The Lahore Bench of the Income Tax Appellate Tribunal has framed the following question for our consideration and reply:- Whether on the facts and in the circumstances of the case, the Tribunal was legally justified in upholding the action of the imposition of penalty under Section 111 of the Income Tax Ordinance, 1979 especially when it refused to believe the evidence in respect of Agricultural Peal Estate held by the late grand-mother of the petitioner?
2. Learned counsel for the revenue by relying upon a reported judgment of a Division Bench of the Karachi High Court in re: Dada Bhai H. Mama & Sons, Karachi v. Commissioner of Income Tax (1967)
16-Tax 43) states that in absence of assessee at whose instance the aforesaid question was referred, no opinion can be expressed by this Court.
3. In the said judgment their Lordships interpreted the provisions of Section 66(5) of the Income Tax Act, 1922 which are similar to Section 136 of the Income Tax Ordinance under which the aforesaid question has been referred to us. In the view of their Lordships the obligation of the High Court to decide the questions of law referred to it was contingent upon the hearing of the case. Further that the hearing of the case could not be made unless the party, at whose instance the questions had been referred to the Court, was present and had argued its case. Therefore, their Lordships found that they were not bound to answer the questions referred to it if the party, at whose instance the questions had been referred, had remained absent. Reference in that respect was made to a decision of the Calcutta High Court in re: M.M. Isphani Ltd. v. Commissioner of Excess Profits Tax West Bengal (1955) 27 ITR 188).
4. Being in respectful agreement with their Lordships in absence of the assessee, at whose instance the above question has been referred, we will decline to answer and dispose of the reference accordingly.