I.T.As. Nos. 3934/LB, 717/LB, 4208/LB of 2002 and 1167/LB of 2004, decided on 29th March, 2006. VS I.T.As. Nos. 3934/LB, 717/LB, 4208/LB of 2002 and 1167/LB of 2004, decided on 29th March, 2006.
2007 P T D (Trib.) 181
[Income-tax Appellate Tribunal Pakistan]
Before Rasheed Ahmed Sheikh, Jawaid Masood Tahir Bhatti, Judicial Members and Mukhtar Ahmad Gondal Accountant Member
I.T.As. Nos. 3934/LB, 717/LB, 4208/LB of 2002 and 1167/LB of 2004, decided on 29/03/2006.
(a) Precedent---
----Ratio decidendi---Meaning of---Ratio decidendi of a case makes the decision a binding precedent for the future---Ground of a decision is the material fact of the case, so that if a similar or comparable set of facts come before the Court again, and the new case is on "all fours" with an earlier case, the Court will follow and apply the decision given in the earlier case.
(b) Precedent---
----Decision---Reasons---Where a Court proceeds to give more than one reason for a decision, per se both the reasons would be binding but the Court is entitled to consider the correctness of the reasons.
AIR 1961 Raj. 250 rel.
(c) Income-tax---
----Mistake in the order---Law does not permit that if, owing to inadvertence, any mistake has been committed in the order that should go on travelling for all times to come.
(d) Income Tax Ordinance (XXXI of 1979)---
----Ss. 156, 135(9) & 136---Rectification of mistake---Finality of the order---If a mistake of law and fact had been crept in the order that order certainly requires rectification and modification under S.156 of the Income Tax Ordinance, 1979---Finality is attached to the extent that the order passed by the Appellate Tribunal on appeal shall be final being not assailed further by way of applying to the High Court or by invoking the constitutional jurisdiction---No other meanings could be attached to S.135(9) of the Income Tax Ordinance, 1979 if read in consonance with the provisions of S.136 of the Income Tax Ordinance, 1979.
(e) Income Tax Ordinance (XXXI of 1979)---
----S. 156---Rectification of mistake---Legislature in terms of S.156 of the Income Tax Ordinance, 1979 had empowered the Income Tax Authority or the Tribunal to amend and rectify any order passed by it either on its own motion or on such mistake being brought to its notice by any income tax authority or by the assessee.
(f) Income Tax Ordinance (XXXI of 1979)---
----S.156---Rectification of mistake---Irrelevant judgment---Mistake apparent from the record---Furnishing of an irrelevant judgment and relying upon which the decision had been made affecting the rights of either party was certainly a mistake apparent from the record.
(g) Income Tax Ordinance (XXXI of 1979)---
----S.156---Rectification of mistake---Review of judgment---Appellate Tribunal had no power so as to review its own judgment but the provisions of S.156 of the Income Tax Ordinance, 1979 vividly empowers the income tax authority or the Tribunal to amend or rectify its order where a mistake of law and fact had taken place.
(h) Income Tax Ordinance (XXXI of 1979)---
----S. 156---Rectification of mistake---Irrelevant judgment---Mistake apparent from the record---Interpreting a provision of law on the strength of an irrelevant judgment, without any ambiguity, was a mistake apparent from the record.
(i) Income Tax Ordinance (XXXI of 1979)---
---S. 156---Rectification of mistake---Word "amend" and "rectify"---Meanings---Word "amend" means to improve, to change or to modify for the better by removing defects or defaults, to correct, to revise, to alter while the word "rectify" means to correct or define something which is erroneous or doubtful.
(j) Income Tax Ordinance (XXXI of 1979)---
---S. 156---Rectificatory provisions---Use of---Rectificatory provisions are always used as a tool to improve, change, modify, alter, revise the order for the better by removing defects, faults, mistakes etc.
(k) Judgment---
---Irrelevant judgment is that judgment which is not relating or applicable to matter in issue or not supporting the issue of fact to be proved.
(l) Income Tax Ordinance (XXXI of 1979)---
---Ss. 135(5)(8) & 156---Disposal of appeals by the Appellate Tribunal---Constitution of Full Bench for rectification of an order---Validity---Chairperson of the Appellate Tribunal, in exercise of his statutory powers, was competent to constitute Full Bench for adjudication of appeals, references and applications including rectification of the orders.
(m) Income Tax Ordinance (XXXI of 1979)---
--S. 64(1)---Limitation for assessment---Word "made"---Interpretation of---Significant word used in subsection (1) of S.64, Income Tax Ordinance, 1979 with particular reference to assessment is "made" is second form of the verb, first one is make and in general terms this word means to manufacture, to create out of nothing, to produce---Word specifies to cause to exist to execute, bring into existence things and to prepare and sign to issue limitation provided in S.64(1) of the Income Tax Ordinance, 1979 in this perspective was relevant to "making of assessment" and no other interpretation could be attached to such words.
(n) Income Tax Ordinance (XXXI of 1979)---
----S. 64---Making of assessment---Communication of the order---Phrases "making of assessment" and "communication of the order" are to distinct and independent steps to be taken---In fact "communication of the order" is only a part of process of reaching final conclusion to the party after "making the assessment".
(o) Income Tax Ordinance (XXXI of 1979)---
---Ss. 64 (1) & 154---Limitation for assessment---Service of order---As per scheme of the Income Tax Ordinance, 1979, the assessment order made under S.64 of the Income Tax Ordinance, 1979 shall be served upon the party in the manner laid down under 5.154 of the Income Tax Ordinance, 1979---Cut date provided in S.64 of the Income Tax Ordinance, 1979 in an unambiguous language was relevant to "making of assessment" but did not include communication of the order within that period---Neither provisions nor any word in a statute could be treated to be redundant---In no way "communication of the order" could be shoved in the limitation of time provided for completion of assessment---Phrase "communication of the order" was alien to the limitation of time provided for "making of assessment" under S.64 of the Income Tax Ordinance, 1979.
(p) Interpretation of statutes---
---Fiscal statute should be interpreted according to their natural meanings---Neither there is room or any intendment nor any presumption can be attached to any provision of the statute as to what extent hardship may appear to the judicial mind to be.
(q) Income Tax Ordinance (XXXI of 1979)---
----S. 156---Rectification of mistake---If the case is not brought within the words of the statute interpreted according to their natural meaning; and if there is a case which is not covered by the statute so interpreted, that can be cured by invoking the provisions of S.156 of the Income Tax Ordinance, 1979 being mistake of law having crept in the order.
(r) Interpretation of statutes---
---Courts should follow that construction of law which does not lead to startling results or destructive ends---Fiscal statutes should be interpreted strictly in accordance with the letter of law used and the words employed and the Court can not imply anything not expressed in statute.
(s) Income Tax Ordinance (XXXI of 1979)---
----S. 64(1)---Limitation for assessment---Communication of order to the parties---Limitation prescribed under S.64 of the Income Tax Ordinance, 1979 was relevant to making of assessment order and not its communication to the parties within that limit of time.
2005 PTD (Trib.) 1716 reversed.
PTCL 1988 CL 372 distinguished.
I.T.A. No.6288/LB of 1999, dated 29-9-2000; AIR 1996 SC 1313; (1974) 93 ITR 215 (1996) PTR 1136; PLD 2001 SC 1; PLD 2002 SC 630; 2002 PTD 679; PLD (1990) SC 1092; 1997 SCMR 1804; Black's Law Dictionary (Sixth Edition); Law Lexicon (Edition 1996) Page 62; Webster New World Dictionary (Third Edition) Page 43; CIT v. National Food Laboratories (1992) PTD 570 (SC Pak.); CIT Hussain Bhai M. Badri (1994) 208 ITR 719; National Food v. CIT (1991) 64 Tax 60; Sheikh Muhammad Iftikhar-ul-Haq v. ITO Bahawalpur PLD (1996) SC 542; 1997 PTD (Trib.) 879; 2004 PTD (Trib.) 297; AIR 1961 Raj. 250 and PLD 1995 SC 423 not relevant.
Iqbal Hashmi, Naseem Akbar, F.C.A. and Shahbaz Butt (amicus curie) for Appellant (in I.T.As. Nos.3934/LB and 717/LB of 2002).
Dr. Shahid Siddique Bhatti, D.R. for Respondent (in I.T.As. Nos.3934/LB and 717/LB of 2002).
Dr. Shahid Siddique Bhatti, D.R. for Appellant (in I.T.As. Nos.4208/LB of 2002 and 1167/LB of 2004).
Iqbal Hashmi, Naseem Akbar, FCA for Respondents (in I.T.As. Nos.4208/LB of 2002 and 1167/LB of 2004).
Shahbaz Butt (amicus curie).
ORDER
This Full Bench has been constituted by the order of the Honourable Chairperson of the Tribunal by exercising powers under section 133(5) of the Repealed Income Tax Ordinance, 1979 read with section 221(6) of the Income Tax Ordinance, 2001. This occasion arose owing to cropping up mistakes of law and fact in the Tribunal's consolidated order rendered in the present case on 7-4-2005.
2. What happened in the present case was that a combined order, on cross-appeals, was passed by the Tribunal in respect of assessment years 1998-99 and 2000-2001. The Tribunal declared the assessment made under section 62 for the assessment year 1998-99 to be null and void on the following addition ground taken during the course of hearing.
That the order under section 62 of the Ordinance is illegal and void as it is served after the limitation period prescribed under section 64 of the Income Tax Ordinance, 1979."
However, other grounds were not adjudicated upon by the Bench.
3. The facts giving rise to the appeal for the assessment year 1998-99 were that the order made by the Assessing Officer under section 62 of the Repealed Income Tax Ordinance, 1979 on 30-6-2001 was got served upon the assessee on 3-8-2001. It was pleaded before the Tribunal that the assessment made under section 62 on 30-6-2001 was hit by limitation as was prescribed under section 64 of the Repealed Ordinance. To elaborate this plea it was stated that after making the assessment order, its service had to be made on the assessee within the limit of time provided under section 64 of the Repealed Ordinance. Under this section the assessment could not be made after the expiration of two years from the end of the assessment year in which the total income was first assessable. It was thus stated, that the last date for "making of order" under section 62 for assessment year 1998-99 fell on 30-6-2001. According to the learned counsel "making of order" under statutory provisions also means the order must be communicated to the party affected by 30th June, 2001. This date was worked out in accordance with the period of time specified under section 64 of the Repealed Ordinance in order to make the assessment within that period. Since, the order had to be served on or before 30-6-2001 but was admittedly got served on the assessee on 3-8-2001, therefore, the order passed in the instant case under section 62 of the Ordinance was declared invalid and ineffective. Strength in this regard was acquired from a reported judgment of the Tribunal in re: 2005 PTD (Trib.) 1716. Hence, the assessment order for the assessment year 1998-99 was vacated on this very, basis and the declared version for the subsequent assessment year 2000-2001 was also ordered to be accepted but for different reasons. Accordingly, the assessee's appeals were allowed and those of the department were dismissed.
4. So far as the reported case in re: 2005 PTD (Trib.) 1716 is concerned, relying upon which the assessment made in the instant case was declared to be null and void, a reference was also made therein to another unreported judgment rendered by the Tribunal bearing ITA No.6288/LB/1999, dated 29-9-2000. Relevant para of the said unreported judgment was also quoted in the reported judgment. On going through the reported judgment, it was noted therein that the decision was resting on two counts. Firstly, owing to non availability of signatures of the Assessing Officer on the assessment order and secondly the assessment order was not communicated to the affected party on or before the limit of time prescribed for completion of assessment. Accordingly, the impugned assessment order was held to be null and void. We would also like to bring on record that the judgment in the unreported case was delivered by the Tribunal after referring two other reported cases of the Indian jurisdiction bearing citation (1994) 93 ITR 215 and AIR 1996 SC 1313.
5. Subsequently, on examination of the appeal record of the instant case by the Tribunal on its own motion it was noted that no citation whatsoever quoted as (1994) 93 ITR 215 was available in that volume. However, it was traced that correct citation was (1974) 93 ITR 215. Further noted that this case of Indian jurisdiction, referred to herein-above, was mistakenly relied upon being erroneous and mischievous. In that case an administrative order passed by the Commissioner under section 132(1) of the Income Tax Act, 1961 came under consideration before the Calcutta High Court. The facts were that approval for seizer of books of accounts and documents was granted by the Administrative Commissioner. In this background it was observed by the High Court that the said order should have been communicated by the Revenue so that the taxpayer could exercise his right under section 132(10) to apply to the Board for return of the books after the expiry of prescribed period of one hundred and eighty days. Anyhow, before rectifying/recalling the order passed by the Tribunal in the present case, the assessee was given a reasonable opportunity of being heard for the reasons recorded in the latter, copy of which was also supplied to the learned counsel Mr. Iqbal Hashmi on 10-9-2005 in order to administer justice.
6. It would be worthwhile to mention here that during the pendency of rectification proceeding, a reference application was filed by the Revenue raising three questions stated to have arisen out of the Tribunal order, dated 7-4-2005. However, the Tribunal vide its order, dated 26-11-2005 declined to refer those questions to the Hon'ble High Court for its authoritative pronouncement because the reference application was filed much beyond the period of time prescribed under section 136 of the Late Income Tax Ordinance, 1979. Reference in this regard was also made to a reported judgment of the Lahore High Court in re: (1996) PTR 1136.
7. Besides hearing Mr. Muhammad Iqbal Hashmi the learned counsel for the assessee at a great length. Mr. Shahbaz Butt Advocate was also invited as amicus curiae (a friend of the Court). It was strenuously pleaded by them that the provisions of section 156 of the Repealed Ordinance are not attracted to the facts of the present case. It was explained that two connotations have been used in section 156 of the Repealed Ordinance. One is "may amend any order passed by it" and the other is "to rectify the mistake apparent from the record". According to them the word "may" denotes to the discretion of the Tribunal which has to be exercised judiciously, properly, reasonably, not arbitrarily and in accordance with law and in view of the law laid down by the superior Courts in PLD (2001) SC 1, PLD 2002 SC 630, 2002 PTD 679, PLD 1990 SC 1092 and 1997 SCMR 1804. Next comes the word "amend" which is of immense importance for the reason that it determines scope of rectification. This word has been used with "any order", thus it clearly follows that amendment presupposes existence of any order. Since the word "amend" has not been defined in the statute, one has to interpret the same in normal parlance of understanding by taking its grammatical and dictionary meaning. Reference in this regard has been made to Black's Law Dictionary (Sixth Edition) wherein at page 80 the word "amend" means to improve, to change for the better by removing defects or faults, to change, to correct. As per Law Lexicon (Edition 1996) page 62, this word signifies "to make better, to change for the better". According to Webster New World Dictionary (Third Edition) page 43 it means "correct, to make better, improvement, to remove faults".
8. Further stated that the next connotation which has been used by the legislature is "any order passed by it". This refers to two important issues viz; (i) any order and (ii) passed by it, which means that the scope is extended to "any type of order" passed under the provisions of law i.e. Income Tax Ordinance" (iii) while the words "by it" refers to the authority passing such order; meaning thereby that any such order must-have been passed by the said authority intending rectification, and therefore, it follows clearly that non else other than the authority passing the order can rectify the order.
9. Thus, from the cumulative reading of the phrase "may amend any order passed by it" it is apparent in the light of above discussed that:
(i) the authority has discretion (to be exercised judiciously and in accordance with law) and power to correct, improve, change for the better by removing defects and faults in an order compulsorily passed by it earlier.
(ii) The amendment must be qualified and restricted to removing of defects and faults for betterment but does not empower to re-construct or re-build or for that matter bring a different opinion in an existing order. The rectificatory provisions cannot be used as a tool to insert changed opinion.
(iii) The existing order must remain in field but for the improvement and betterment through the tool of correction or amendment.
10. Also stated that the next connotation used is "to rectify any mistake apparent from record". In accordance with the dictionary meaning the word "rectify" denotes "to correct or define something, which is erroneous." Since the connotation "rectify" presupposes existence of a mistake and then qualifies the same apparent from record, thus the precondition for rectification is there must be that an error, whether of law or fact, but it must be apparent from the fact of the record. The word "apparent" means that which is obvious, evident and manifest, what appears or has been made manifest, that which appears to the eye or mind, open to view, plain, patent and appear on fact of record. Reference in this regard was made to the case-law reported as 1992 PTD 570 (SC Pak). (CIT v. National Food Laboratories), (1994) 208 ITR 719 (CIT Hussain Bhai M. Badri); (1991) 64 Tax 60 (High Court Kar.) (National Food v. CIT PLD 1996 SC 542 (Sheikh Muhammad Iftikhar ul Haq v. ITO Bahawalpur) 1997 PTD (Trib.) 879 and 2004 PTD (Trib.) 297 to contend that rectification of the order passed by the Tribunal cannot be made at this juncture.
11. We do not subscribe to their contention that the matter in issue does not fall within the ambit of section 156 of the Repealed Income Tax Ordinance, 1979. Evaluating the facts of the case in its entirety and also the case-law cited at the bar we find that the judgment in the present case has been rendered relying upon another case, which is reported as 2005 PTD (Trib.) 960. In this reported case one of the reason given for declaring the assessment order made under section 62 for the assessment year 1998-99 to be invalid and ineffective was communication of the impugned order to the assessee beyond the period of time prescribed for making of assessment under section 64 of the Repealed Ordinance. Actually to arrive at this conclusive judgment of the Indian jurisdiction in re: (1974) 93 ITR 215 (H.C. Calcutta) was merely referred which was neither of binding character nor had any persuasive force. It is imperative to mention here that ratio decidendi of a case means which makes the decision a binding precedent for the future. However, the ground of a decision is the material fact of the case, so that if a similar or comparable set of facts come before the Court again, so that the new case is on "all fours" with an earlier case the Court will follow and apply the decision in the earlier case.
12. Further observed that the reason for the decision given in the earlier case is to be found in the judgment, which becomes a principle of law to be applied in future case. But there is room for argument in a later case what the decisive facts in an earlier case really were, and what the true reason for the decision was; what the Judge actually said in his judgment seems not to be regarded as conclusive. There may be more than one ratio decidendi of a case, which must all be considered. The House of Lords might regard a previous ratio as not binding where it was obscure or too wide, or where the decision itself was "out of line".
13. It is settled principle that where a Court proceeds to give more than one reason for a decision, per se both the reasons would be binding (AIR 1961 Raj. 250), but the Court is entitled to consider the correctness of the reasons and in re Holdmens Settlement Trust Lord Denning summed up the position in the following words:---
"It seems to me that, if the House of Lords give two reasons for their decision and afterwards find that one of the reasons was right and the other was wrong, then they are entitled to accept the right reason and reject the wrong. The decision is not authority for nothing. It is authority for the right reason, but not for the wrong".
14. Coming to the case of Indian jurisdiction, referred to in the reported judgments, the High Court has rendered the judgment in that case on altogether distinct and different eventuality viz the case of the present assessee. In that case judgment was rendered on an administrative order passed by the Administrative Commissioner in order to seize the books of accounts. Conversely in the present case a judicial order has been passed in terms of section 62 of the Income Tax Ordinance, 1979 which under the statute is not only appealable before the Commissioner of Income Tax (Appeals) but also before the Tribunal. On the question of law, High Court is conferred with the jurisdiction to answer the question(s) referred to it by the Tribunal. Appeal against the High Court's order passed in the reference application also lies before the Apex Court of Pakistan. This reported judgment of the Indian jurisdiction at the first place was referred before the first appellate authority in another case namely Messrs Bhundari Industries, Kamoke, Gujranwala and the impugned assessment order was declared invalid and ineffective being the order was communicated to the affected party after the limit of time provided under section 64 of the Repealed Ordinance for the purposes of making the assessment. This order was assailed by the department before the Tribunal and the' order passed by CIT(A) was maintained by it vide ITA No. 6238/LB/1999, dated 19-9-2000, without thrashing out the ground realities of the two cited cases of Indian jurisdiction (1994) ITR 215 and AIR 1996 SC 1313. Even the case referred to AIR 1996 SC 1313 has no direct or indirect bearing with the facts of the case in hand. It is pertinent to state here that this unreported decision of the Tribunal was followed in another case, which is now reported as 2005 PTD (Trib.) 960, without commenting a single sentence about validity of the Indian case-law. Thereafter this reported judgment of the Tribunal has been followed in the present case without finding out applicability of the cases of Indian Jurisdiction and their reliance to the words used in subsection (1) of section 64 of the Late Ordinance.
15. We have no ambiguity in our mind that the law does not permit that if, owing to inadvertence, any mistake has been committed in the C order that should go on travelling for all times to come. That is why the legislature in order to plug such mistake(s), has brought on the Statute Book the provisions of section 156 of the Ordinance. To understand as to whether the reported judgments of the Indian Jurisdiction have any direct or indirect bearing with the facts of the present case, the relevant paras are being reproduced hereunder:--
(1974) 93 ITR 215 (H.C. Calcutta)
Although that was a decision under section 34 of the Indian Income Tax Act, 1922, the observations of the Supreme Court that the earlier stages of the proceedings for recording reasons of the Income-tax Officer and for obtaining the sanction of the Commissioner are administrative in character and not quasi-judicial, are very relevant and pertinent. There is nothing in section 132(8) of the Act to indicate that the Commissioner should have a quasi-judicial approach in giving his order of approval to the retention of the books. On the other hand, it seems to us that the order of the Commissioner in giving the approval is nothing but an administrative order and the respondent is not entitled to a show-cause notice or to an opportunity of being heard before the Commissioner makes the order approving retention of the books beyond the prescribed period. I must emphasize that, in this case, the two significant feature are, firstly, that the statute has clearly provided for an opportunity of being heard being given to a party in some of the other subsection of section 132 and no such provision has been made in subsection (8). Secondly, the statute does not require that the reasons recorded by the authorized officer should be communicated to the party affected by the order, nor that such a party should be heard by the Commissioner before he made the order approving the retention of the books beyond the prescribed period.
For the reasons mentioned above, this appeal fails and is accordingly dismissed. There will be no order as to costs.
AIR 1996 SC 1313
(14) There as to the reasonable opportunity guaranteed by S.14(2) of the Ordinance, it is clear that a copy of the report made against him has not been supplied to the respondent; and even when he was heard before the order of dismissal was passed against him, he had no means of knowing that grounds had weighed with the Enquiry Committee when it made a report against him. Having regard to the procedure adopted by the State authorities in appointing the Enquiry Committee, in formulating the questionnaire containing the charges against the respondent. In making the report, and in dealing with the recommendations made by the Chief Secretary from time to time, we are satisfied that the High Court was right in coming to the conclusion that the respondent had not received a reasonable opportunity to make his defence, and that the proceedings of the enquiry and the report made by the Committee, as well as the final order of dismissal passed against the respondent have contravened the safeguards guaranteed by section 14(2) of the Ordinance.
(15) The result is, the appeal fail and is dismissed with costs.
16. From bare reading of these paras, yes, one can easily jump to the conclusion that the cited cases do not have any direct or indirect impact or concern with the matter in issue. How come such judgment can be held to be a binding precedent to be followed in future. Consequently, not only the legal but also factual mistake has been cropped up in the order rendered by the Tribunal in the present case or in other reported or unreported cases to which the provisions of section 156 are squarely attracted. Thus, the case-law relied upon such as PLD 1995 SC 423 does not come at the assessee's rescue.
17. We are also not inclined to agree with the contention raised by the learned counsel(s) that the cases of Indian jurisdiction cited supra are not part of the record to recall and rectify the Tribunal's order rendered in the present case. Since, copies of the reported and unreported judgments were referred to at the bar and also as a matter of fact are mentioned in the reported Tribunal's judgment therefore, such orders certainly constitute part of the record. Hence, this objection is over-ruled.
18. Further contended that since the department has not applied to the High Court under section 136(3) of the Ordinance after rejection of reference application on the point of limitation, therefore, the order passed by the Appellate Tribunal on appeal shall be final in accordance with subsection (9) of section 135 of the Ordinance. This plea is bereft of any merits. If such contention is allowed to go, an absurd situation would arise. Reason being if a mistake of law and fact has been crept in the order that order certainly requires rectification and modification under section 156 of the Ordinance. Finality is attached to the extent that the order passed by the Appellate Tribunal on appeal shall be final being not assailed further by way of applying to the High Court or by invoking the writ jurisdiction. No other meanings, as, has been stated supra, can be attached to subsection (9) of section 135 if read in consonance with the provisions of section 136 of the Repealed Ordinance.
19. The other contention that since the matter in question gives rise to a legal controversy which is referable to the High Court in the circumstances and therefore does not fall within the scope of section 156 of the Ordinance, does not carry any force. Yes, to this extent we agree with the contention of the learned A.R. that if any legal controversy arises in a case, the question so posed ought to be referred to the High Court for its authoritative pronouncement. But this is not the situation here. Actually this is a case where a mistake of law and fact has been crept in which is so glaring and apparent from the record to which the provisions of section 156 are duly attracted. Strangely on the strength of an administrative order passed by the Administrative Commissioner of Income Tax, the order made by the quasi judicial authority has been struck down. Evidently, this Tribunal has neither entered into any controversy or investigation nor taken into consideration any additional evidence in order to invoke the provisions of section 156 of the Ordinance. Rather by mere reading the reported Indian judgments it may immediately strike on the face of it that reliance place on such judgments to declare the assessment to be invalid and ineffective is not proper. It would be worthwhile to state at this juncture that if practice of referring the mistake(s) to the High Court by way of reference application is allowed to go, then the provisions of section 156 would go redundant. Besides, this would also result into burdening the High Court with unnecessary litigation. Since, the matter in question is so clear which does not give rise to any legal controversy, therefore, to amend and rectify the order passed by the Tribunal or by any tax authority in such circumstances is within the domain of section 156 of the Ordinance. Thus the case-law relied upon in this regard would not come at the assessee's rescue as such.
20. The other contention raised by the learned counsel that the Tribunal by itself cannot sit on its own judgments and cannot review its order from a different angle. This plea is not well-placed. A question arises. If there occurs a need to amend or to rectify a mistake apparent from the record or from the judgment, as to whether the Tribunal for that matter would become functus officio to proceed accordingly. This cannot be intent and purport of the legislature that the mistake apparent from the record cannot be rectified or amended. The words "sit on its own judgments" connotes altogether different expression. It means re-evaluation of the facts which were considered earlier while delivering the judgment or passing the order so as to upset the judgment or the order which is not the situation in the present case. Conversely, without any shadow of doubt a mistake of law and fact has been cropped up in the order passed in the present case that is why the provisions of section 156 of the Repealed Ordinance have been invited. In fact, the legislature in terms of section 156 of the Repealed Ordinance has empowered the Income Tax Authority or the Tribunal to amend and rectify any order passed by it either on its own motion or on such mistake being brought to its notice by any Income Tax Authority or by the assessee himself. Since, the mistake pointed out by the Tribunal in its order dated supra is of a nature to which the provisions of section 156 are certainty attracted.
21. There is also no cavil to the proposition that the debatable issues, which need thorough deliberations, are not amenable to provision of section 156. But this is not the situation in the instant case. In fact the legal and factual mistakes had been crept in the order passed by the Tribunal which occurred on account of furnishing an irrelevant case-law. This fact is as evident as day light and as such neither chain of arguments nor a long debate is required to understand the mistake. Furnishing of an irrelevant judgment and relying upon which the decision has been made affecting the rights of either party is certainly a mistake apparent from the record. We however, agree to the learned counsel that the Tribunal has no power so as to review its own judgment but the provisions of section 156 vividly empowers the Income Tax Authority or the Tribunal to amend or rectify its order where a mistake of law and fact has been taken place as has been happened in the present case. It is cardinal principle that interpreting a provision of law on the strength of an irrelevant judgment, without any ambiguity, is a mistake apparent from the record. The two words used in section 156 "amend" and "rectify" are very significant. Both these words have different dimensions and complexion. Whenever the word "amend" is used, it means to improve, to change or modify for the better by removing defects or faults, to correct, to revise, to alter. While the word "rectify" means to correct or define something which is erroneous or doubtful. Actually by using these two words in section 156 the legislature has encompassed all the possible eventualities which may encounter while rectifying the order with the object to administer justice. As the order already passed can be altered or changed or corrected or defined partially or as a whole provided any mistake apparent from the record is brought to the notice of the Income Tax Authority of the Appellate Tribunal depending upon circumstances of each case. (Underlined for emphasis only). Even suo motu action can be initiated by such authority or the Appellate Tribunal. In this view of the matter these two words have the inherent characteristic of rectification or recalling of the order but all this depend on the circumstances of each one of the case. It is almost settled principle that rectificatory provisions are always used as a tool to improve, change, modify, alter, revise the order for the better by removing defects, faults, mistake etc.
22. There is also no force in the contention of the learned counsel that the very constitution of the Full Bench for the purposes of rectification, itself speaks of importance of the matter requiring a verdict of a superior bench so as to resolve a debatable issue which is not covered by the provision of section 156 of the Ordinance. In fact this Full Bench has been constituted in order to modify and rectify the mistake which has been erupted on account of following the irrelevant and wrong judgment. We would also like to add here that irrelevant judgment is that judgment which is not relating or applicable to the matter in issue or not supporting the issue of fact to be proved. Such judgment is always disallowed and cannot be followed being per incuriam.
23. We would also like to state here that the Chairperson of the Tribunal is fully empowered in terms of subsection (5) of section 135 of the Ordinance to constitute Benches amongst members of the Tribunal. In addition to the Appellate Tribunal under subsection (8) of this section has the power to regulate its own procedure, and the procedure of Benches of the Tribunal in all matters arising out of the discharge of its functions including the places at which the Benches shall hold their sittings. Thus, the Chairperson of the Tribunal in exercise of his statutory powers is competent to constitute Full Bench for adjudication of appeals, references and applications including rectification of the orders. Hence, objection regarding constitution of Full Bench for rectification of order passed in the present case is not sustainable.
24. We are now reverting to the provision around which the whole controversy revolves. That is subsection (1) of section 64 of the Repealed Income Tax Ordinance which is being reproduced hereunder for the purposes of convenience and ready reference:--
Limitation for assessment
(1) No Assessment under (section 59A) section 62 or section 63 shall be made after the expiration of two years from the end of the assessment year in which the total income was first assessable.
Bare reading of this subsection, in an unequivocal words lays down the following steps to be taken in order to make the assessment.
(1) First one is that no assessment shall be made other than the section 59A, 62 or 63 of the Repealed Ordinance, (Underlined for emphasis only);
(2) the other one is that such assessment shall be made within the period of two years after the end of the assessment year in which the total income was first assessable.
The significant word used in this subsection with particular reference to assessment is "made". This is second form of the verb. First one is "make". In general term this word means to manufacture, to create out of nothing, to produce. According to dictionary meaning this word specifies to cause to exist, to execute, bring into existence things and to prepare and sign to issue. When viewed in this perspective the limitation provided in this subsection is relevant to "making of assessment" and no other interpretation can be attached to such words. Reverting to the reported and the one unreported judgment of the Tribunal it has been explained therein that under the law making of order under statutory provision means that the order must be communicated to the party effected by such an order on or before the period of time specified under subsection (1) of section 64 of the Repealed Ordinance. Both the phrases "making of assessment" and "communication of the order" are two distinct and independent steps to be followed. In fact "communication of the order" is only a part of process of reaching final conclusion to the party after "making the assessment". If explanation of section 64(1) of the Repealed Ordinance, as has been enunciated in the reported and unreported judgment of the Tribunal is allowed to be adopted then the provisions of section 154 of the Ordinance would go as surplusage and redundant. This section 154 has specifically provided mode and manner of service of notice order or requisition under the Repealed Ordinance. As per the scheme of the Repealed Income Tax Ordinance, 1979, the assessment order made under section 64 shall be served upon the party in the manner laid down under section 154 of the Late Ordinance. Actually the cut date provided in section 64 in an unambiguous language is relevant to "making of assessment" but dose not include communication of the order within that period.
25. It is a well-established rule of interpretation of statute that neither provisions nor any word in a statute can be treated to be redundant. Thus, in no way "communication of the order" can be shoved in the limitation of time provided for completion of assessment. Rather the phrase communication of the order" is alien to the limitation of time provided for "making of assessment" under section 64 of the Repealed Ordinance.
26. There is also no ambiguity to this proposition that fiscal statute should be interpreted according to their natural meanings. Neither there is room or any intendment nor any presumption can be attached to any provision of the statute as to what extent hardship may appear to the judicial mind to be.
27. Thus if the case is not brought within the words of the statute interpreted according to their natural meaning and if there is a case which is not covered by the statute so interpreted that can be cured by invoking the provisions of section 156 of the Repealed Ordinance being mistake of law has been crept in.
28. In fact this is the duty of a Court of construction in such cases is not to speculate on what was likely to have been said if those, who framed the statute had thought of the point which has arisen but recognizing that the words leave the intention obscure, to construe then as they stand, with only such extraneous light as is reflected from within the four corners of the statute itself, read as a whole. It is well-settled principle that Courts should follow that construction of law which does not lead to startling results or destructive ends. Rather the fiscal statutes should be interpreted strictly in accordance with the letter of law used and the words employed and the Court cannot imply anything not expressed in statute.
29. We have also gone through all the case-law either relied upon by Mr. Iqbal Hashmi, Advocate or furnished by Mr. Shahbaz Butt, Advocate at the bar and also one of the apex Court of Pakistan in re:-PTCL 1988 CL 372 to support the contention of invoking the provisions of section 156 of the Ordinance and also communication of the order to the affective party but the decision in all those cases have been rendered on altogether distinguishable facts viz. the present case. It would not be out of place to mention here that the case reported as PTCL 1988 CL 372 supports the Tribunal's point of view. In that order it was observed that where a Bench of three members heard the case and two members signed the decision and the third member does notsign and the order was also not communicated, it cannot be said that there is a final decision. In that case a difference of opinion arose between the members who heard the case and finally a Full Bench of five members to hear the case was formed which was held to be legally constituted. In this background it was observed that communication of the order of the Tribunal is a ministerial act where the Tribunal has decided upon an order to be so communicated. Hence, no reliance has been placed on all the cases referred to before us.
30. Resume of above discussion is that since mistake of law and fact has been cropped up in the Tribunal's order rendered in the instant case, dated 7-4-2005, therefore, this Tribunal is vested with the powers to amend and rectify its order and it is so ordered accordingly.
31. Further held that the limitation prescribed under section 64 of the Repealed Income Tax Ordinance, 1979 is relevant to making of assessment order and not its communication to the parties within that limit of time. In the result, the order, dated 7-4-2005 passed by the Tribunal in respect of cross-appeals relating to assessment year 1998-99 is hereby recalled and the appeals are restored to their original numbers so that the other grounds raised by the rival parties in appeal could be adjudicated upon. The Assistant Registrar (Roster) is directed to enlist June, cross-appeals for the assessment year 1998-99 in the second week of 2006.
32. Since, the cross-appeals in respect of assessment year 2000-2001 have been decided on altogether different set of facts, therefore, the remain findings so intact recorded by the Tribunal in its order, dated 7-4-2005 shall intact.
33. Ordered accordingly.
C.M.A./93/Tax (Trib.)Order accordingly.