Commissioner of Income Tax/Wealth Tax, Companies Zone Faisalabad, has sought reference on the following questions 6f law said to have arisen out of order dated 18.4.1995, passed by the Income tax Appellate Tribunal, Lahore in I.T.A. No. 377/LBI/1989-90 (Assessment Year 1988-89):-
(i) "Whether under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal was justified in rejecting the departmental appeal for non-compliance of Income Tax Appellate Tribunals Rules 11 in the presence of the fact that the original order subjected to appeal was available in the assessm ent record and the assessee/respondent has not challenged the authenticity of the copies annexed with the appeal".
(ii) "Whether under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal was justified in rejecting the departmental appeal without providing an opportunity to make up the deficiency, if any, observed/found by the Income Tax Appellate Tribunal."
2. Facts necessary to answer the afore-noted reference are that Assessee a private limited company, feeling aggrieved by order in original dated 23.2.1989, filed the appeal before the Commissioner of Income tax (Appeals) Faisalabad, who reduced the sales from Rs. 1,02,00,000/- to Rs. 50,00,000/-, whereas G.P. Rate applied at 5% and add backs out of Profit & Loss Account were confirmed, vide order dated 5.7.1989. The department filed the second appeal before the learned Tribunal, who, after finding that certified copy of the impugned order has not been submitted and no explanation for non-compliance with Rule 11 of Income Tax Appellate Tribunal Rules, 1981 (Rules), has been rendered, proceeded to dismiss department's appeal, vide order dated 18.4.1995. The department filed reference application before the learned Tribunal but the same was dismissed on 24.9.1997, hence the present reference, under section 136(2) of the Income Tax Ordinance, 1979.
3. We have heard the learned counsel and examined the available record.
4. Since both the questions of law are interconnected, therefore, we propose to answer the same jointly. Rule 11 of Income Tax Appellate Tribunal Rules 1981 (Rules), inter alia, provides that every memorandum of appeal shall be accompanied by a certified copy of the order appealed against.
Sub-rule (3) of the said rule envisages that the Tribunal may, in its discretion, accept a memorandum of appeal, which is not accompanied by all or, any of the documents referred to in this rule, It appears appropriate to reproduce Rule 11(3) of the Rules, which reads as Fellows:- "Rule 11 (3). The tribunal may, in its discretion, accept a memorandum of appeal which is not accompanied by all or any of the documents referred to in this rule."
It flows from the above that the discretion has been conferred upon the Tribunal, either to accept or reject a memorandum of appeal, which is not "accompanied by all or, any of the documents referred to in this rule, In the instant case, the learned Tribunal in its discretion, after finding that certified copy of the order is not annexed with the memorandum of appeal, proceeded to reject the memorandum. Of appeal, In view of the afore-noted Rule 11(3) of Rules, it lies within the discretion of the Tribunal either to accept or reject a memorandum of appeal, which was filed without the documents, as mentioned in Rule 11(1). We find that the learned Tribunal has exercised its. Discretion in accordance with the recognized principles regarding exercise of discretion and it has not been exercised arbitrarily or in a fanciful manner, It is settled law that the discretionary orders, passed by subordinate Courts are not to be interfered with by the superior Courts unless those are found arbitrary and fanciful. Reference can be made to Shahzada Muhammad Umar Beg v. Sultan Mahmud Khan and another (PLD 1970 SC 139).
5. In view of the above findings, we are of the view that in case any of the document to be filed with the memorandum of appeal, under Rule 11(1) of the Rules, is not filed by any of the parties, it is within discretion of the learned Tribunal either to accept or reject the memorandum of appeal within those documents including the certified copies order appealed against.
6. References are answered.