FAISALABAD TEXTILE CORPORATION (PVT.) LTD. through Chief Executive VS INSPECTING ADDITIONAL COMMISSIONER OF INCOME TAX, WEALTH TAX COMPANIES RANGE-IV, FAISALABAD, 2008 PTD-LAHORE-HIGH-COURT-LAHORE 925 (1999)

(a) Income Tax Ordinance (XXXI of 1979)---

----Ss. 63, 80-CC, 134 & 156---Constitution of Pakistan (1973), Art.199---Constitutional petition---Export income assessed under S.63 of Income Tax Ordinance, 1979 instead of S.80-CC thereof---Dismissal of appeals by Appellate Authority and Tribunal filed against order-in -original---Dismissal of rectification application by Tribunal for non-filing of export documents by assessee to claim assessment under S.80-CC of Income "Tax Ordinance, 1979---Validity---Plea raised and argued by assessee before Tribunal was that export income was covered by S.80 of Income Tax Ordinance, 1979, which could not be assessed under S.63 thereof---Order-in-original indicated that photocopies of relevant export documents were produced before Assessing Officer---Assessee had raised such plea, but Tribunal, while rejecting appeal, had not attended to or decided same---Order of Tribunal in appeal did not indicate that such plea was turned down on alleged plea of non-filing of export record by assessee---Tribunal, while deciding rectification application, had not considered such main grievance of assessee---Assessee did point out an error on the face of record, but Tribunal had proceeded to dismiss rectification application mechanically---Disposal of rectification application in such manner could not be treated to be lawful decision thereof---High Court set aside impugned order and directed 'Tribunal to decide rectification application after considering such plea raised by assessee.

(b) Administration of justice---

----No person can be given chance to derive benefit from his own mis deeds.

Shahbaz Butt for Petitioner.

Mian Subah Sadiq Klasson for Respondent.

Date of hearing: 2nd April, 1999.

JUDGMENT

SYED NAJAM-UL-HASSAN KAZMI, J.---Petitioner, in this constitutional petition, has challenged order of Income Tax Appellate Tribunal, Lahore Bench, Lahore, which was passed on an application, moved under section 156 of the Income Tax Ordinance, 1979.

2. Petitioner-Company claimed to be exporter of textile products. Additionally, petitioner earns rental income. Returns for the assessment years 1993-94 and 1994-95 were filed to declare the income from export and property. Assessments were completed by respondent No.1, in terms of the section 63 of Income Tax Ordinance, 1979 vide order, dated 20-3-1996 and income for both years was determined at Rs.2,75,000.

3. Petitioner went in appeal under section 129 of the Income Tax Ordinance, which, was decided by respondent No.1 on 23-11-1996 affirming the order, dated 20-3-1996. The two orders were further assailed in appeal before Income Tax Appellate Tribunal (respondent No.3), in terms of section 134 of Income Tax Ordinance, 1979, which too was dismissed on 2-6-1996. Petitioner then moved an application under section 156 of the Ordinance, for rectification of error appearing on the record, which application was declined by the Tribunal, vide order, dated 10-10-1998.

4. Learned counsel for the petitioner submitted that the petitioner raised three grounds before the Tribunal and also before Commissioner, viz. (i) the assessment was wrongly made under section 63, (ii) the export income covered under section 8000 should have been assessed as a separate block of income whereas export income was wrongly assessed under sections 62/63 and, (iii) the Assessing Officer could assess only rental income. Learned counsel pointed out that though the petitioner had specifically mentioned that the export income was covered under section 8000 and should have been assessed as a separate block of income, yet the export income was wrongly assessed in the terms of section 63 and since the orders were without jurisdiction and the error was apparent on the face of record, therefore, it was a fit case for interference under section 156 of the Income Tax Ordinance. It was contended with vehemence that the Tribunal mechanically disposed of the application under section 156 of the Ordinance and except reproducing the order, earlier passed, no good ground was given for the refusing indulgence in the matter.

5. Learned counsel for the respondents has also been heard. Although in the beginning, it was argued that the appeal would lie against the impugned order but on being pointed out that no appeal would be competent' against the order passed on miscellaneous application under section 156 of the Ordinance refusing interference, learned counsel did not seriously support this objection. He, however, submitted that the decision of merit was perfectly justified.

6. On going through the order, under challenge, it is observed that the Tribunal did not seriously look into the real grievance, voiced by the petitioner and instead, skipped away from the issue, on extreme erroneous assumptions and extraneous considerations. After reproduction of the operative part of the order earlier passed, the application was declined, with the observation that the assessee had not filed relevant documents to claim assessment under section 80 CC and that there was no material on the record in support of the contention, raised. It was ignored that one of the grounds, urged at the time of appeal and at the time of pressing the application under section 156 of the Ordinance was that the export income covered under section 80 CC should have been assessed as a separate block of income and that the export income was wrongly assessed under sections 62/63 of the Ordinance. Assessment order does indicate that photocopies of invoices for the years 1993-94 and 1994-95 were produced before the Assessing Authority and in the assessment order, this fact was taken note of that the assessee-Company was engaged in the business of export. So much so, the details, given in para 1 of the order, are indicative of the fact that export sales including export rebate were taken note of. Similarly, order of Commissioner (Appeals) also makes mention of the ground that export income covered under section 8000 should have been assessed as a separate block of income. Same is the position with the initial order, passed in appeal by the Tribunal, which indicates that this point was raised but was not attended to by the Tribunal. Despite the fact that in the opening part of the order, this point was reproduced in ground 2 urged before the Tribunal, yet no reason whatsoever was given for, either ignoring it or repelling it. Instead, in paragraph 5 of the order, the only observation was that the record was considered and that a person cannot be given a chance to derive benefit from his own misdeeds. Petitioner does not controvert the proposition that no person can be given the chance to derive benefit from his own misdeeds but the objection is that the export income should be assessed, as separate block of income and it was not at all attended to or decided while rejecting the appeal. The order of the Tribunal in appeal does not indicate that the ground was turned down, on the alleged plea of non-filing of any record. Unfortunately while deciding the application under section 156 of the Income Tax Ordinance, the Tribunal did not give any serious consideration to the main grievance of the petitioner. Under section 156 of the Ordinance, any income tax authority or appellants Tribunal can amend any order passed by it, to rectify any mistake evident from the record on its own motion or any mistake being brought to its notices by any other Income Tax Authority or by the assessee. The only restriction is that no order under sub-section (1) of section 156 of the Ordinance, having effect of enhancing assessment of reducing a refund or otherwise increasing the liability of assessee shall be passed unless the parties affected have been given reasonable opportunity of hearing. It is, thus, obvious that the Tribunal has the authority to rectify the order if any mistake on the record is pointed out.

7. In this case, the assessee did not point out, an error on the face of record but the Tribunal, being oblivious of the facts noted supra, proceeded to dismiss the application, mechanically. The disposal of the application, in the manner as done in this case, cannot be treated to be lawful decision of the application.

8. Resultantly, this petition is allowed, the impugned order, rejecting the application under section 156 of Income Tax Ordinance is set aside, with the result that the said application shall be deemed to be pending before the Tribunal, which shall be decided afresh, on its own merit and in accordance with law, after taking into consideration, the facts noted herein above and also the ground raised by the petitioner.

S.A.K./F-42/LCase remanded.