealing with the issue of limitation which is as under:

"(12) This Court has decided the question of limitation in Muhammad ^'Ishaq v. Shah Muhammad 1985 SCMR 799 wherein it was observed that "it would be necessary for appellate or revisional forum, where Limitation Act, is applicable to examine under section 3 of the Limitation Act whether the proceedings instituted before itself are within limitation. But it would not be under any legal obligation like the one visualised by section 3 of the Limitation Act to do so if the plea of limitation raised before it related to the institution of the original case/suit in the trial forum and/or the institution of any other matter before a lower forum. Thus if a question of limitation is raised before the High Court in connection with the institution of an appeal before itself beyond the period of limitation it will be the duty of the High Court to examine the same notwithstanding the fact that the other party did not raise or having raised, did not press the bar of limitation. But if the argument is that the High Court did not examine the question of limitation relatable to the filing of a suit/case before a lower forum then the High Court would not be obliged to examine the same unless it is raised before it because section 3 of Limitation Act does not place any such responsibility on the High Court regarding the proceedings of the lower forum, when exercising its power of review in appellate or other jurisdiction. The same would apply to the discretionary writ jurisdiction". In the same judgment, it was observed that "it is no doubt the duty of the forum/Court wherein a matter is instituted to examine the question of limitation, but same cannot be said about the higher forum as that would also depend upon the attitude of the party which wanted the question of limitation vis-a-vis the lower forum, to be agitated at the higher forum. If it fails to agitate it before the higher forum, it would not then be essential on its own part, for the next higher forum to examine the question suo motu".

7. From the pronouncements made by this Court in the aforecited cases the undeniable conclusion/inference which can be had/is that a higher forum would be competent to examine the question of limitation in filing the proceedings before the original lower forum, if such issue was raised and agitated before it. In the present case question of limitation was raised and agitated before the Tribunal and the Tribunal had discussed the same at length. In view of the pronouncement of this Court the Tribunal was justified in doing so and violation of Rules 10 and 14 of Income Tax Appellate Tribunal Rules, 1982 would in no way render the action and the finding of the Tribunal as illegal or contrary to law.

8. For the aforesaid facts, discussion and reason, this petition for leave to appeal is without any substance and is dismissed refusing the grant of leave.

M.B.A./C-53/S??????????????????????????????????????????????????????????????????????? Petition dismissed.