COMMISSIONER OF INCOME TAX, PESHAWAR VS PAKISTAN ELECTRIC FITTINGS MANUFACTURING COMPANY LIMITED, 2016 PTD-SUPREME-COURT 1999 (2016)

(On appeal from the judgment of the High Court of Sindh, at Karachi, dated 3-1-2000 passed in ITA No.158 of 1998)

Income Tax Ordinance (XXXI of 1979) [since repealed]---

----Ss. 136 & 137---Constitution of Pakistan, Art. 185(3)---Judgment of .High Court---Scope---Tax authority impugning judgment of High Court by filing 'petition for leave to appeal' before the Supreme Court instead of an `appeal'(under S. 137 of the Income Tax Ordinance, 1979)-7 Maintainability---Contention of tax payer was that under .S. 137 of the Income Tax 'Ordinance, 1979, an 'appeal' had to be filed before the Supreme Court against the judgment of the High Court delivered under S.136 of the said Ordinance, whereas the tax authority in the present case filed a 'petition for leave' to appeal before the Supreme Court---Contention of tax authority that since the High Court had entertained an appeal against the order of the Tribunal, when only a reference was maintainable, thus the judgment of the High Court could not be treated as having been delivered in a reference filed under S. 136 of the Income Tax Ordinance, 1979; and in such circumstances a petition for leave to appeal was maintainable-Validity-Whether the High Court was possessed with powers or not to entertain the appeal under S. 136 of the Income Tax Ordinance, 1979, the impugned order in the present case was passed under that provision of law and thus appeal under S. 137 of the said Ordinance and not a petition for leave to appeal was maintainable-Even otherwise time limitation for filing the appeal was 30 days while petition for leave to appeal impugning judgment of High Court was filed, with a delay of about 2 months-Petition for leave to appeal was thus barred by time even if treated as an appeal.

Akhtar Ali Mehmood, Advocate Supreme Court and Raja Abdul Ghafoor, Advocate-on-Record for Appellants.

Abdul Qadir Khan, Advocate Supreme Court for Respondent. Sohail Mahmood, DAG on Court's Notice.

Date of hearing: 20th January, 2015.

JUDGMENT

NASIR-UL-MULK, C.J.---Since this appeal is being decided on the preliminary objection raised on behalf of the respondent the questions of law involved need not be reiterated and addressed. It is sufficient to state that the appellant, Commissioner of Income Tax, Karachi had filed petition for leave to appeal impugning the judgment of the High Court of Sindh in Income Tax Appeal No.158 of 1998 allowing the appeal of the respondent/assessee thereby setting aside the order of the Income Tax Appellate Tribunal and that of the lower forums. Leave to appeal was granted on 7.07.2000. The appeal was accepted on 27.04.2006; relevant paragraphs of the judgment which narrates facts briefly are reproduced:--

"2. Precisely stating the facts of the case are that the assessee/respondent declared his income in the annual return for the year 1997-98 in which income tax was levied in terms of section 2(12) of the Income Tax Ordinance, 1979 (hereinafter referred to as the "Ordinance"). The order of assessment was challenged by the respondent in appeal but could not succeed within the hierarchy of Income Tax Ordinance, as second appeal filed by respondent was dismissed on 5th May 1996. No Reference against and subjected the same to tax. The order of assessment was challenged by the respondent by way of first appeal, which failed, compelling him to approach Income Tax Appellate Tribunal (hereinafter referred to as the "Tribunal" by way of second appeal, which was also dismissed on 5th may 1996. No Reference against it was filed in terms of section 136 of the Ordinance. Subsequent thereto assessee filed an application for setting aside the judgment of the Tribunal under Rule 22 of the Income Tax Appellate Tribunal Rules (hereinafter referred to as "the Rules") which was dismissed by the Tribunal vide order dated 20th May, 1997. Respondent instead of seeking remedy against 'this order before the proper forum moved another application for rectification of the order dated 5th May, 1996 in pursuance of section 156 of the Repealed Ordinance which was rejected on 14th March, 1998. Finding no redress before the Income Tax Authorities as well as the Tribunal respondent preferred Income Tax Appeal No.158 of 1998 before the learned High Court of Sindh.

3. The appellant objected to the maintainability of the appeal on the bar of limitation but the High Court vide impugned judgment converted the appeal into a writ petition and allowed the same. As such instant appeal has been filed."

2. The operative part of the judgment is incorporated in paragraphs 6 and 7 which read:--

"6. For the foregoing reasons we are of the opinion that the learned High Court should not have converted the time barred appeal into a constitution petition for the purpose of considering the case of the respondent on merits as the impugned judgment/order had attained finality much before filing of the appeal before the High Court.

7. Thus for the foregoing reasons the appeal is allowed and the impugned judgment of the High Court is set aside with no order as to costs."

3. A Review Petition (CRP No.310/2006) was filed which was allowed on the ground that contrary to the reference in the judgment under review that the High Court had converted time barred appeal into .Writ Petition and allowed the same the Court had actually decided, the appeal and thus there was error apparent on the face of record. Consequently the judgment of 27.04.2006 was recalled and the appeal (C.A. No.761 /2000) was ordered to be deemed pending. The appeal therefore came up for hearing today.

4. The learned counsel for the respondent raised a preliminary objection that since under section 137 of the Income Tax Ordinance, 1979 (hereinafter to be referred to as the "Ordinance"), appeal lies to the Supreme Court against the judgment of the High Court delivered under section 136 of the Ordinance, petition for leave to appeal filed by the appellants was not maintainable. The learned counsel for the appellant made attempts to justify filing of the petition contending that since the High Court could not have entertained the appeal, as only Reference maintainable against the order of the Tribunal, the judgment of the High Court cannot be treated as having been delivered in a Reference filed under section 136 of the Ordinance. This argument is without merits. Whether the High Court was possessed with powers or not to entertain the appeal under section 136 of the Ordinance the impugned order was passed under that provision of law and thus appeal under section 137 of the Ordinance and not petition for leave to appeal was maintainable. The time limitation for filing the appeal is 30- days while the petition for leave to appeal was filed on 06.03.2000 impugning the order 'of the High Court dated 03.01.2000. Therefore, it would be barred by time even if treated as an appeal. The appeal is, therefore, dismissed.

MWA/C-7/SCAppeal dismissed.