2008 P T D (Trib.) 859
[Income-tax Appellate Tribunal Pakistan]
Before Jawaid Masood Tahir Bhatti, Judicial Member and Ch. Nazir Ahmad, Accountant Member
M.As. (Cond.) Nos. 13/LB to 15/LB and I.T.As. Nos.361/LB to 363/LB of 2007, decided on 01/09/2007.
Income Tax Ordinance (XLIX of 2001)----
----Ss.129(4) & 131(2)(d)---Income Tax Ordinance (XXXI of 1979), S.132(4)---Decision in appeal---Service of order on "Authorized Representative" of the assessee---Legality---Section 132(4) of the Income Tax Ordinance, 1979, provided that on disposal of appeal, Appellate Additional Commissioner shall communicate the order passed by him to the appellant and to the Commissioner---Likewise, under S.129(4) of the Income Tax Ordinance, 1979, similar provisions had been enacted that after deciding the appeal, the Commissioner (appeals) shall serve his orders on the appellant and the Commissioner; in both the Ordinances, the word "shall" had been used regarding service of orders passed by the First Appellate Authority and it had been mentioned that the order will be served upon the appellant and the Commissioner and the word "representatives" had not been provided---Although, the Authorized Representative represented the assessee before First Appellate Authority, but order under the law was to be served upon the appellant, which did not include representative of the appellant---Due to clear provisions of law, the order of First Appellate Authority shall be communicated to the appellant and to the Commissioner---Department failed to establish that order of First Appellate Authority had been served or communicated to the assessee/appellant---Application for condonation of delay was allowed and the main appeals were directed to be fixed for hearing after issuing notices to both the parties.
I.T.A. No.664 of 1999; 2007 PTD 1; 1984 PTD (Trio.) 143; 1986 PTD (Trib.) 188; (1960) 2 Tax (Supply) 279; (1978) 38 Tax 148 (India HC); 1988 PTD 135; (1960) 2 Tax (Supply 166); 2002 PTD 608; 2002 PTD 506; 2003 CLC 1841; 1989 SCMR (sic); 2005 PTD 2586 and (2005) 91 Tax 419 (Trib.) ref.
2007 SCMR 49; 2004 PTD 1784; Ramnivas Hanumanbux Somani v. S. Venkataraman. Income Tax Officer 1989 PTD 843; 2002 PTD 3998; 19 Tax 01; 1989 PTD 817; 2005 PTD 2376; PLD 1983 SC 385; 2001 SCMR 1429; 2001 SCMR 1822 and AIR 1938 Nagpur 156 distinguished.
Ch. Anwaar-ul-Haq for Applicant.
Rana Javed Iqbal, C.I.T.(LTU) for Respondent.
ORDER
Through these three Miscellaneous Applications filed under section 131(4) of the Income Tax Ordinance, 2001 along with the three appeals filed by the assessee bearing I.T.A. Nos.361 to 363/LB/2007 (Assessment years 2000-2001 and 2001-2002) against the consolidated impugned order of the learned C.I.T. (A), dated 25-8-2005 deciding three appeals filed by the assessee for the assessment year 2000-2001 against the orders of the Taxation Officer passed (i) under section 221 of the Ordinance, 2001 (ii) under section 62 of the late Ordinance, 1979 and (iii) under section 205/89, the assessee/applicant has requested for the condonation of delay in filing the appeals on the following common grounds:---
(3) That the appellant company had engaged Mr. Nawaz Khan, FCA of Messrs Qadeer and Company, Chartered Accountants 89 Jail Road, Lahore as its AR who had conducted the assessment proceedings for a number of assessment years and also filed appeals against the assessment orders before the C.LT. (A) including the subject matter appeal. During the year 2005 the applicant company dispense with the services of Messrs Qadeer and Company and Messrs Taseer Hadi and Company Chartered Accountants superseded it.
(4) That the applicant company had neither appointed Mr. Anwar-ul-Haq, Advocate in the aforesaid appeal before the CIT. (A) nor he signed the power of attorney in this regard.
(5) That on pressure for the payments of alleged demand of tax or the year, the applicant company approached the respondent's office in the last month and then it comes to its knowledge that the titled appeal had been decided by the C.I.T.(A).
(6) That vide letter, dated 14, 2007, the applicant approached to the C.I.T. (A) for obtaining the copy of the appellate order and vide letter No.285, dated 9-4-2007 the C.I.T. (A) informed that appellate order had already been served on AR namely Mr. Anwar-ul-Haq, Advocate on 10-10-2005. Therefore, the applicant vide application, dated 11-4-2007 applied for the certified copy of the order and the same was delivered on 12-4-2006.
(7) That after the aforesaid knowledge of the fact that the service of the appellate order was made on Ch. Anwar-ul-Haq, Advocate, the applicant company contacted him and he told that some time back on service of the aforesaid order in his office at 4-Umer Plaza, 1-Mozang Road, Lahore he handed over the same to Mr. Amin Khan an employee of Messrs Qadeer and Company. Later on, upon contact to Mr. Nawaz Khan proprietor of Messrs Qadeer and Company, he told that his said employee had left the job since December, 2005 and said employee never delivered the said order to him.
(8) That after the receipt of the attested copy of the impugned appellate order, the applicant on 14-4-2007 has engaged to Ch. Anwar-ul-Haq, Advocate for filing the titled appeal before this Honourable Tribunal.
(9) That the applicant/appellant had neither received the original ex parte appellate order, dated 25-8-2005 of the C.I.T. (A) nor the same was served upon it on 10-10-2005. In terms of section 129(4) of the Income Tax Ordinance, 2001 the learned C.I.T. (A) was obliged to communicate its appellate order to the appellant and therefore; the service of appellate order, dated 25-8-2005 upon a person other than appellant/ assessee had no legal sanctity in the eyes of law. Reliance in this regard may be placed on the following judgments:---
I.T.A. No.664/1999 LHC (DB); 2007 PTD 1 (HC DB); 1984 PTD (Trib.) 143 1986 PTD (Trib.) 188; (1960) 2 Tax (Supply 279 LHC; (1978) 38 Tax 148 (India HC); 1988 PTD 135 and (1960) 2 Tax (Supply 166)
(10) That in terms of Power of attorney executed AR/Counsel Messrs Qadeer and Company was engaged only for the purpose of representing the applicant before the C.I.T. (A) and he had no authority to receive the appellate order.
(11) That Mr. Anwar-ul-Haq, Advocate was neither appointed as AR in the titled appeal before the C.I.T. (A) nor he had signed the power of Attorney annex with the said appeal. Therefore, he was neither Counsel engaged in the titled appeal nor service of appellate order for the year upon him was legal service.
(12) That the limitation for filing the appeal before this Honourable Tribunal in terms of section 131(1)(d) of the Income Tax Ordinance, 2001 shall start from 13-4-2007 when the attested copy of the impugned appellate order, dated 25-8-2005 was served to the applicant/assessee, therefore the appeal filed on 18-4-2007 is well in time.
(13) That the ex-AR of the applicant Mr. Nawaz Khan, FCA of Messrs Qadeer and Company and Mr. Anwar-ul-Haq, Advocate have affirmed on oath that they have not delivered the copy of the appellate order, dated 25-8-2005 to the applicant company. In this regard their affidavits are attached herewith.
(14) That in terms of section 128(1) of the Income Tax Ordinance, 2001 it was mandatory for the C.I.T. (A) to give notice of the day fixed for hearing of the appeal to the appellant. But, neither such notice for hearing on 17-5-2005 as mentioned in the impugned order was given nor the same was any adjourned date from any previous date of hearing. Therefore, order, dated 25-8-2005 based upon the date of hearing 17-5-2005 is void and 'without jurisdiction, hence limitation against such order would not run.
(15) That the period from 10-10-2005 (day when the order was served upon the person other than the applicant company) to 12-4-2007 the day when the applicant/assessee received the attested copy of the impugned order, dated 25-8-2005 is liable to be excluded for the purpose of calculation of limitation to file the appeal.
(16) That neither the applicant is contumacious in his action nor it did stand to gain anything by delaying an appeal and nor a delay on his part gave rise to or create valuable right in favour of the revenue, therefore request of the applicant for the condonation of delay is liable to be considered objectively. Reliance may be placed on 2002 PTD 608 and 2002 PTD 506.
(17) That there was no deliberate intention of the applicant in alleged late filing of appeal and in case the alleged delay of 489 days in filing the appeal has not been condoned the applicant/assessee shall suffer an irreparable loss and injury.
Without prejudice to the above.
(18) The appearance of the said AR/Counsel before the learned C.I.T. (A) was in terms of clause (b) of sub-rule (2) of Rule 1 of Order V of C.P.C. as "Pleader" appointed under Rule 4 Order III of C.P.C. by the "recognized agent" known as director of the applicant company.
(19) That in terms of clause (2) of Rule 4 of Order III of C.P.C., the appointment of said pleader was until the completion of proceedings before the C.I.T. (A) and in terms of subsection (4) of section 129 of the Income Tax Ordinance, 2001 it is mandatory for service of appellate order on the appellant. Even, it is the duty of' the serving officer to establish service, not by the assessee.
(20) That the relation of the applicant and his said AR was as "client and pleader". The applicant had never appointed him as "agent" to act on behalf of his principal/applicant as defined in the Orders III and V of the C.P.C. Whereas, under .the law, a recognized agent may act on behalf of the principal and can only appear before a Court but cannot "plead" on behalf of the "party". Even otherwise, the service of appellate order on the agent is valid only if he empowered in writing to accept the same on behalf of its principal. Reliance may be placed on 2003 CLC 1841 and 1989 SCMR (sic).
Along with the above said applications, in support of the contents of the grounds of applications, the affidavits of Mr. Nawaz Khan, FCA of Messrs Qadeer and Company, Chartered Accountants and Ch. Anwar-ul-Haq, Advocate have also been filed solemnly declaring and affirming that the contents of the above referred grounds are correct to the best of their knowledge and belief.
This case has been heard in detail on 25-4-2007, 27-7-2007 when Mr. Muhammad Aslam Lilla, learned DR represented the department and argued the case, who has also placed before the Bench the paper book containing various documents and case law, which have been referred in the preceding paras of this order. However, he was not present on the final date of hearing i.e. 3-5-2007 when the case has been, argued by Mr. Rana Javed Iqbal representing the department.
Mr. Ch. Anwar-ul-Haq, Advocate representing the assessee has elaborated the above said grounds of appeal. He has contended that on behalf of the assessee, it has been submitted on oath through affidavits that in the month of March, 2007 it came to the knowledge of the assessee company that the above titled appeals had been decided by the learned C.I.T. (A). He has contended that the assessee vide letter, dated 14th March, 2007 approached learned C.I.T. (A) for obtaining copy of appellate orders, which were delivered on 12-4-2007. He is of the view that if the date of knowledge be considered as 1st March, 2007 even then instant appeals filed on 18-4-2007 before this Tribunal are well in time. The learned counsel has contended that as on behalf of the respondent/department, no further affidavits have been filed to rebut the contents of the affidavit tiled on behalf of the assessee, therefore, the submission of the assessee should have been accepted. The learned counsel has contended that recovery proceedings were initiated by the department and in consequence to the notice of recovery, there was compliance with reference to the demands created through original assessment orders and it has no nexus to the impugned appellate orders of the learned C.I.T. (A), as in that notice, there is no reference regarding the impugned orders of the learned C.I.T. (A). He has contended that the entire notices/letters issued by the department do not reflect a single instance about the decision or rejection of appeal filed by the assessee through the impugned orders of the learned C.I.T. (A). Whereas in response of the recovery notice dated March, 25, 2006 which was replied by the assessee vide letter, dated April, 28, 2006 wherein it was specifically contended that appeals filed by the assessee against order passed by the Taxation Officer under sections 89 and 62 of the repealed Ordinance, 1979 for the years under review are pending with the learned C.I.T. (A). In that letter, it was specifically mentioned that dates of hearing of appeal is 5-8-2004 and 11-6-2006 respectively. It was further mentioned in that letter that "The assessee was quite confident about available outcomes of the appeal filed and it was requested to please wait till the decision of the appeal. The learned counsel has contended that in respect of that letter on behalf of the department, it was never intimated that appeal of the assessee had already been rejected vide order, dated 25-8-2005. The learned counsel has contended that the respondent department vide its letter, dated March, 6, 2007 has written that income tax arrear of Rs.19,48,995 is outstanding against the assessee as a result of order under section 62, dated 24-3-2003 and demand of Rs.455 under section 89, dated 3-6-2004. He has, therefore, contended that it clearly shows that neither the department communicated to the appellant regarding dismissal of the appeals nor it was in the knowledge of the applicant till March, 6, 2007. He has submitted that if the department has communicated that subject recovery proceedings were initiated subsequent to the rejection of appeals by the learned C.I.T. (A), or filed order that appeals stand rejected, then proposition might have been different. The learned counsel has further contended that it is an admitted fact that out of these three appeals, in two appeals, the learned counsel representing the assessee (Ch. Anwar-ul-Haq, Advocate) has not signed power of attorney. Therefore, in relation to the aforesaid appeals, the matter has no legal effect regarding knowledge, if the department's view is admitted that as the said counsel has signed power of attorney having effect of knowledge regarding decision of the learned C.I.T. (A). In the third appeal, the learned counsel representing the assessee (Ch. Anwar-ul-Haq, Advocate) has denied signatures on power of attorney and has contended that this is a forged document having no concern with the assessee. In view of these facts and circumstances of the case, the learned counsel has requested for allowing the condonation of delay applications filed by the assessee. In support of his contentions, the learned counsel has placed reliance on the decision of the Honourable High Court reported as 2005 PTD 2586 (H.C. Kar.), the decision of Full Bench of this Tribunal in a case reported as (2005) 91 Tax 419 (Trib.) and has also placed before us the letter of the assessee company, dated 28-4-2006 to the Taxation Officer requesting to wait till the decision of the appeals, notice under section 83(1)(a) read with section 190 of the Income Tax Ordinance, 2001, dated March, 6, 2007 regarding income tax arrears outstanding under sections 62 and 89, the letter of the assessee to the Taxation Officer, dated February, 2, 2007, letters of the Taxation Officer of the same date i.e. January, 27, 2007 to the assessee company.
On the other hand, representing the department, Rana laved Iqbal has referred the documents and case law already placed before this Bench by Mr. Mahmood Aslam Lillah, DR who has appeared on behalf of the department on the last dates of hearing, which has been prepared showing keen interest of the department in this case, which indicates the following documents:---
(1) Power of attorney authorizing to appear before the learned C.I.T.(A) or C.B.R. for the assessment year 2001-2002 executed by the assessee. It is to note that the learned representative of the assessee has not admitted signatures on this power of authority. In this paper book, power of attorney in favour of the counsel representing the assessee Mr. Ch. Anwaar -ul-Haq, Advocate executed by the assessee regarding appeals for the assessment year 2001-2002. Even otherwise, this power of attorney is without any date.
(2) Grounds of appeal of the assessment year 2001-2002, which according to department has been signed by Ch. Anwaar-ul-Haq, Advocate and he has admitted the same explaining that his authorized advocate has requested to file ground of appeal, as the matter was going to be time-barred and the learned representative representing the assessee was out of station.
(3) Diary sheet showing that Ch. Anwaar-ul-Haq, Advocate has appeared on 8-3-2005 and 22-3.2005 and requested for adjournment of the case. The learned counsel has submitted that he has appeared, as representative of counsel for the assessee and not being the representative of the assessee.
(4) Power of attorney for the Tax Year 2003, which also has date and signature on this power of attorney has also been defined by the learned Counsel.
(5) Notice for hearing of the case issued on 8-12-2004 for appearance on 28-12-2004.
(6) Power of attorney, dated 2-12-2004 executed by the assessee company authorizing to appear before the learned C.I.T. (A) wherein the name of Ch. Anwaar-ul-Haq, Advocate has also been printed along with Mr. Nawaz Khan, FCA. The learned counsel has contended that as he was previously associated with Mr. Nawaz Khan, FCA, so he has used the pro forma, but he has not signed power of attorney.
(7) Grounds of appeal for the assessment year 2001-2002.
(8) Diary sheet showing that Ch. Anwaar-ul-Haq, Advocate has appeared in the proceedings.
(9) Power of attorney for the assessment year 2001-2002.
(10) Form of appeal to the Commissioner (Appeals) for the assessment year 2001-2002.
(11) Power of attorney for the assessment year 2000-2001.
(12) Form of appeal for the assessment year 2000-2001.
(13) Diary sheet showing that Mr. Anwaar-ul-Haq, Advocate has appeared on 8-11-2004 and 5-10-2005.
(14) Order of the learned C.I.T. (A), dated 24-10-2001 showing that in appeals for the assessment years 1999-2000 and 2000-2001, Ch. Anwaar-ul-Haq, Advocate along with Mr. Nawaz Khan, FCA has appeared on 10-10-2001.
(15) Order of this Tribunal dated 25-9-2003 in I.T.A. Nos.3627 and 3628/LB/2000 for the assessment years 1997-98 and 1998-99 in the case of instant assessee showing that Ch. Anwaar-ul-Haq, Advocate has represented the assessee.
(16) Order of this Tribunal, dated 5-12-2003 in the case of the assessee in the cross appeals for the assessment years 1997-98 to 2000-2001 bearing I.T.A. Nos.3429 and 3430/LB/2000 and 5033/LB and 50341LB/2001 filed by the assessee and I.T.As. Nos.3629 and 3630/LB/2000 and I.T.A. Nos.103 and 104/LB/2002 filed by the department showing that, Ch. Anwaar -ul-Haq, Advocate has represented the assessee.
(17) Order of this Tribunal in I.T.As. Nos.2913 and 2914/LB/2001 showing that Ch. Anwaar-ul-Haq, Advocate has 'represented the assessee.
(18) Order of this Tribunal, dated 17-5-2004 in the case of the present assessee in R.As. Nos.28 and 29/LB/2004 for the assessment years 19917-98 and 1998-99 wherein Ch. Anwaar-ul-Haq, Advocate has represented the assessee.
(19) Order of this Tribunal, dated 5-6-2004 in R.As. Nos.259 to 262/LB of 2004 wherein the said Ch. Anwaar-ul-Haq, Advocate has represented the assessee.
(20) Order of the learned C.I.T. (A), dated 20-9-2004 for the Tax Year 2003 where Ch. Anwaar-ul-Haq, Advocate has represented the assessee.
(21) PTR No.57/2005 filed before the Honourable Lahore High Court, Lahore showing that Ch. Anwaar-ul-Haq, Advocate represented the assessee along with order sheet, dated 12-3-2007 indicating that Ch. Anwaar-ul-Haq, Advocate has represented the assessee before Honourable Lahore High Court.
(22) Application for issuance of copy of appellate orders filed before the learned C.I.T. (A), dated 24-7-2007 wherein, it has been submitted that appeals were heard for the year 2005 but the order has not been received by the assessee.
(23) Reply of the above said letter from Office of the C.I.T. (Appeals) informing that above said three appeals have been deciding on 25-8-2005 and the orders in this regard have duly been served upon the authorized representative Ch. Anwaar-ul-Haq, Advocate on 10-10-2005.
(24) Application for issuance of notice, dated 11-4-2007 filed by the assessee before the learned C.I.T. (A).
(25) Receipt of income tax paid by the assessee for the assessment years 1999-2000 to 2001-2002.
(26) Letter of Mr. Nawaz Khan, FCA, dated 20-4-2006 regarding payment of outstanding demand for the assessment years 1998-99 to 2002-2003 requesting to extend date of compliance till April, 28, 2006.
(27) Notice of demand for the assessment year 2000-2001 sent by the Taxation Officer to the assessee.
(28) Letter of the assessee company, dated 20-2-2007 requesting to adjourn recovery proceedings till 28-2-2007.
(29) Notice of demand under section 137(2) for the assessment year 2001-2002 sent by the Taxation Officer on 31-3-2007.
(30) Form of appeal showing authorized representative as Qadeer and Company for the assessment year 2000-2001.
On the basis of these documents, the learned DR representing the department has contended that impugned order of the learned C.I.T.(A) in this case has been duly served upon the authorized representative Ch. Anwaar-ul-Haq, Advocate representing the assessee company, as has been established through power of authority, grounds of appeal before the learned C.I.T. (A), order sheet entries of the learned C.I.T. (A), orders passed by the learned C.I.T. (A) for the previous as well as for the years under review. The learned DR has contended that through the above said evidences, it has been established that Ch. Anwaar-ul-Haq, Advocate remained associated with Messrs Qadeer and Company before as well as after 2003. He has in this respect referred power of attorney for the subsequent years, notice sent to Messrs Qadeer and Company and received by Ch. Anwaar-ul-Haq, Advocate, compliance made by Ch. Anwaar-ul-Haq, Advocate of the notices and the representative in other cases of Messrs Qadeer and Company, out of which some are Accord Textile Ltd., Shah Jewana Textile Ltd. and Able Divesitined Ltd. He has further contended that association of said Ch. Anwaar-ul-Haq, Advocate with M/s Riaz Bottlers Pvt. Ltd. is established as representative before learned C.I.T. (A) on 24-10-2001, 20-9-2004, and 8-3-2005, before this Tribunal on 25-9-2001, 5-11-2003, 8-1-2004, 11-5-2004 and 5-6-2004. It has been contended that association in this regard is also established, as Ch. Anwaar-ul-Haq, Advocate has represented the assessee before Honourable Lahore High Court on 11-4-2005 and 12-3-2007. Regarding the knowledge about the order, it has been contended that on behalf of the assessee company that application before learned C.I.T. (A) has been signed vide order, dated 27-3-2007 which was replied by the learned C.I.T. (A) vide order, dated 9-4-2007 and the assessee company has applied for certified copy on 11-4-2007.
The learned DR has contended that after considering the above said evidences, it is established that Ch. Anwaar-ul-Haq, Advocate on which the impugned order of the learned C.I.T. (A) has been served as representing the assessee and therefore all the three appeals filed by the assessee are barred by time and condonation applications filed iri this regard cannot be allowed. The learned DR in this regard has placed reliance on the decision of Honourable Supreme Court of Pakistan reported as 2007 SCMR 49 wherein it has been held that "Constitutional jurisdiction was always discretionary in character and he who sought equity was to come with clean hands". The learned DR has contended that as the condonation of delay is also the discretion of the Court and it has been established that the assessee in this case has not come with clean hands, but has sought for the condonation of delay, despite the fact that notice had been served upon the person, who is representing the assessee in the instant matter also. The learned DR in this regard has also referred the decision of this Tribunal reported as 2004 PTD 1784 wherein it has been held `that "Service of notice shall be made on the person named in the notice, or his authorized agent". In the present case, the impugned order of the learned C.I.T. (A) has been served upon the representative of the assessee. The learned DR in this respect has also referred the decision of Indian Jurisdiction of the Bombay High Court in the case of Ramnivas Hanumanbux Somani v. Venkataraman, Income Tax Officer, wherein it has, been held that "(vi) When a notice was served otherwise than b lost for exam le through a 'eon or a t rocess server, it need not be served personally on the assessee; it might be served on his accredited agent, and, therefore, service of the notice at the assessee's business premises on an agent exercising authority in respect of income tax matters, though not authorized in writing in that behalf, was a valid service under section 63 of Indian Act". The case decided by the Honourable High Court reported as 1989 PTD 843 has been referred by the learned AR wherein it has been held that notice for the supply of short documents served on the counsel for the petitioner, who has filed return of income, served in this regard will be proper. In another case reported as 2002 PTD 3998 of Hon'ble Supreme Court of Pakistan wherein it has been held that "It is well settled by now that 'where a judgment has not been served to a party, limitation start running from the date of knowledge". In another judgment referred by the learned DR reported as 19 Tax 01, the Honourable Supreme Court of Pakistan has held that "Where no valid reasons for delay in filing appeal have been given, condonation in delay cannot be allowed". Decision of the Honourable High Court reported as 1989 PTD 817 has been referred by the learned DR wherein it has been held that "Where the applicant was unable to give sufficient cause for condonation of delay, application in this regard was dismissed". In another decision of Honourable High Court reported as 2005 PTD 2376, it has been held that "Delay of each day had to be explained". The Honourable Supreme Court of Pakistan in a case reported as PLD 1983 SC 385 has held that "Law as it now stands is that the Courts can show indulgence and condone delay where time has been lost by prosecuting remedy before wrong forum on account of bona fide mistake or error of counsel which reasonable and prudent man despite exercising due diligence and caution might have been committed, wherever the mistake is approaching wrong forum due to gross negligence and carelessness of counsel where not appearing that counsel has shown due diligence and caution before moving wrong forum. The only remedy for client of such counsel to sue him for damages for loss suffered on account of his negligence". In another decision of Honourable Supreme Court of Pakistan referred by the learned DR reported as 2001 SCMR 1429, it has been held that "Where the delay was not satisfactorily explained, the 'petition was dismissed without saying anything about the merits". In another case reported as 2001 SCMR 1822, the Honourable Supreme Court has held that "Limitation creating a right in favour of one of the parties, delay in filing of proceedings could not be condoned rightly unless it was shown that there were sufficient reasons causing delay or the impugned order was coram non judice or was void order for any strong legal reason". The learned DR in this respect has also referred another decision of Indian jurisdiction reported as AIR 1938 Nagpur 156 wherein it has been held that "Court while exercising discretion vested in it will necessarily look into the conduct of the appellant and will only exercise its discretion favour of a person, who is found to be diligent and not in favour of one, who is guilty of laches or negligence till the date when the appeal ought to have been filed".
The learned DR has requested that in this case, on behalf of the assessee, no bona fide reasons have been given for the condonation of delay therefore, all the three applications should have to be dismissed.
We have heard the learned representatives from both the. sides and have also perused the impugned order of the learned C.I.T. (A), the case law referred from both the sides, documents in this regard filed by the, learned DR as well as by the learned counsel for the assessee and affidavit filed by the assessee.
After perusal of the record of the case, we have found that the impugned order deciding the three appeals, one regarding order passed by the Taxation Officer under section 221 for the assessment year 2000-01, while the two for the assessment years 2001-2002 and 2002-2003 which were passed under section 62 of the repealed Ordinance, 1979 and the second was against the order passed under section 205/89 of the Income Tax Ordinance, 2001. We have further found that Ch. Anwaar-ul-Haq, Advocate has represented the assessee/applicant before the learned C.I.T. (A). We have further noted that under subsection (4) of section 132 of the repealed Ordinance, 1979, it has been provided that on disposal of appeal, Appellate Additional Commissioner shall communicate the order passed by him to the appellant and to the Commissioner. Likewise, under subsection (4) of section 129 of the new Income Tax Ordinance, 2001, similar provisions have been mentioned, that as soon as practicable, after deciding the appeal, the Commissioner (Appeals) shall serve his orders on the appellant and the Commissioner. We have noted that in both the Ordinances, the word "shall" has been used regarding service of orders passed by the learned C.I.T. (A) and it has been mentioned that the order will be served upon the appellant and the Commissioner and the word "representative" has not been provided. We are, therefore, of the view that in the present case although, the said Ch. Anwaar-ul-Haq, Advocate had been representing the assessee before learned C.I.T. (A), but the order under the law was to be served upon the appellant, which not includes representative of the appellant. On behalf of the department, it has been contended that order, dated 28-5-2005 was served upon Ch. Anwaar-ul-Haq, Advocate on 10-10-2005 who has admitted through an affidavit that the impugned order was wrongly served in his office and he had afterwards delivered the same to an employee of Messrs Qadeer and Company Mr. Ameen Khan, who neither delivered the same to Mr. Nawaz Khan, FCA nor to the assessee company. It has further been declared in the affidavit by Ch. Anwaar-ul-Haq, Advocate that he remained associated with Mr. Nawaz Khan, FCA of Messrs Qadeer and Company, Chartered Accountants 89-F, Jail Road, Lahore since 2003, but later on has established his own office under the name and style of Messrs Anwaar Law Associates, 4-Umer Plaza, 1 Mozang Road, Lahore. It has been declared that the assessee company has neither appointed him in the aforesaid appeal before the learned C.I.T. (A) nor he has signed any power of attorney in this regard, but as during the period of his association with Messrs Qadeer and Company, printed power of attorney showing the name of Mr. Nawaz Khan, FCA along with him was being used, the confusion has arisen due to that printed power of attorney, which was used in joint venture and was to be signed by both the persons in case they are authorized to represent, otherwise to be signed by the person, who has been authorized by the assessee.
It has been further contended on behalf of the assessee .during his arguments as well through affidavits that in the memorandum of appeal before the learned C.I.T. (A), status of AR has been mentioned as Chartered Accountant and the address in this regard has been given as 89-F, Jail Road, Lahore, whereas the address of the said Advocate Ch. Anwaar-ul-Haq is different. Mr. Anwaar-ul-Haq, Advocate has further admitted in the affidavit that adjournment was sought by him on behalf of Messrs Qadeer and Company on their request. He has further declared in the affidavit that at the time of hearing on 8-3-2005 and 22-3-2005 . before the learned C.I.T. (A), as Mr. Nawaz Khan, FCA was not available, request for adjournment was made. Likewise, appeals have been filed before the learned C.I.T. (A) on the request of said Mr. Nawaz Khan, FCA.
After considering all these facts supported by affidavits, we have found that although three appeals filed by the assessee are barred by time of 489-days, but as on behalf of the assessee, three affidavits have been filed one of Mr. Nawaz Khan, FCA of Messrs Qadeer and Company, second of Ch. Anwaar-ul-Haq, Advocate representing the assessee in the instant applications and third of Mr. Muhammad Hussain, Tax Manager of the assessee company, which cannot be outright rejected without counter affidavits. All of them have solemnly declared and affirmed on oath that the impugned order of the learned C.I.T. (A) has not been served upon the assessee and on behalf of the department, no counter affidavit in this regard has been filed. We find no reason to reject the declaration made through affidavits on oath. Even otherwise, due to clear provisions of law i.e. subsection (4) of section 132 according to which, the impugned order of the learned C.I.T. (A) shall be communicated to the appellant and to the Deputy Commissioner. In the new Ordinance, 2001, under subsection (4) of section 129, it has been mentioned as under:
"As soon as practicable after deciding an appeal, the Commissioner (Appeals) shall serve his order on the appellant and the Commissioner".
But in this case, the department has failed to establish that the order in any manner has been .communicated to the assessee/appellant we have further found that under clause (d) of subsection (2) of section 131:---
"(2) An appeal under subsection (1) shall be;
(a)
(b)
(c)
(d) Preferred to the Appellate Tribunal within sixty days of the date of service of order of the Commissioner (Appeals) on the taxpayer or the Commissioner, as the case may be".
In the repealed Ordinance, under subsection (3) of section 134, it was provided that every appeal under subsection (1) or subsection (2) shall be filed within sixty days of the date on which the impugned order is communicated to the assessee or the Commissioner, as the case may be. In this case, the department has failed to establish, despite detailed evidence furnished in this regard that the impugned order of the learned C.I.T. (A) has been served or communicated to the assessee/applicant.
In view of the facts and circumstances of this case we, therefore, find no reason to disbelieve the version of the assessee; especially due to un-rebutted affidavits. Considering all these facts, we are of the view that the cases referred by the learned DR are not relevant being distinguishable from the instant case.
In view of this position, all the three applications for condonation of delay are allowed and the main appeals are directed to be fixed for hearing after issuing notices to both the parties.
C.M.A./18/Tax (Trib.)Applications allowed.