I.T.A. No.321/KB of 2005, decided on 12th April, 2007. VS I.T.A. No.321/KB of 2005, decided on 12th April, 2007.
2007 P T D 2088
[Income-tax Appellate Tribunal Pakistan]
Before Khawaja Farooq Saeed, Chairperson
I.T.A. No.321/KB of 2005, decided on 12/04/2007.
Income Tax Ordinance (XXXI of 1979)---
----S. 132---Decision in appeal---Exemption---Withdrawal of---Appeal against---Rejection of appeal by the First Appellate Authority by holding that no appeal lay against an order of the Commissioner through which he withdrew the exemption earlier allowed to the assessee---Validity---Order of the Commissioner enhancing the liability by withholding the exemption, was a very well appealable order---First Appellate Authority was directed to re-admit the case on the basis of already pending file before him and decide the said issue after considering the appeal, filed by the assessee to the extent of its provision in law and to decide the substantive question accordingly.
Pak Saudi Fertilizer Limited's case 1999 PTD 4061; Genertech Pakistan Limited v. ITAT 2004 PTD 2255 and PLD 2006 SC 602 ref.
Munib Akhtar for Appellant.
Hanif Shaikh, DR for Respondent.
ORDER
KHAWAJA FAROOQ SAEED, CHAIRMAN.---This appeal on behalf of the assessee says that the CIT(A) was not justified in rejecting the case in limine by holding that no appeal lies against an order of the Commissioner through which he withdrew the exemption earlier allowed to the assessee.
2. The learned AR, while supporting the claim that the order is appealable, said that the same is covered under the relevant section in the manner that this has resulted in the increase of the liability of the person. He said that not only the new law is clear on the subject but the same has the support of earlier judgments on the issue, more prominent of which is by Honourable Judges of the High Court of Sindh in the case of Pak Saudi Fertilizer Limited reported as 1999 PTD 4061. Referring the same he said that the same is applicable on all yours on the facts and circumstances of the case in the manner that the Assessing Officer had, through an order, asked the assessee to pay more advance tax than he was paying under the provisions of the then section 53. The result of the said order was increase in payment of the instalment which was held to be as pre1udicial to the assessee by the Honourable High Court.
3. The learned AR has referred Pew other judgments as well, however, the ratio of this judgment being more relevant to the facts of the case under discussion, needs further discussion.
4. The learned DR tried to distinguish the facts therein by saying that it is in respect of an advance tax and the Honourable High Court has held that the Assessing Officer had no power to pass an order under the subject provisions of section 53(1). The objection of the learned DR, however, is not valid in the manner that the other issue which in tact is the issue in this case as well, was as to whether an appeal lies against an order like this or not, has also been thrashed out. The Honourable High Court after placing reliance upon certain other judgments, had ultimately held that the expression "or otherwise increasing the liability of the assessee"' was of an omnibus nature and being of a wide application, covered a situation like this. In the impugned case, the situation is identical in the manner that the withdrawal of the exemption had obviously increased tax on the interest paid to this assessee which they had earlier stopped for the reason of the exemption certificate issued by the same authority. This would not need any dilation or discussion to say that his order of issuance of the exemption or for that matter withdrawal of exemption, both are `'order" and the law has provided appeal against the same if the same results in increase of the liability, in very clear and unambiguous terms.
5. Case of the Department remains that after the decision in the case of Genertech Pakistan Limited v. ITAT reported as 2004 PTD 2255, the interest income received by a power generation plant, has been confirmed to be as taxable and the provisions of Clause (132) of the Second Schedule to the Income Tax Ordinance, 2001 are not applicable thereon. The learned CIT(A), therefore, was fully justified in withdrawing the exemption. This emphasis by learned DR on the basis of judgment of the Honourable Supreme Court obviously would not require any comment and the judgment being binding on all persons working in any capacity in Pakistan, would enjoy respect as is required by the Constitution of Islamic Republic of Pakistan, 1973. However, since presently it is not an issue before me, I leave it for the substantial discussion on the subject whenever the same comes before me, Presently, I am only to decide as to whether the refusal to allow an exemption amounts to enhancement in liability or consequently whether the same is an appealable order or not'?
6. The Court have never restricted the remedies to the public at large by holding that certain orders have not specifically been declared as appealable under law. The subjects cannot be left to the mercy of the administrative officers by holding decisions at subordinate stage as final. The duty of the Courts, therefore, as has always been propounded by various forums, is to provide right of appeal to any person against any order. Such situations have never been appreciated by any superior judicial authority. To say that law does not provide any remedy to an order .made by any authority generally is against the basic principle of law, justice, jurisprudence and the Islamic system of dispensation of justice. Not only that in the present case, this has been so specifically provided to cover the situation like the under discussion as is mentioned above, but even otherwise the Honourable Supreme Court in such situations, has held that under the Islamic system of dispensation of justice; at least one appeal should be made available as a matter of right. This 'has been so held in a Full Bench judgment reported as PLD 2006 SC 602. The Honourable Supreme Court has in this regard, even gone to hold that any statute which does not provide at least one appeal, is unreasonable and can be struck down for the reason of its being unconstitutional. Obviously, in an Islamic country, if this Islamic principle is not properly observed, the law can easily be held as not only against the Islamic principles of jurisprudence as well as 'unconstitutional, hence the same can be struck down by the Courts of the jurisdiction.
7. Having referred above discussion and without any doubt with regard to the principle enunciated in the Honourable High Court's judgment quoted as 1999 PTD 4061. I consider that the order of the Commissioner enhancing the liability by withholding the exemption, is a very well appealable order and direct the CIT(A) to re-admit the case on the basis of already pending file before him. Further, he will decide the case on merits and obviously, the case of Genertech Pakistan Limited v. ITAT shall duly be discussed along with other judgments on the subject given by this Tribunal while deciding the issues like this. My answer, as a result, is obvious. The action of the CIT(A) of withdrawing the exemption and holding the interest as chargeable to tax not being an issue before me, has not been commenced. I have only advised the CIT(A) to decide the said issue after considering the appeal filed by the assessee to the extent of its provision in law and to decide the substantive question accordingly.
8. Order accordingly.
C.M.A./60/Tax(Trib.)Order accordingly.