SAHIB JEE VS REGIONAL COMMISSIONER OF INCOME TAX, 2009 PTD-LAHORE-HIGH-COURT-LAHORE 955 (2009)

(a) Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)---

----S. 32---President, while performing his function under S.32 of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000, acts in quasi judicial and not in administrative capacity---Scope of such function of the President----Section 32 of the Ordinance provides that aggrieved party, by recommendation of the Federal Tax Ombudsman may, within 30 days of the recommendation, make representation to the President who may pass such order thereon as he may deem fit---Recording of reasons while setting aside the recommendations of Ombudsman is minimum requirement under the law which is in consonance with the principles of natural justice---Representation under S.32 of the Ordinance can be made against the recommendations and not against the order on review application--.Principles.

Commissioner of Income Tax and others v. Messrs Media Network and others 2006 PTD 2502; Federation of Pakistan through Secretary Education, Islamabad v. Prof. Dr. Anwar and 2 others 2006 SCMR 382; Commissioner of Income Tax, Faisalabad Zone, Faisalabad and another v. Akhlaq Cloth House, Faisalabad and another 2008 PTD 965; Hafiz Muhammad Arif Dar v. Income Tax Officer PLD 1989 SC 109; Federation of Pakistan through Secretary, Establishment Division, Government of Pakistan, Islamabad v. Muhammad Tariq Peerzada and 2 others 1999 SCMR 2744; Federation of Pakistan through Secretary, Establishment Division, Government of Pakistan, Islamabad v. Muhammad Tariq Peerzada and 2 others 1999 SCMR 2189 and Case No.1743 of 2001 of Specialty Printers (Pvt.) Ltd. ref.

(b) Administration of justice---

----Similarly placed persons in similar circumstances have to be treated and dealt with identically without any discrimination unless there be any differentiation.

Nizamuddin and another v. Civil Aviation Authority and 2 others 1999 SCMR 467; Shrin Munir and others v. Government of Punjab through Secretary Health, Lahore and another PLD 1990 SC 295 and Aman Ullah Khan and others v. The Federation Government of Pakistan, through Secretary, Ministry of Finance, Islamabad and others PLD 1990 SC 1092 ref.

(c) Administration of justice---

----Judicial notice---Scope---Court can take judicial notice of the changed situation/circumstances of the case which have taken place after the institution of the case and can mould relief accordingly.

Mst. Amina Begum and others v. Mehar Ghulam Dastagir PLD 1978 SC 220; Federation of Pakistan through Secretary, Ministry of Law, Justice and Parliamentary Affairs, Islamabad and others v. Aftab Ahmad Khan Sherpao and others PLD 1992 SC 723 and Prof. (Retd.) Masoodul Hassan v. Muhammad Iqbal PLD 1998 Lah. 177 ref.

Siraj-ud-Din Khalid for Petitioner.

Shahid Jamil Khan, Legal Advisor for Income Tax Department.

Aamir Rehman, Deputy Attorney-General for Pakistan for Respondent.

Date of hearing: 13th March, 2009.

JUDGMENT

RAJA MUHAMMAD SHAFQAT KHAN ABBASI, J.---Through this writ petition, the petitioner has assailed order, dated 9-6-2005 passed by the President of Islamic Republic of Pakistan under section 32 of Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000 (hereinafter called as "F.T.O. Ordinance, 2000") against the recommendation of the Federal Tax Ombudsman (F.T.O.), dated 26-11-2002 and order, dated 26-1-2004 on a review application filed by respondent No.1/Regional Commissioner of Income Tax, Lahore.

2. Precise facts of the case are that the petitioner who is in the business of readymade garments, filed Income Tax Return for the year, 2001-2002 on 1-10-2001 and declared income of Rs.1,503,204 under the Self-Assessment Scheme.

3. The petitioner filed Complaint No.786-L of 2002 under section 11 of F.T.O., Ordinance, 2000 on 28-6-2002 before respondent No.4/Federal Tax Ombudsman, Islamabad against action of respondent No. 1 qua selecting the case for total audit under para. 9(a)(ii) of Circular No.4 of 2001 (Income Tax) alleging maladministration. The complaint of the petitioner was accepted by the respondent No.4/Federal Tax Ombudsman, Islamabad on 26-11-2002 with the recommendations that "the preconditions for a selection order by the R-CIT, inter alia, include suppression of income, evidence of revenue potential of the case, clear evidence of decline in income, creation of new assets not covered by the declared income and disparity in expenses on utilities. As none of the conditions/factors were found in complainant's return of income, there was no valid reason or justification for the R-CIT to select the case for Total Audit. This infirmity has rendered his decision arbitrary, unreasonable and illegal." It is further recommended that "return be accepted under Self-Assessment Scheme and compliance reported within 30 days of the receipt of this Order."

Respondent No.5/Revenue Division filed Review Application No.74 of 2003 under section 14(8) of the F.T.O. Ordinance, 2000 against the recommendation of F.T.O., dated 26-11-2002. The same was rejected on 26-1-2004 by respondent No.4/F.T.O. Respondent No.6/ Federation filed representation under section 32 of F.T.O. Ordinance, 2000 against findings of the F.T.O., dated 26-11-2002 on Compliant No.786-L/2002, and order, dated 26-1-2004 on Review Application No.74 of 2003. The petitioner took objection of limitation as well as maintainability of the representation in his reply/comments before the President of Islamic Republic of Pakistan.

However, the representation of respondent No.6/Federation of Pakistan was accepted on 9-6-2005 by the President whereby recommendation of F.T.O., dated 264-2004 in Review No.74 of 2003 (in Complaint No.786 of 2002) was set aside.

4. The learned counsel for the petitioner contends that if a person is aggrieved by recommendation of F.T.O., he can file representation within 30 days of the recommendation whereas in the present case, representation was filed on 27-2-2004 which was hopelessly time-barred as the same was filed after lapse of more than 15 months. He further submits that against the recommendations of Federal Tax Ombudsman, dated 26-11-2002, review application under section 14(8) of Federal Tax Ombudsman Ordinance, 2000 was dismissed on 26-1-2004. He further submits that right of representation is available under section 32 of the Ordinance only against the recommendations of the Federal Tax Ombudsman and not against any order passed by him on review application, therefore, the impugned order, dated 9-6-2005 passed by the President of Islamic Republic of Pakistan is without jurisdiction. He further submits. that the impugned order indicates that the same has been passed in the name and on behalf of the President of Islamic Republic of Pakistan by a Section Officer (Rana Qamar Sultan) who is not the competent authority to pass such an order. He further submits that the petitioner was not personally heard. Further states that F.T.O. Ordinance, 2000 was promulgated by the President of Islamic Republic of Pakistan, therefore, personal hearing under section 32 of the F.T.O. Ordinance, 2000, should have been given.

Conversely the learned counsel for the respondents submits that the order passed by the President is legal and correct. The petitioner was given hearing in the form of written reply/comments to the representation which are available on the file as Annex-D which was sufficient hearing. He further submitted that as per scheme of law, it was not possible for the President to provide personal oral hearing to each of the party. Regarding limitation issue, he states that limitation will be reckoned from the date when reasons for non-compliance are rejected by the Ombudsman. He further states that the review application was dismissed on 26-1-2004 which was dispatched to the parties on 30-1-2004, therefore, representation was filed on 27-2-2004 within time. He further states that the review is provided under section 14(8) of the F.T.O. Ordinance, 2000; although no time limit is provided under the F.T.O. Ordinance for filing review. He further states that the Hon'ble Supreme Court has finally decided the question involved in the present lis regarding Self-Assessment Scheme under sections 4-A, 59(3) and 59(1-A) of Income Tax Ordinance (XXXI of 1979) in a case reported as Commissioner of Income Tax and others v. Messrs Media Network and others (2006 PTD 2502), therefore, if the impugned order is set aside even then the petitioner will not get benefit of the order of the F.T.O.

5. The contentions of the learned counsel have been considered and record perused.

6. Contention of learned counsel for the petitioner regarding non-hearing by the President himself, has no force. It is not possible for the President to give opportunity of personal hearing in each case. President being head of the State has to discharge numerous functions. The petitioner had filed comments/reply to the representation which is sufficient compliance of law as held in Federation of Pakistan through Secretary Education, Islamabad v. Prof. Dr. Anwar and 2 others (2006 SCMR 382) and Commissioner of Income Tax, Faisalabad Zone, Faisalabad and another v. Akhlaq Cloth House, Faisalabad and another (2008 PTD 965) (ibid).

7. The President, while performing his function under section 32 of the Ordinance acts in quasi judicial and not in administrative capacity. Reliance is placed on Hafiz Muhammad Aril Dar v. Income Tax Officer (PLD 1989 SC 109) and Federation of Pakistan through Secretary, Establishment Division, Government of Pakistan, Islamabad v. Muhammad Tariq Peerzada and 2 others (1999 SCMR 2744). Recording of reasons while setting aside the recommendations of Ombudsman is minimum requirement under the law which is in consonance with the principles of natural justice. Reliance is placed on Federation of Pakistan through Secretary, Establishment Division, Government of Pakistan, Islamabad v. Muhammad Tariq Peerzada and 2 others (1999 SCMR 2189).

8. There is consensus that issues of like nature were considered by a learned Division Bench of this Court comprising one of us (Sayed Zahid Hussain, C.J.) in ICA No.296 of 2004 and the judgment rendered therein is reported as Commissioner of Income Tax, Faisalabad Zone, Faisalabad and another v. Akhlaq Cloth House, Faisalabad and another (2008 PTD 965). The operative part of the judgment is as follows:--

"In view of the preceding discussion, it follows that all such cases where the person/party concerned had notice/opportunity of filing comments/reply to the representation, the decision of the President cannot be annulled simply for the reason that personal/oral hearing was not afforded. But where the person/party concerned had no notice/opportunity of filing comments or reply and decision was made without affording such opportunity, the representation need to be considered and decided after notice and affording an opportunity of filing reply/comments to the same."

9. Right of representation has been given to the aggrieved person against the recommendation of F.T.O. under Article 32 of the Ordinance, 2000. Although power of review has been given to the Ombudsman under Article 14(8) of the Ordinance, 2000. Neither the period of limitation for filing review is provided nor any further remedy against the rejection of review has been provided under the Ordinance, 2000, hence the President or the Court cannot fix or prescribe any period of limitation. In the present case, the representationist assailed the order, dated 26-11-2002 of the F.T.O. through representation under section 32 of the F.T.O. Ordinance, 2000 on 27-2-2004 after a delay of about fifteen months whereas limitation for filing of representation under Article 32 of the Ordinance, 2000 is provided as 30 days. The representationist had not challenged the final order, dated 26-11-2002 within the prescribed time. The same had, thus, attained finality. Therefore, the representation before the President was liable to rejection. The legislature has not provided any remedy against the rejection of review. Intention of the legislature is that if any different recommendations were made in review than the original one then the aggrieved party will have right to file representation within 30 days. Against the order of rejection of review, no further remedy has been provided under the Ordinance, 2000. Thus, the right of representation was not available to the Revenue Division under Article 32 of the Ordinance, 2000 against the order on review application. The representation made on 27-2-2004 against recommendation, dated 26-11-2002 was time-barred whereas against order, dated 26-1-2004 passed on review, no representation was maintainable. Revenue Division had wrongly challenged both orders through single representation which were liable to be rejected. Finding of the President that where law provides for review, limitation for further remedy shall be reckoned from the date when review is decided, cannot be sustained on the ground that if period of limitation is not provided under law, the President can neither grant such time nor provide under the Ordinance, 2000. In the identical issue, the same view was taken by the President in Case No.1743 of 2001 of Specialty Printers (Pvt.) Ltd., in which the President had rejected the recommendations on the ground of being time barred and representation can only be made against the recommendations and not against the order of review. The relevant view of the President is as under: --

"Section 32 of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000 provides that the Revenue Division or any person aggrieved by the recommendation of the Federal Tax Ombudsman may, within 30 days of the recommendation, make representation to the President who may pass such order thereon as he may deem fit. The Federal Tax Ombudsman made his recommendation on February 28, 2002. The agency instead of making representation against the FTO's recommendation made a review application to the FTO. The review application was rejected on June 26, 2002. This representation has been made against the FTO's order of June 26, 2002 rejecting the review application. Under section 32 ibid representation can be made against the recommendations and not against the order on review application. This representation made on July 23, 2002 against the recommendation of February, 28, 2002 is time barred. Accordingly, the President has been pleased to reject the representation of Revenue Division as time-barred".

It is established principle of law that similar placed person in similar circumstances has to be treated and dealt with identically without any discrimination unless there be any differentiation. The case of the present petitioner was to be dealt with accordingly as of the above cited case (Case No.1743 of 2001). Reliance is placed on Nizamuddin and another v. Civil Aviation Authority and 2 others (1999 SCMR 467), Shrin Munir and others v. Government of Punjab through Secretary Health, Lahore and another (PLD 1990 SC 295) and Aman Ullah Khan and others v. The Federation Government of Pakistan, through Secretary, Ministry of Finance, Islamabad and others (PLD 1990 SC 1092).

10. Copy of the representation is available on the file which indicates that during the pendency of the complaint before F.T.O., Assessing Officer finalized the assessment proceedings under section 62 of the Income Tax Ordinance. The petitioner had availed the remedy of appeal against assessment order, dated 30-10-2002. It is also established principle of law that Court can take judicial notice of the changed situation/circumstances of the case which have taken place after the institution of the case and can mould the relief accordingly. Reliance is placed on Mst. Amina Begum and others v. Mehar Ghulam Dastgir (PLD 1978 SC 220), Federation of Pakistan through Secretary, Ministry of Law, Justice and Parliamentary Affairs, Islamabad and others v. Aftab Ahmad Khan Sherpao and others (PLD 1992 SC 723) and Prof. (Retd.) Masoodul Hassan v. Muhammad Iqbal (PLD 1998 Lahore 177). However, we are not called upon to dilate on this aspect of the matter any further as the order which was assailed before us was of respondent No.6 passed on the representation under section 32 of the Ordinance.

In view of the above discussion, we declare order of respondent No.6, dated 9-6-2005 as of no legal effect and disposed of the writ petition with no order as to costs.

'M.B.A./5-60/LOrder accordingly.