COMMISSIONER INLAND REVENUE, ZONE-II, RTO-II VS G.M. FISHERS (PVT.) LTD., KARACHI, 2016 PTD-KARACHI-HIGH-COURT-SINDH 185 (2015)

Income Tax Ordinance (XLIX of 2001)---

----Ss. 124(2) & 133---Completion of proceedings---Time frame--- Authorities were aggrieved of direction issued by Appellate Tribunal to appellate authority for completing proceedings within sixty days---Plea raised by authorities was that Income Tax Appellate Tribunal could not reduce time frame as provided under S. 124(2) of Income Tax Ordinance, 2001---Validity---Reference to S. 124(2) of Income Tax Ordinance, 2001, by authorities was misconceived, as it provided a maximum time limit to taxation officer to pass an order after remand by Appellate Tribunal, High Court or Supreme Court and the same could not be treated as minimum time period to pass such order after remand---No error or illegality was found in the order passed by Appellate Tribunal, whereby matter had been remanded to concerned taxation officer with certain directions to decide case preferably within a period of sixty days---Reference was disposed of accordingly.

S. Irshadur Rehman for Applicant.

ORDER

Through instant reference application, the following questions, which, according to the learned counsel for the applicant, are the questions of law arising from the impugned judgment dated 7.4.2014 passed by the Appellate Tribunal, Inland Revenue, in I.T.A. No. 89/KB/2012 (Tax Year 2009), have been proposed:--

"(a) Whether on the facts and in the circumstances of the case the learned Appellate Tribunal Inland Revenue was justified to direct the department to complete set aside proceedings within sixty days of the receipt of appellate order?

(b) Whether on the facts and in the circumstances of the case the directions of learned ATIR to complete proceedings within 60 days is not in contradiction of the provisions of section 124(2) of the Income Tax Ordinance, 2001?"

2. Learned counsel for the applicant, after having read out the order passed by the Appellate Tribunal submits that the Appellate Tribunal was not justified to curtail the period as provided under sub-section (2) of section 124 of the Income Tax Ordinance, 2001 for deciding a case after remand from one year to sixty days. It has been prayed that the impugned order may be set aside and the questions proposed may be answered in favour of the applicant.

3. We have heard the learned counsel for the applicant, perused the impugned order passed by the Appellate Tribunal as well as the provisions of sections 124(2) and 132(3) of the Income Tax Ordinance, 2001.

A perusal of the record shows that on being aggrieved by an order passed by the Commissioner (Appeal-II), Inland Revenue, Karachi, an appeal was filed by the taxpayer before the Appellate Tribunal, Inland Revenue, which was allowed in the following terms:--

"10. Accordingly we deemed it necessary to remand back the matter to the officer concerned with the directions to obtain books of accounts, bank statement and all necessary documentary evidences for each and every head of account to determine the admissibility of all P & L expenses as per section 21 of the Income Tax Ordinance, 2001 in its letter and spirit. Similarly addition under section 111(1)(c) on account of electricity expenses at Rs.7,15,980/-, shall also be examined as per law. It is strictly directed that every effort should be made to engage the taxpayer by passing a speaking order within 60 days of the receipt of this order."

4. From perusal of hereinabove order it is noted that the appeal was allowed by setting aside the order passed by the taxation officer of Audit Division and the matter has been remanded back to the concerned officer with directions to obtain books of accounts and other necessary details and after providing an opportunity of being heard, to pass speaking order by making all efforts to decide the same within a period of 60 days of the receipt of the order. It will be advantageous to examine the provisions of subsection (3) of section 132 of the Income Tax Ordinance, 2001 which read as under:--

"132. Disposal of appeals by the Appellate Tribunal.-

(1) Not relevant .

(2) Not relevant .

(3) Where the appeal relates to an assessment order, the Appellate Tribunal may make an order to -

(a) affirm, modify or annul the assessment order; or

(b) omitted

(c) remand the case to the Commissioner or the Commissioner (Appeals) for making such enquiry or taking such action as the Tribunal may direct."

5. From the perusal of hereinabove provisions of subsection (3) of section 132 of the Income Tax Ordinance, 2001, it has been noted that the Appellate Tribunal, Inland Revenue, is authorized to pass an order to affirm, modify or annul the assessment order or to remand the case to the Commissioner or Commissioner (Appeals) for making such inquiry or taking such action as the Tribunal may direct. Whereas, there is no restriction imposed by law upon the Appellate Tribunal to remand the case by directing the taxation officer to decide the matter afresh after providing opportunity of being heard to the concerned party within a stipulated period of time.

We are unable to understand as to how the applicant department has felt aggrieved by the impugned order passed by the Appellate Tribunal in the instant case, whereby, the appeal filed by the Commissioner Inland Revenue has been allowed by setting aside the order of the Commissioner (Appeals) in the instant case and the matter has been remanded back to the concerned officer to decide the same afresh after providing opportunity of being heard within a period of 60 days.

6. Since the learned counsel for the applicant has placed reliance on subsection (2) of section 124 of the Income Tax Ordinance, 2001, to argue that the Appellate Tribunal was not justified in fixing time limit of 60 days for passing of the fresh order, it would be advantageous to examine the provisions of subsection (2) of section 124 of the Income Tax Ordinance, 2001, which read as under:--

124. Assessment giving effect to an order.-

(1) Not relevant ..

(2) Where, by an order made under Part III of this Chapter by the Appellate Tribunal, High Court, or Supreme Court, an assessment order is set aside wholly or partly and the Commissioner or Commissioner (Appeals), as the case may be, is directed to pass a new assessment order, the Commissioner or Commissioner (Appeals), as the case may be, shall pass the new order within one year from the end of the financial year in which the Commissioner or Commissioner (Appeals), as the case may be, is served with the order.

7. Perusal of hereinabove provisions reflects that reference to subsection (2) of section 124 of the Income Tax Ordinance, 2001 by the learned counsel is also misconceived, as it merely provides a maximum time limit to the taxation officer to pass an order after remand by the Appellate Tribunal, High Court or the Hon'ble Supreme Court of Pakistan and the same cannot be treated as the minimum time period to pass such order after remand.

Accordingly, we do not find any error or illegality in the impugned order passed by the Appellate Tribunal, whereby, the matter has been remanded to the concerned taxation officer with certain directions to decide the case preferably within a period of 60 days.

In view of the above, we answer question (a) is affirmative and question (b) in negative both against the applicant.

Instant reference application is disposed of in the above terms.

MH/C-6/SindhOrder accordingly.