I.T.A. No. 1556/LB of 2005, decided on 6th October, 2006. VS I.T.A. No. 1556/LB of 2005, decided on 6th October, 2006., 2007 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 1179 (2006)

(a) Income tax---

----Limitation---Condonation of delay---Principles---While deciding the application for condonation of delay, prime consideration should be advancement of justice and the technicalities should not be stretched to the extent whereby the justice is denied.

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

----S. 130(3) & 62---Limitation Act (IX of 1908), S.5---Penal Code (XLV of 1860)---Limitation---Condonation of delay---Condonation of 210 days delay by the First Appellate Authority on the basis of affidavit of assessee that the assessment order was retuned immediately after service of the order to the Taxation Officer for making correction of wrongful computation of income and various other defects therein---Validity---Returning back of the assessment order after issuance and proper service, for the purpose of making alteration, addition and changes in findings as well as computation and calculation of income and tax, without opting the process of rectification, reflected mala fide of the parties---Even if it was presumed that the Taxation Officer directed to return the assessment order, even then tampering with quasi-judicial order was a cognizable offence punishable under Penal Code, 1860 and a crime jointly committed by the officials of the Assessee and Assessing Officer---Conduct of the assessee was not fair, as such benefit of S.5 of the Limitation Act, 1908 could not be extended to the assessee for want of reasonable diligence in prosecution of proceedings---Application for condonation of delay was rejected by the Appellate Tribunal being infructuous.

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

----Ss. 156 & 62---Rectification of mistakes---Return of the original assessment order without any acknowledgment for the purpose of change of verdicts together with required alteration without follow up of process of rectification, was absolutely illegal and against the fundamental rules.

(d) Income tax---

----Limitation---Condonation of delay---Person, having absolute knowledge of limitation, without sufficient cause sleeping over the matter and allowing period of limitation to run out could not, afterward, seek the indulgence of the Court for condonation of delay.

Salman Iqbal Pasha for Appellant.

Muhammad Ali Khan, D.R. for Respondent.

ORDER

S. HASAN IMAM, MEMBER.---By this order, we would prefer to decide the cross-appeals captioned above, preferred at the instance of the Department and assessee, arising from the order of the learned CIT(A), dated 15-9-2005 passed under section 62 of the Income Tax Ordinance, 1979 for the tax year, 2002-2003.

2. The learned CIT(A) while passing the impugned order, condoned the delay of 210 days in filing of appeal and decided the appeal on merit dilating upon all the issues raised in appeal. However, we would initially take into consideration the issue of limitation and incase we find reasons to maintain the order of the learned CIT(A) condoning the delay, then we will dilate upon the issues raised in assessee's appeal bearing I. T. A. No.1647/KB/2005.

3. The assessee a public limited company engaged in the generation, transmission and distribution of electricity, filed appeal before the learned CIT(A) on 27-8-2005 beyond the statutory period of 30 days from the date of service of assessment order along with an application for condonation of delay for filling of appeal duly supported by an affidavit of Chief Accountant of Karachi Electric Supply Corporation Limited, Karachi.

4. Record reveals that there is delay of 210 days in filing of appeal. The Chief Accountant of Messrs Karachi Electric Supply Corporation Limited, Karachi, furnished an affidavit swearing on solemn affirmation that delay is not due to negligence, or lapse on the part of assessee or its employees, but due to the taxation officer, Enforcement and Collection Division, Large Taxpayers Unit namely Mr. Abdul Shakoor Sheikh. It was further added in said affidavit that the Taxation Officer namely Mr. Ghulam Murtaza Khoro, completed assessment for the assessment year, 2002-2003 as on 31st December, 2004 and order was received through Courier service at the reception office of Corporation on 29-1-2005, whereas on 22nd February, 2005 Mr. Attaullah the Chief Accountant, received a telephonic call from the taxation Officer Mr. Abdul Shakoor Sheikh, who, enquired as to whether the assessment order for the assessment year 2002-2003 has been received or not", and requested to return the original assessment order along with notice of demand and I.T-30 for the said assessment year as certain mistakes had been committed in the body of the assessment order which were liable to be corrected and that section 80C had wrongly been invoked, besides referring certain other mistakes in computation of income. It was also stated in said affidavit that Mr. Abdul Shakoor Sheikh also assured that corrected/altered assessment order, LT. 30 and notice of demand, will be delivered afresh or in the alternate, the same may be collected from his office in 3 days' time.

5. It was agitated in the grounds of application for condonation of delay, that in spite of assurance given by the Taxation Officer, neither the original order nor the corrected order, was released or served, but in the meantime a suo motu order passed under section 122(5A) on 7-5-2005 was received through Courier Service on 18-5-2005. In the circumstances, assessee pleaded before the learned CIT(A) that delay in filing of appeal for the assessment year 2002-2003 is neither due to the negligence, lapse or default on the part of Corporation and its Employees, hence in the interest of justice and keeping in view the principles of natural justice, equity and fairplay, the prayer for condonation of delay being not contumacious, be allowed by exercising the powers vested with the Commissioner of Income Tax (Appeals) under subsection (3) of section 130 of the (Repealed) Income Tax Ordinance, 1979 read with subsection (6) of section 127 of Income Tax Ordinance, 2001 and the appeal filed by the Corporation may kindly be admitted for regular hearing.

6. The learned CIT(A) relying upon various orders of the superior Courts, condoned the delay observing hereunder:--

"I have examined the condonation application and also Affidavit of Chief Accountant of K.E.S.C. Limited with reference to sufficient cause as given by the A.R. of the appellant vis-a-vis quoted decision of Hon'ble High Court and Income Tax Appellate Tribunal and found that appellant has sufficient cause for presenting the delayed appeal, hence the appeal of the appellant is taken for regular hearing."

7. We have heard the learned representatives of the two parties. The learned D.R. vehemently argued that delay of 210 days in filing of appeal, is fatal as it is not due to unavoidable reasons and circumstances, but due to gross negligence on the part of the assessee', the contents of the affidavit of the Accountant of the K.E.S.C. are in fact admission of intentionally committed criminal act resulting in change of verdicts and findings of the assessment order, in collusion with the Taxation Officer. He added that the provisions to opt for rectification in case of mistakes in the order attracting section 156 of the Income Tax Ordinance, 1979 or 221 of the Income Tax Ordinance, 2001 have not been invoked instead two parties selected to go by illegal alteration of the order, the affidavit of the Accountant of K.E.S.C. that instead of invoking legal provisions and to opt procedure, the assessee consented to the illegal offer, if any, of the Taxation Officer, to change the assessment order as per wishes of the assessee, which is a crime/cognizable offence.

8. The learned counsel for the assessee namely Mr. Salman Pasha, on the other hand, pleaded that learned CIT(A) was justified to condone the delay as the assessment order received on 29-1-2005 through Courier Service was handed over to Taxation Officer on his request on telephone for the purpose of bringing changes in the order as tax under section 80 was wrongly charged, besides, other mistakes in computation of income which the Assessing Officer wanted to correct. The learned counsel added that delay is liable to be condoned as the same was due to unavoidable reasons and circumstances and was not due to negligence or default of K.E.S.C. and its employees.

9. We have age through the record keeping in view the arguments advanced by the learned representatives of the two parties, affidavit at the instance of assessee showing reasons for condonation of delay and order of the learned CIT(A). We have also gone through various case-laws submitted by the two parties. It is a settled law that while deciding the, application for condonation of delay, prime consideration should be advancement of justice and the technicalities should not be stretched to the extent whereby the justice is denied. However, while sticking to above verdicts, it should be seemed that discretion is not lightly exercised as the time, for filing of appeal which has passed is valuable right, as such other party should not be deprived so lightly. Admittedly the appeal is barred by 210 days, the only ground furnished and agitated through the affidavit is that the assessment order was returned immediately after service of the order to the Taxation Officer for making correction of wrongful computation of income and various other defects therein.

10. In the first instance the return of original assessment order without any acknowledgement for the purpose of change of verdicts together with required alteration without follow up of process of rectification, is absolutely illegal and against the fundamental rules which provide that the party claiming indulgence, has been reasonably diligent in prosecuting his appeal or application. In the situation, the assessee was not only supposed to explain the actual delay beyond the period of limitation, but was under legal obligation to show that his conduct throughout the period between impugned order and filing of appeal, is that of a nature that it would be proper to condone the period of delay that has accrued beyond the period of limitation. Unfortunately assessee's case does not fall within the four corners of this proposition. At one hand the affidavit highlights lack of interest, carelessness and negligence, which does not entitle the assessee to discretionary relief or condonation of delay, on the other hand, the reason shown in the application, is beyond the scope of sufficient cause for extension of time. It is not a bona fide cause, inasmuch as nothing shall be deemed to be done bona fide or in good faith .which is not done with due care and attention, on the contrary returning back of the assessment order after issuance and proper service, for the purpose of making alteration, addition and changes in findings as well as computation and calculation of income and tax, without opting the process of rectification, reflects mala fide of the parties. Even if it is presumed that the Taxation Officer directed to return the assessment order, even then tampering with quasi judicial order is a cognizable offence punishable under Pakistan Penal Code, and a crime jointly committed by the officials of K.E.S.C. and the officer namely Mr. Abdul Shakoor Sheikh.

11. In the circumstances, we are of the considered view that no sufficient cause has been made out within the meaning of section 5 of the Limitation Act. The learned CIT(A) was not justified to condone the delay without taking into consideration bona fides, good faith and sufficient cause when apparently, there is lack of due care as higher officials of K.E.S.C. remained also silent for a period of 210 days which prevented the assessee from tiling the appeal. In the circumstances, there was nothing beyond the control of the assessee, hence there exist no sufficient cause for condoning such delay as each day's delay has to be satisfactorily explained, whereas in the instant case, 210 days delay has not been explained.

We are also of the considered opinion that a person, having absolute knowledge of limitation, without sufficient cause, sleeps over the matter and allows to run out the period of limitation, cannot afterward seek the indulgence of the Court for condonation of delay. In this context, reliance is placed on a case law reported as 1988 Pakistan CR. Law Journal 248 (SC Azad Jammu and Kashmir) and 1981 SCMR 1145.

12. There may not be second opinion that the conduct of the assessee is not fair, as such benefit of section 5 of the Limitation Act, cannot be extended to the assessee for want of reasonable diligence in prosecution of proceedings. For the said reasons the order of the learned CIT(A) condoning the delay, warrants interference and accordingly condonation application, as moved by the assessee, stands rejected. Consequently appeal preferred by the assessee, before the learned CIT(A), also stands dismissed. As a result thereof, appeal bearing I.T.A. No. 1556/KB/2005 preferred by the Department, stands allowed and the appeal, at the instance of the assessee, bearing I.T.A. No.1647/KB/2005 needs no discussion or finding and the same stands dismissed being infructuous, having been refused to condone the delay rejecting the miscellaneous condonation application.

C.M. A./2/Tax (Trib.)Order accordingly.