NASIM SlKANDAR, J.- ln this further appeal under Section 136 of the late Income Tax Ordinance, 1979 the Commissioner of Income Tax/Wealth Tax, Faisalabad Zone, Faisalabad claims that following questions of law arise out of the impugned order of the Tribunal dated 2.8.1997:--
(1) "Whether on the facts and in the circumstances of the case, the learned Tribunal was justified to declare the department's appeal filed without any legal authority and competency?
(2) "Whether under the facts and circumstances of the case, the learned Tribunal was justified to dismiss the appeal of the department summarily without going into the merits of the case?"
2. The assessee/respondent is an individual and at the relevant time was engaged in manufacturing and sale of crown caps. For the assessment year 1992-93 as against revised net loss of Rs. 20,26,891/-, an assessm ent was framed on 26.7.1995 at total income of Rs. 36,91,872/-. In the process the Assessing Officer estimated the sale at Rs.1,75,0, 000/- and subjected them to a gross profit rate of 25%. Also an addition of Rs. 27,00,000/- was made under Section 13(1)(aa) of the late Income Tax Ordinance, 1979.
3. The appeal filed by the assessee was partly allowed by CIT (Appeals) Zone-I, Faisalabad on 30.1.1996 inasmuch as the Assessing Officer was directed to increase the sale by the ratio of increase in GP rate which was also directed to be reduced from 20% to 18%. The departmental appeal filed before the Tribunal was disposed of in the following manners:-- "The respondent, an individual derives income from manufacture and sale of crown caps. The perusal of the record shows that the assessment order was made by the ACIT/W. Tax whereas the appeal has been filed by the IAC. The filing of appeal not by the Assessing Officer (IAC) is an appeal which is incompetently filed. Reference is made to (1996) 73 Tax 202 (Trib) F.B. The first two grounds of appeal are not tenable at law and the last two grounds are argumentative, therefore, the appeal is dismissed having been filed without any legal authority. As well as in-competently."
Hence this further appeal.
4. Heard the learned counsel for the parties. According to the Revenue the learned Tribunal failed to take into consideration that the assessment for the year under review was finalized by the Assistant Commissioner of Income Tax and Wealth Tax, Circle 26, Faisalabad which was subsequently assigned to IAC, Income Tax/Wealth Tax, Range-I, Companies Zone, Faisalabad vide Regional Commissioner, Income. Tax/Wealth Tax, Central Region, Multan's letter dated 506, dated 7.10.1995. Further that appeal filed by the assessee was disposed of by Commissioner of Income Tax (Appeals) on 30.1.1996 while during this period the jurisdiction over the case vested in IAC, Range-I, Companies Zone, Faisalabad who had filed appeal before the Income Tax Appellate Tribunal in his capacity as the Assessing Officer having jurisdiction over the case under Section 5(1)
(c) of the Income Tax Ordinance, 1979. Therefore, according to the Revenue, the learned Tribunal misdirected itself by holding that the appeal was incompetent.
5. As to the second part of the order of the Tribunal again the learned counsel for the Revenue assails the same on the ratio of two judgments of this Court recorded in re: Messrs Pakistan Industrial Gases Limited v. Commissioner of Income Tax and another (2000 PTD 2903) and re: The Commissioner of Income Tax v. Muhammad Tariq Javed (2000 PTD 2165). Reliance is also placed upon a judgment of this Court in re: Commissioner of Income Tax, Faisalabad Zone, Faisalabad v.
Sheikh Rashid Ahmed (2001 PTD 2316). Ln all these judgments the departmental appeals against the order of the Income Tax Appellate Tribunal were allowed where the Tribunal had dismissed their appeals on account of the alleged violation of Income Tax Appellate Tribunal Rules, 1981.
6. After hearing the learned counsel for the parties, we are persuaded to agree that the revenue having not been confronted with the alleged competency of the petition as also the compliance with the rules of the Tribunals, it has not been treated fairly by the Tribunal. In case the learned Members of the Tribunal were of the view that the appeal was not competent or that it had failed to come up to comply with any of their rules in view of the ratio settled in the aforesaid judgments of his Court, the revenue was entitled to a notice on the aforesaid facts and it was only on the failure of the Revenue to establish the competency of the appeal or to amend the memo, of appeal bringing it in accordance with the Rules of the Tribunal that an adverse presumption or a direction against it could possibly be made. Lt has been the consistent view of this Court that in case of violation of any Rule of the Tribunal the party concerned be it assessee or the revenue must be allowed an opportunity to rectify/amend the discrepancy/deficiency and in case of the office objection is not removed, the matter may be placed before the Bench for appropriate orders.
7. That being so this appeal is partly allowed and the impugned order of the Tribunal dated 2.8.1997 recorded in a departmental appeal, (ITA No. 2158/LB/96), assessment year 1992-93) in re: Inspecting ACI/W. Tax, Faisalabad v. M/s. Ghousia Metal Closures, Faisalabad, is set aside. The appeal before the Tribunal shall be deemed pending to be decided after hearing both the parties and if need be allowing the revenue to establish the competency of the appeal as also to amend the memo, of appeal to bring it in accordance with the Rules of the Tribunal.