PAKISTAN TOBACCO COMPANY LTD., ISLAMABAD VS ADDITIONAL COMMISSIONER (UNIT-II), TAXATION OFFICER, LARGE TAX PAYERS UNIT, ISLAMABAD, 2013 PTD-ISLAMABAD 747 (2012)

(a) Income Tax Ordinance (XLIX of 2001)---

----S. 122(5A)---Assessment order, amendment of---Powers of Commissioner---Scope---Assessment order, before its amendment, must be found by Commissioner to be erroneous and prejudicial to interest of revenue---Such findings could not be made by Commissioner without application of his mind.

(b) Income Tax Ordinance (XLIX of 2001)---

----Ss. 122(5A)(9), 210 & 211---Constitution of Pakistan, Art. 199---Constitutional petition---Issuance of show cause notice by Additional Commissioner for amendment of assessment order---Petitioner's plea was that powers contained in S. 122(5A) of Income Tax Ordinance, 2001 for being power of revision could be exercised by authority having passed original order, but not by his delegatee---Validity---Powers of Commissioner to amend assessment orders as contained in S. 122(5A) were not treated as power of revision by Ordinanceitself---Exercise of such powers might be in nature of powers being exercised in revision, but same would not make S. 122(5A) as section relating to revision---Ordinary consequences of revision would not apply to an order passed by Commissioner under S. 122(5A)---Powers available to Commissioner under S. 122(5A) could be delegated to Additional Commissioner, thus, in such case functions available to Commissioner i.e. to provide an opportunity of hearing to taxpayer, scrutiny of assessment, proper application of mind and amendment of assessment order, would also stand delegated to Additional Commissioner---High Court repelled such plea in circumstances.

2003 PTD 734; 2009 PTR 23; 2001 PTD 1467 and 2006 PTD 734 ref.

(c) Interpretation of statutes---

----Non-availability of a provision in statute---Effect---Such provision could not be inserted in statute by implication or interpretation of law.

(d) Revision---

----Revisional powers, exercise of---Scope---Authority having passed original order could not exercise such powers ordinarily.

(e) Income Tax Ordinance (XLIX of 2001)---

----Ss. 122(5A), 210 & 211---Constitution of Pakistan, Art. 199---Constitutional petition---Issuance of show cause notice by Additional Commissioner for amendment of assessment order---Petitioner's objections was that assessment order passed by Assessing Officer was time barred; and that his income had not Been properly and legally assessed---Validity---Such objections would not render impugned show-cause notice as without jurisdiction---Petitioner had alternate remedy and could raise such objections before Income Ta Authorities---High Court dismissed constitutional petition in circumstances.

Messrs Amin Textile Mills (Pvt.) Ltd. v. Commissioner of Income Tax and 2 others 2000 SCMR 201; Shagufta Begum v. The Income Tax Officer, Circle-XI, Zone-B, Lahore (1989) 60 Tax 83 (H.C. Kar.) = 1989 PTD 544 and Hafiz Muhammad Asrif Dar v. Income Tax Officer PLD 1989 SC 109 rel.

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JUDGMENT

RIAZ AHMAD KHAN, J.---This judgment is directed to dispose of instant writ petition along with following petitions:--

(i)Writ Petition No. 2413 of 2009, re: Pakistan Tobacco Company Limited, Islamabad v. Addl. Commissioner (Unit-II) Taxation Officer, Large Taxpayers Unit, Islamabad;

(ii)Writ Petition No. 2414 of 2009, re: Pakistan Tobacco Company Limited, Islamabad v. Addl. Commissioner (Unit-II) Taxation Officer, Large Taxpayers Unit, Islamabad;

(iii)Writ Petition No. 2415 of 2009, re: Pakistan Tobacco Company Limited, Islamabad v. Addl. Commissioner (Unit-II) Taxation Officer, Large Taxpayers Unit, Islamabad;

(iv)Writ Petition No. 2416 of 2009, re: Pakistan Tobacco Company Limited, Islamabad v. Addl. Commissioner (Unit-II) Taxation Officer, Large Taxpayers Unit, Islamabad;

(v)Writ Petition No. 660 of 2011, re: Pakistan Telecommunication Company Ltd. Islamabad v. Addl. Commissioner Inland Revenue (Audit-I), Large Taxpayers Unit, Islamabad and another;

(vi)Writ Petition No. 1231 of 2011, re: Pakistan Mobile Communication Ltd. Islamabad v. Addl. Commissioner Inland Revenue (Audit-II), Large Taxpayers Unit, Islamabad and another;

(vii)Writ Petition No. 1232 of 2011, re: Pakistan Mobile Communication Ltd. Islamabad v. Addl. Commissioner Inland Revenue (Audit-II), Large Taxpayers Unit, Islamabad and another;

(viii) Writ Petition No. 1287 of 2011, re: Messrs Pak Telecom Mobile Ltd. Islamabad v. Federal Board of Revenue through its Chairman and 2-others;

(ix)Writ Petition No. 1288 of 2011, re: Messrs Pak Telecom Mobile Ltd. Islamabad v. Federal Board of Revenue through its Chairman and 2 others;

(x)W.PNo. 1349 of 2011, re: MessrsLink Direct International (Pvt.) Ltd. Islamabad v. Addl. Commissioner, Inland Revenue (Audit-II), Large Taxpayer Unit, Islamabad and another;

(xi)Writ Petition No. 1550 of 2011, re: Messrs Link Direct International (Pvt.) Ltd. Islamabad v. Addl. Commissioner, Inland Revenue (Audit-I), Large Taxpayer Unit, Islamabad and another;

(xii)Writ Petition No. 1703 of 2011, re: Messrs Pakistan Mobile Communication Ltd. Islamabad v. Commissioner Inland Revenue (Audit), Large Tax Payers Unit, Islamabad and another; and

(xiii) W.PNo. 3302 of 2011, re: Messrs Link Direct International (Pvt.) Ltd. Islamabad v. Addl. Commissioner, Inland Revenue (Audit-II), Large Taxpayer Unit, Islamabad and another;

(xiv) Writ Petition No. 3382 of 2011, re: M/s Pakistan Mobile Communication Ltd. Islamabad v. Addl. Commissioner, Inland Revenue (Audit-II), Large Taxpayers Unit, Islamabad and another;

(xv)Writ Petition No. 102 of 2012, re: MessrsTelenor Pakistan (Pvt.) Ltd. Islamabad v. Federation of Pakistan through M/O Finance, Islamabad and 3 others;

(xvi) Writ PetitionNo. 103 of 2012, re: Messrs Telenor LDI Communication (Pvt.) Ltd. Islamabad v. Federation of Pakistan through M/O Finance, Islamabad and 3 others;

(xvii) Writ PetitionNo. 138 of 2012, re: PTCL, Islamabad v. Addl. Commissioner, Inland Revenue (Audit-I), Large Taxpayers Unit, Islamabad and another;

(xviii) Writ PetitionNo. 750 of 2012, re: MessrsMND Exploration and Production Ltd. Islamabad v. Federation of Pakistan through the Secretary Revenue Division M/O Finance and 3 others.

2.The petitioners, in all the petitions, were issued Show Cause Notices by the Addl. Commissioner, Taxation Officer, Large Taxpayers Unit, Islamabad; the said Show Cause Notices were issued under section 122(9) read with section 122(5A) of the Income Tax Ordinance, 2001. According to the petitioners, they had filed `returns' under section 120 of the Income Tax Ordinance, 2001. The returns filed by them were to be taken as Assessment Orders issued by the Commissioner of Income Tax.

3.Grievance of the petitioners is that since under section 120 of the Ordinance, the Assessment Orders were to be passed by the Commissioner of Income Tax; so, the Addl. Commissioner had no authority to issue Show Cause Notices for amendment of the Assessment Orders, passed by the Commissioner. Hence, all these petitions challenging Show Cause Notices were filed before this Court.

4.Sirdar Ahmad Jamal Sukhera Advocate, for the petitioners (In Writ Petitions Nos. 2412, 2413, 2414, 2415, 2416 of 2009 and660 of 2011 138 of 2012) submitted that under section120 of the Income Tax Ordinance, 2001 the returns submitted by the taxpayers shall be taken as Assessment Orders issued by the Commissioner; so, even the Commissioner Income Tax has no power to amend his own order. The learned counsel, relying on the case law, reported as 2003 PTD 734, 2009 PTR 23 (Supreme Court of Pakistan) and 2001 PTD 1467 submitted that the powers of amendment as provided under section 122(5A) of the Income Tax Ordinance, 2001 is a power of revision and the power of revision cannot be exercised by the same authority, who has passed the original order. Since, section 122(5A) empowers the Commissioner to revise his own order, therefore, the same is violative of Article 10 of the Constitution of the Islamic Republic of Pakistan as the same is against due process of law. The learned counsel further submitted that section 210 of the Income Tax Ordinance, 2001 has been amended by the Finance Act, 2002 and provides that the Commissioner may delegate all or any of his powers or functions to any Officer of Inland Revenue subordinate to the Commissioner; subsection (1A) of section 210 ibid, provides that the Commissioner shall not delegate the powers of amendment of assessment, to any Officer below the rank of Addl. Commissioner. According to the learned counsel, since the powers of amendment have been provided in section 122(5A), which involves application of mind, scrutiny of record, appreciation of fact & law and an opportunity to hear the taxpayer; so, these functions cannot be delegated to any other person/officer. The learned counsel further submitted that if it is presumed that the Commissioner could amend the Assessment Orders, even then delegation of powers to the Addl. Commissioner was illegal; furthermore, under section 210(1A) ibid the Commissioner can delegate his powers of amendment to Addl. Commissioner, but cannot delegate his functions to the Addl. Commissioner; so, it would be an absurd idea that the functions are to be performed by the Commissioner and powers are to be exercised by the Addl. Commissioner. The learned counsel also submitted that under section 122(5A) of the Income Tax Ordinance, 2001 the powers of amendment vested with the Commissioner are on the basis of his personal examination and consideration; so, even then such powers cannot be delegated further.

5.Mr. Nasim Sikandar Advocate, for petitioners (In Writ Petitions Nos. 1287 and 1288) submitted that in the Income Tax Ordinance, 2001 pivotal role has been assigned to the Commissioner Income Tax; whereas, prior to the Income Tax Ordinance, 2001 the situation was totally different; he submitted that the Commissioner Income Tax has been given all the powers. He prayed that he should be permitted to amend the petition, so as to enable him to challenge vires of the Ordinance. He, however, also adopted arguments advanced by Sirdar Ahmed Jamal Sukhera Advocate. Other learned counsel for the petitioners also adopted the aforementioned arguments.

6.On the other hand, learned counsel for the respondents submitted that the writ petitions are not maintainable, as only Show Cause Notices have been issued and the petitioners have got alternate remedy of placing their case before the Income Tax Authorities. It was further submitted that the law itself provides that the Commissioner can amend assessment order and can also delegate his authorities to Addl. Commissioner for amending assessment order, deemed to be passed by the Commissioner. So, there is no illegality in Show Cause Notices, issued to the petitioners.

7.I have heard learned counsel for the parties and have also perused the record.

8.The first objection of learned counsel for the petitioners is that the Commissioner of Income Tax cannot amend his own assessment orders. In this respect, section 120 of the Income Tax Ordinance, 2001 is relevant; its relevant portion is reproduced hereinbelow:--

"120.(1)(a)-----------------------

(b)the returns shall be taken for the purposes of this Ordinance to be an assessment order issued to the taxpayer by the Commissioner on the day the return was furnished".

The above said section of law is deeming provision and by fiction of law converts the returns filed by the taxpayers into assessment orders. Subsection (5A) of section 122 ibid empowers the Commissioner to amend or further amend an assessment order and the said provision is as follows:--

"122. [(5A). Subject to subsection (9), the Commissioner may amend, or further amend, an assessment order, if he considers that the assessment order is erroneous in so far it is prejudicial to the interest of revenue.] "

Admitted position in the present case is that the Commissioner before amending his own order has to make up his mind that the assessment order is erroneous and prejudicial to the interest of revenue. The Commissioner cannot reach this conclusion without' analyzing the facts available on the record and without conscious application of his mind.

9.The objection that the powers to scrutinize the record and application of mind as provided in subsection (5A) of section 122 ibid is a power of revision and this power cannot be exercised by the authority, who has passed the original order, is not correct. There is no doubt that in 2006 PTD 734, it was held that the powers contained in 122(5A) ibid is a power of revision. However, this fact should be kept in view that the Income Tax Ordinance, 2001 by itself does not treat this power as revision. The power or revision is not available in the Income Tax Ordinance, 2001. The exercise of powers may be in the nature of powers being exercised in revision, but that would not make section 122(5A) ibid, a, section relating to revision. If in the statute, a provision is not available, then by implication or even by interpretation of law, the same cannot be inserted in the statute. It can be said that powers under section 122(5A) ibid are to be exercised as if the Commissioner is revising his own order, but the ordinary consequences attached to (revision would not apply to an order passed under section 122(5A) ibid; ordinarily revisional powers cannot be exercised by the authority, who has passed the original order; but, this provision would not apply to an order under section 122(5A) ibid, because Income Tax Ordinance, 2001 does not treat it as revision. Since, the provision by itself is simple and clear, therefore, ordinary meaning is to be given to section 122(5A) and there is no requirement to give it different meanings by way of interpretation and reference to other Judgments. It is therefore, held that under section 122(5A) the Commissioner had the authority to amend the Assessment Orders.

10.As far as delegation of powers is concerned, subsection (1) and (1A) of section 210 ibid, being relevant are reproduced herein:--

"201. Delegation.---(1) The Commissioner [Subject to subsection (IA),] may, by an order in writing, delegate to any [Officer of* Inland Revenue, subordinate to the Commissioner] all or any of the powers or functions conferred upon or assigned to the Commissioner under this Ordinance, other than the power of delegation.

(1A) The Commissioner shall not delegate the powers of amendment of assessment contained in subsection (5A) of section 122 to [an officer of Inland Revenue below the rank of Additional Commissioner Inland Revenue.] "

Subsection (1 A) of section 210, is to be read with section 122(5A) of the Ordinance. The power of amendment is provided in section 122(5A) and this section does not bifurcate the power of amendment into powers and functions. The exercise of this power is only subject to section 122(9) and it has been provided in subsection (5A) as well as in section 210(1A) ibid. Section 210. (1A) provides that the Commissioner can delegate his powers of amendment as provided in subsection (5A) of section 122, to Additional Commissioner and since subsection 5(A) provides that the powers of amendments can be exercised only subject to subsection (9); so, the functions of the Commissioner Income Tax, to provide an opportunity of hearing to the taxpayers also stands delegated to the Addl. Commissioner.

11.The objection that the commissioner cannot delegate his authority to his subordinate again is not correct for the reason that section 211 of the Income Tax Ordinance, 2001 provides that the powers exercised by the Addl. Commissioner shall be deemed to be exercised by the commissioner. As such by a deeming clause, the law provides that the order of Addl. Commissioner shall be considered as passed by the commissioner. The conclusion thus I would be that when commissioner delegates powers to amend the assessment to the Addl. commissioner; the said powers include the functions of the commissioner i.e. scrutiny of the assessment, proper application of mind and then amending the Assessment Order.

12.As far as the objection regarding maintainability is concerned, the issue stands settled by the Hon'ble Supreme Court of Pakistan, in case titled Commissioner of Income Tax v. Messrs Eli Lilly Pakistan (Pvt.) Limited, reported as (2009) 100 Tax 81 (S.C.Pak.)=2009 SCMR 1279, wherein it was held that the tendency to bypass the remedy provided in the relevant statute and to press into service constitutional jurisdiction of the High Court was to be discouraged, 'though in certain cases invoking of such jurisdiction instead of availing the statutory remedy was justified e.g. when the impugned order/action was pulpably without jurisdiction and/or mala fide.

13.Since, the petitioners in the present case had challenged vires of law, which could not be raised before the Commissioner Income Tax; so, these writ petitions were maintainable.

14.As far as prayer regarding amendment is concerned, the learned counsel had referred to the aforementioned section i.e. 122(5A) and 210 of the Income Tax Ordinance, 2001 and these sections of law have already been discussed in the judgment and any further amendment would not serve no useful purpose. Accordingly, the CMs for amending the petitions are dismissed.

15.In Writ Petition No. 1288 of 2011 re: Messrs Pak Telecom Mobile I Limited, Islamabad v. Federal Board of Revenue, through its Chairman, Islamabad and 2 others, learned counsel for the petitioner raised objection that Assessment Order passed by the Assessing Officer was time barred. Furthermore, the income of the petitioner was not properly assessed by the Assessing Officer and the assessment made was not in accordance with law. These points raised by the petitioner, would not render the Show Cause Notice as without jurisdiction and in addition to that these points can be agitated before the Income Tax Authorities. The petitioner has got alternate remedy and in presence of alternate remedy, writ cannot be issued. In case re: Messrs Amin Textile Mills (Pvt.) Ltd. v. Commissioner of Income Tax and 2 others, reported as 2000 SCMR 201, it was held that Assessee in the first instance was to approach the hierarchy of the forums provided for under the Income Tax Ordinance, 1979, instead of filing a Constitutional petition challenging the order of Income Tax Officer. Tendency to bypass the remedy provided under the relevant statute and to press into service Constitutional jurisdiction of the High Court was deprecated. In case titled Shagufta Begum v. The Income Tax Officer, Circle-XI, Zone-B, Lahore, reported as (1989) 60 Tax 83 (H.C. Kar.)=1989 PTD 544 (Supreme Court of Pakistan], it was held that questions raised in petition were not such which could not have been dealt with/commented upon by the Income Tax Officer in a proper regular hearing on the purported assumption of the jurisdiction under section 65 of the Income Tax Ordinance, 1979, therefore, departmental remedy being speedier, it was in the interest of litigants themselves first to choose the speedier remedy with the departmental authorities. Similarly, in case titled Hafiz Muhammad Arif Dar v. Income Tax Officer, reported as PLD 1989 SC 109, it was held that where a remedy by way of appeal was available, no relief could be granted to the petitioner under Article 199 of Constitution of the Islamic Republic of Pakistan, 1973. The petitioner has got alternate remedy, where the points raised in the petition can be agitated; so, the petition is not maintainable.

16. In view of the aforementioned findings, all the writ petitions are dismissed.

SAK/61/IslPetitions dismissed.