I.T.A. No. 1320/KB of 2005, decided on 23rd April, 2007. VS I.T.A. No. 1320/KB of 2005, decided on 23rd April, 2007., 2007 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 2061 (2007)

Income Tax Ordinance (XXXI of 1979)---

----Ss.156, 62/65 & 13(1)(aa)---Rectification of mistake---Rectification application was rejected by the Assessing Officer by observing that grounds given in the application. had been discussed in the order of Appellate Tribunal and the matter could not be rectified at the level of Assessing Officer---Setting aside of rejection order by the First Appellate Authority with observations that objection taken by the assessee had been rejected without valid justification---Validity---Authority which could rectify the order was the authority which passed the final order and not the lower authority---Factual controversies pointed out in the application having been decided, any legal issue covering mistake apparent from record, could not be taken at the lower level as all the mistakes, if any, had been subject-matter of appeals---No justification was available to set aside the matter for de novo consideration---Departmental appeal was allowed and the order of refection of rectification application by the Assessing Officer was maintained by the Appellate Tribunal.

Abdul Hameed Sangi, D.R. fot Appellant.

Abdul Tahir Ansari, LT,P. for Respondent.

ORDER

'The Department being aggrieved and dissatisfied from the order dated 21-6-2005 passed by the learned C.LT.(A) has taken following objection to the order:---

"That keeping in view the facts and circumstances of the case, the learned C.I.T.(A) was not justified to set aside the order wheel issue stood decided by his predecessor C.I.T.(A), and also upheld by the learned Income Tax Appellate Tribunal on same issue for the same years."

2. We have heard the learned representatives of the two parties. Facts leading to present case are that initial order under sections 62/65 was challenged before .the Appellate Additional Commissioner. The learned A.A.C. deleted the addition made under section 13(1)(aa) of the Income Tax Ordinance, 1979. The Tribunal however, while deciding the Departmental appeal vacated the appellate order and restored the order of the Assessing Officer under sections 62/65. The assessee being aggrieved form the order of the Tribunal preferred a Miscellaneous Application before the Income Tax Appellate Tribunal making, request to recall the order passed in I.T.A. No.272/KB of 2003 on 30-9-2003. The application was rejected vide order dated 29-6-2004 passed in rectification application bearing No.572/KB of 2003. The details thereof are hereunder:---

"Having heard the learned representatives of the two parties we are of the view that the point taken in the rectification application is not the subject matter of the appeal as no such ground was taken by the assessee or department, hence order does not contain any finding regarding permission or not granting approval, hence for this reason order cannot be recalled therefore the application cannot be rectified at the stage of the Tribunal. "

3. The proceedings in the circumstances attain the character of a closed transaction even then the assessee filed application before the taxation officer for the reasons; (i) show cause letter was issued by your honour prior to the approval of learned IAC as no show-cause notice can be issued without prior approval of IAC, (ii) the IAC granted permission for re-opening which is equivalent to approval, (iii) the assessment was re-opened on the verification note of C.I.T., (iv) the matter was required to be re-opened in the assessment year 2001-2002 instead of assessment year 1999-2000 (v), the Commissioner of Income Tax conditionally approved the addition under section 13(1)(aa). The law required to finalise the assessment immediately whereas the approval was received by return of Fax of 30-1-2001 with no outward number. The learned Assessing Officer rejected the application observing that the grounds given have been discussed in the order of the I.T.A.T. therefore, the matter cannot be rectified at the level of the Assessing Officer. The learned C.I.T.(A) observed that the objections taken by the assessee have been rejected without valid justification, the C.I.T.(A) was however, pleased to set aside the rejection.

4. We have heard the learned representatives of the two parties and have gone through the record. The matter reflect history of litigation. The Tribunal was pleased to pass a comprehensive order in appeal in this case thereafter the assessee moved another Miscellaneous Application for rectification of the order alleging that show-cause notice was issued prior to the approval of the learned IAC and that the learned IAC in fact had granted permission in place of approval and that matter was re-opened in the year 1999-2000 instead of 2001-2002 and approval was received by return of Fax whereas no outward number has been given to approval letter.

5. All the grounds taken in Rectification Application at the level of the Assessing Officer are decided issue settled at the level of the ITAT in assessee's own case in the same assessment year. The issue of issuance of show-cause notice before re-opening of the matter was taken at the level of the Tribunal and the Tribunal was pleased to pass a verdict that such notice is not mandatory. We therefore, observe that the learned C.I.T.(A) without going through the order of the Tribunal, set aside the order of the Assessing Officer and took no pains to go through the specific finding of the Tribunal on this issue. Besides the issue regarding permission in place of approval is no more an issue in view of the Full Beach decision in I.T.A. No.59/KB of 2004 dated 17-2-2004. The remaining grounds are also of no consequences, besides after the disposal of the appeal by the learned Tribunal, the matter cannot be re-opened at the level of the Assessing Officer, on almost similar issues besides the legal issue taken at the level of the Assessing Officer can only be taken at the level of the Tribunal in view of the facts involved in this appeal as the authority which passed the final order is under legal obligation to rectify the mistake brought to its notice. The circumstances show that the only authority which can rectify the present order is the authority which passed the final order and not the lower authority. Since the factual controversies pointed out in the application are decided issue, airy legal issue covering mistake apparent from record cannot be taken at the lower level as all the mistakes if any have been subject-matter of appeals. In the circumstances supra, there is no justification to set aside the matter for de novo consideration. In consequences thereof, the appeal of the Department stands allowed, order of rejection of rectification application by the Assessing Officer is maintained.

C.M.A./89/Tax(Trib.)Appeal accepted.