Messrs FOOD CONCEPT (PVT.) LTD, through Director VS INCOME TAX APPELLATE TRIBUNAL OF PAKISTAN through Chairman, 2007 PTD-LAHORE-HIGH-COURT-LAHORE 2105 (2007)

Income Tax Ordinance (XLIX of 2001)---

----S.132(2)---Income-Tax Appellate Tribunal Rules, 2005, R.20(2)---Constitution of Pakistan (1973), Art.199---Constitutional petition---Appeal, dismissed for non-prosecution---Date of hearing---Scope---Failure to note next date---Effect---Appeal filed by petitioner was dismissed on the date which was not fixed by Income Tax Appellate Tribunal---Plea raised by petitioner was that the date on which the appeal was dismissed was not the date of hearing and his counsel railed to note that date---Validity---Income Tax Appellate Tribunal, according to the provision of S.132(2) of Income Tax Ordinance, 2001 read with R.20(2) of Income Tax Appellate Tribunal Rules, 2005, could proceed to dismiss the appeal in default, on the date fixed for hearing---Date on which the appeal was dismissed was not the date of hearing---Wrong date of hearing mistakenly entered in diary, was held to be sufficient cause for non-appearance of the party---Order passed by Income Tax Appellate Tribunal was without lawful authority, had no legal effect and was set aside---High Court remanded the appeal to Income Tax Appellate Tribunal for decision on merit---Petition was allowed accordingly.

Zahid Ahmad v. Deputy Director Adjudication and 2 others PLD 2006 Kar. 252; Municipal Committee, Rawalpindi through the Secretary, Municipal Committee, Rawalpindi v. Raja Muhammad Sarwar Khan 1968 SCMR 917; Jan Muhammad v. Bashir Ahmed and others .2002 MLD 1321; Abdul Basit Zahid and another v. Madoraba Al-Tijarah and another 2000 MLD 2067 'and Ghulam Qasim v. Ghulam Hussain PLD 1992 SC 577 rel.

Ch. Anwar-ul-Haq for Petitioner.

Jan Muhammad Chaudry for Respondent.

ORDER

SYED HAMID ALI SHAH, J.---The petitioner's appeal was pending before the Income Tax Appellate Tribunal the respondent, which was fixed for hearing on 4-10-2005. The case was adjourned to 17-11-2005 as the Accountant Member of the respondent was on leave. The petitioner's learned counsel failed to note the next date of hearing in his diary and escaped notice. Learned Tribunal dismissed the appeal for non-prosecution vide order dated 17-11-2005. The petitioner moved an application (M.A. No. 867-8/LB of 2005) for recalling of order dated 17-11-2005, but the same net the rate of dismissal through order dated 21-2-2006. The petitioner moved yet another application on 14-3-2006, praying therein for recalling of orders dated 17-11-2005 and 21-2-2006. Learned Tribunal dismissed the application vide order dated 26-7-2006, hence this petition.

2. Learned counsel for the petitioner has contended that the case of 'the petitioner pending before learned Tribunal pertained to assessment years 1997-98 and 1999-2000. Law applicable to the appeal was Income Tax Ordinance, 1979, whereunder the appeal is required under law to be decided on merits. It was further contended that learned Tribunal could proceed to dismiss the appeal, in default for non- prosecution, under the: provisions of section 132(2) of Ordinance, 2001 read with Rule 20(2) of ITAT Rules 2005. It was added that under the same provision of law, learned Tribunal had the jurisdiction to decide the appeal on available record. The jurisdiction has not been exercised judiciously, keeping in view the principles of natural justice. Learned counsel further submitted that the date fixed on preceding date, was by the clerk and not by the Tribunal itself and as such penal provision of Ordinance, could not be applied to non-suit the petitioner. Learned counsel summed up his arguments by submitting the non-appearance of the petitioner was neither deliberate nor wilful but due to bona fide mistake. The order of dismissal of default, was liable to be recalled but the learned Tribunal has not appreciated the case in its true prospective.

3. Learned counsel for the respondent, on the other hand, has drawn my attention to the ground urged for recalling the order of dismissal of appeal in default, whereby learned counsel for the petitioner has admitted that due to non-availability of the bench, he noted the next date and signed the order sheet, but omitted to record the same in his diary. It was added by the learned counsel that the petitioner's learned counsel has admitted his negligence. He then argued that negligence of the counsel is the negligence of the party and in case a counsel lacks his sense of responsibility to Court, it is party who should suffer for his negligence act and not the other side. Learned counsel supported his contention by referring to the case of Zahid Ahmad v. Deputy Director Adjudication and 2 others (PLD 2006 Kar. 252). Learned counsel lastly contended that the impugned orders, are passed in accordance with law and are not open to exception in constitutional jurisdiction.

4. Heard learned counsel for the parties and record perused.

5. The appeal of the petitioner was fixed before learned ITAT for 4-10-2005. The learned Bench was not available on the said date of hearing. The case was adjourned and appeal was fixed for 17-11-2005, by the Record-keeper, which was noted by the petitioner's learned counsel on order sheet. The date of hearing as envisaged in rule 19 of ITAT Rules 2005 is the one, which the Tribunal notifies to the parties to the appeal. Thus the date on which the appeal was dismissed in default,' was not a date of hearing. Additionally, the case of Nowsheri Khan v. Said Ahmad Shah (1983 SCMR 1092) needs specific mention wherein the Hon'ble Supreme Court of Pakistan has held as under:--

"There is no dispute that the appeal was adjourned to 16-9-1976 by the Moharrir (Reader) of the District Judge as the learned District Judge was absent on the date which was fixed earlier. This Court in the case of Muhammad Swaleh and another v. Messrs United Grain and Fodder Agencies PLD 1964 SC 97 while discussing the provisions of Order XVII, rule 2 of the C.P.C., while interpreting the words "the date of which the hearing of the suit is adjourned" observed that "adjourned", means "adjourned by the Court". Thus, the date 16-9-1976 could only be the "date to which the hearing is adjourned", if the appeal had been adjourned to this date by the Court itself and not by the Moharrir (or the Reader)."

6. Viewing the case of the petitioner from the above perspective, the appeal was dismissed on 17-11-2005, which was not a date of hearing. Learned Tribunal according to the provisions of section 132(2) of the Income Tax Ordinance, 2001 read with section 20(2) of ITAT Rules, 2005, can proceed to dismiss the appeal in default, on the date fixed for hearing. The appeal of the appellant in the case in hand, was dismissed on the date, which was not the date of hearing.

7. Adverting to the main contention of the petitioner that cause shown for restoration of appeal, was sufficient to allow the application moved by the petitioner before learned Tribunal Relevant provisions of law, in this respect is rule 20(3) of the Income Tax Appellate Tribunal Rules, 2005, which is reproduced hereunder:--

"20. Hearing, of appeal of application.----(1) On the date fixed or any other day to which the hearing is adjourned, the appellant or applicant shall be heard in support of the appeal or application. The Tribunal shall, then if necessary, .hear the respondent against the appeal or application and in such case the appellant or the applicant shall be entitled to reply.

(2) Where on the date fixed for hearing or any other day to which the hearing is adjourned, any or both the parties fail to appear when the appeal or application is called for hearing the Tribunal may if it deems fit, dismiss the appeal or application in default or may proceed ex parte to decide the appeal or application on the basis of the available record.

(3) The Tribunal may, recall the order passed under sub-rule (2) if the party in default applies within thirty days of the date of communication of the order and satisfies the Tribunal that he was prevented by sufficient cause to appear when the appeal or application was called for hearing. On recalling the order, the Tribunal shall fix a date for hearing of the appeal or application. "

An applicant before the learned Tribunal has to show a sufficient cause, which prevented the appellant/applicant to appear, when the appeal was called for hearing.

8. The petitioner has sought the recalling of the order of dismissal of appeal, on the ground that the petitioner's learned counsel failed to note the next date in his diary. Wrong date of hearing mistakenly entered in the diary, has been held to be sufficient cause for non-appearance of the party. In this behalf,, I am fortified by the dictum of aw laid in the cases of Municipal Committee, Rawalpindi through the Secretary, Municipal Committee, Rawalpindi v. Raja Muhammad Sarwar Khan (1968 SCMR 917), Jan Muhammad v. Bashir Ahmed and others (2002 MLD 1321) and Abdul Basit Zahid and another v. Madoraba Al-Tijarah and another (2000 MLD 2067). The Hon'ble Supreme Court has held that a human failing such as miscalculation, misunderstanding or misinformation as sufficient cause for restoration of suit etc. dismissed in default. Reference in this respect can be made to the case of Ghulam Qasim v. Ghulam Hussain (PLD 1992 SC 577).

9. For what has been discussed above, the orders passed by the learned Tribunal dated 17-11-2005, 21-2-2006 and 26-7-2006,, assailed in this petition, are without lawful authority and have no legal effect, therefore, set aside. The appeal of the petitioner, resultantly; is deemed to be pending before the .learned ITAT, which shall be decided' on its own merits, after hearing the parties. The parties shall bear their own costs.

M.H./F-18/LCase remanded.