IFTIKHAR MUHAMMAD CHAUDHRY, CJ. - As in the listed appeals common question requiring interpretation of Section I 56 Of the Income Tax Ordinance, 1.979 (herein after referred to as "the Ordinance") is under examination, therefore, we intend to dispose them of by means of instant judgment. * 2. In view of the precise question involved in this case namely whether Section 56 of the Ordinance does not empower the Assessing Officer to call for return of the income tax for previous assessm ent years, the facts are noted from one of the appeals being No. 991/2002. The respondent Abdul Ghani was provisionally assessed by the Income Tax Department under Section 60-A of the Ordinance and recovered tax from him because he. Had not filed return of the Income Tax, as such notice under Section 56 of the Ordinance was issued for compliance under Section 61 of the Ordinance. Qn this a written declaration of Rs. 24,000/- as income was filed claiming exemption thereon. Similarly, the Wealth Tax statement was also filed, declaring therein a net wealth at Rs.
230,000/- and in the same statement gross wealth was shown as Rs. 8,730,000/ including the liabilities of Rs. 8,500,000/-. During the pendency of the proceedings, details of the liabilities were called from the 7 persons and notices were issued to them under Section 148 of the Ordinance. Out of them two persons appeared before Income Tax Officer and stated that they advanced Rs.
1,300,000/- to the respondent and simultaneously admitting that their yearly incomes were Rs.
20,000/- per annum and they had advanced loan to the assessee directly from their own savings and by collections of amount from their relatives and friends etc. The Income Tax Officer through letter dated 13th June, 1995 confronted the respondent with the explanation offered by those two persons from whom allegedly the amount of Rs. 13,00,000/- was taken by him. In the said letter he was also called upon to furnish explanation failing which, the amount of Rs. 85,0, 000/- would be deemed to be income in "terms of Section 13(1)(aa) of the Ordinance and would be subjected to tax. This letter was also replied but without any plausible explanation, therefore, the Income Tax Officer proceeded to add Rs. 8,500,000/- with the prior approval of I.A.C. Under Section 13(1)(aa) of the Ordinance. Against this order an appeal was filed. Learned C.I.T. (A) vide order dated 23rd November, 1996 disposed;of the appeal. Against this order two appeals were filed by respondent before the Income Tax Appellate Tribunal of Pakistan, Karachi which were disposed of vide order dated 12th January, 1999 in the following terms:- "15. In the light of the above facts and discussion, we are inclined to hold that treatment of the learned ACIT, and the upholding thereof to confirmed to the exigent of remaining amount being income from undisclosed source u/s. 13(1 )(a)(a)."
After passing of this order, respondent submitted an application under Section 156 of the Ordinance before the Appellate Tribunal for rectification of the above order. The application was allowed. Relevant para therefrom is reproduced herein below for convenience:- "7. Accordingly, we recall paragraphs 6 to 15 and part of para 17 of the order In I.T.A. No. 1716/KB of 1996-97 (A.Y. 1991-92), dated 12.1.1999 and substitute the same with the following:- "The Full Bench has further held:-
23. Reverting to the facts of the case instead of issuing notices u/s. 65 of the Ordinance, where previous approval of the I. A.C. Concerned in writing tc do so was mandatory which is missing in the present case, admittedly two notices u/s. 65, one dated 11.5.1989 for assessment years 1961-62, 1963-64,1964-65,1965-66,1967-68,1969-70 ' to 1972-73 and 1974-75 to 1976-77, were issued by the assessing officer requiring the legal representatives of the assessee to furnish their returns of income, In this view of the matter, the proceedings initiated by the assessing officer u/s. 56 of the Ordinance for the assessm ent years under consideration, except for the assessment year 1988-89 are to be treated as coram non judice or he had committed 'an error of jurisdiction while passing a consolidated order u/s. 62 of the Ordinance, be therefore, annual the assessment orders relating to assessm ent years, as mentioned in . The instant para for having been made without lawful authority.
8. On the foregoing facts we find that the impugned order is unsustainable because the proceedings initiated u/s. 56 were ab initio void in law.
9. Accordingly, impugned assessm ent order passed u/s. 62 is hereby annulled."
3. Learned Division Bench of the High Court vide judgment dated 24th October, 2001 dismissed the appeals holding that the Tribunal had rectified its earlier order under Section 156 of the Ordinance in respect of mistake which was apparent on the face of record. Hence, instant appeals by leave of the Court:-
4. Learned counsel appearing for the appellant- department contended that jurisdiction has been conferred upon the Income Tax Authorities including the Appellate Tribunal under Section 156(1) of the Ordinance to amend any order passed by it or to rectify any mistake apparent from the record on its own motion or on such mistake being brought to its notice by any other income tax authority or, by the assessee.
In view of such provision, it is contended that the Tribunal is not bestowed with the jurisdiction to recall its earlier order in the garb of exercise of powers of rectification because the exercise of such powers in such a manner would tantamount to reviewing the earlier order which is not permissible under the law.
5. On the other hand learned counsel appearing for respondent stated that as there was error apparent on the face of record, because notice under Section 56 of the Ordinance can be issued for the current year and if at all the department wants to take action in respect of income escaping assessm ent for the previous assessment years then notice under Section 65 of the Ordinance should have been issued, therefore, as there was a mistake on the face of record, the Tribunal had rightly exercised its jurisdiction.
6. We have heard the learned counsel for the parties at length and have also gone through the record carefully, It may be noted that admittedly before the Commissioner of Income Tax (Appeals) questions of non issuance of the notice under Section 56 of the Ordinance and jurisdiction of the Assessing. Officer were not raised, therefore, the Commissioner of Income Tax upheld the addition of Rs. 8,500,000/-. Similarly when the Income Tax Appellate Tribunal was seized of the matter, the respondent for the first time raised the question of issuance of notice under Section 56 and not under Section 65 of the Ordinance and jurisdiction of Assessing Officer. The above objection was duly considered and examined by the Appellate Tribunal in detail and it was held that though: a notice under Section 65 of the Ordinance was required to be issued in respect of the income escaping assessm ent for the previous assessment years and proceedings for bringing the escaped income for the previous assessment years under the tax regime could not have been initiated under Section 56 of the Ordinance yet such failure would not render the proceedings taken on the basis of notice under Section 56 as illegal, without jurisdiction and void ab initio in view of the fact that by means of notice under Section 56 of the Ordinance the Assessing Officer had disclosed his intention in clear and express terms and had brought it to the notice of. The respondent that he intended to proceed in respect of his income for the previous assessm ent years as in his previous assessment they had escaped the assessment, It was further observed that mentioning of Wrong section would not render a notice as ineffective and illegal and it is the. Subject- matter and substance of the notice which is to be considered for determining th<^ question of provision of law under which action was contemplated, irrespective of the section referred to therein. The discussion relating to the above issues/objection appears on page 19 of the main paper book of Civil Appeal No. 991 of 20O2 (page 3 of the judgment/order of thb Appellate Tribunal dated 12.1.1999) and it will be useful to reproduce the same as under:- "However, para 21 narrated, at page 21 of the judgment supra is also reproduced which contains that form or lending of notice is immaterial, if, otherwise, it fulfills the legal requirement, which is as under:-- "We therefore hold that if the income of the assessee was assessable and the assessing officer had. Proper jurisdiction for making assessment or passing an order of the limitation period is not expired under section 65 of the Ordinance, issuing of wrong form of notice is immaterial and the assessm ent framed and the order passed consequent upon that notice, warrant or other document would not vitiate that assessment order."
In light of the above-mentioned observation quoted from the judgment, we over-ride the objection of the learned A.R. That proceeding against the assessee be void ab initio .For the reasons that issuance of notice under different heading did not cause any prejudice to the assessee."
From a bare perusal of the above paragraphs reproduced from the judgment of the Appellate Tribunal dated 12th January, 1999, it may be noted that the objection with regard to non-issuance of notice under Section 65 of the Ordinance and the jurisdiction of the Assessing Officer to proceed with the assessm ent of income of the respondent for the previous assessment years had been overruled by the Tribunal. Such observation was made by the Tribunal after taking into consideration the facts of the case, the provisions of Sections 56 and 65 of the Ordinance and the view expressed by a Full Bench of the Appellate Tribunal in the case reported in [(1998) 77 Tax 91]. In this context it will be appropriate to refer to the judgment of this Court in the case of Pakistan Fisheries Ltd. v. United Bank Ltd. (PLD 1993 SC 109), wherein this Court pronounced that as long as power to hear and decide a matter vests in a Court, mere reference to a wrong provision of law for invocation of that power would not be a bar to the exercise of that power. Applying this pronouncement to the present case, there can be no doubt with regard to the power of the Assessing Officer to reopen the assessment for the previous assessment years under Section 65 of the Ordinance, if he is satisfied that there has been escapement of assessment. Thus the fact that the Assessing Officer instead of issuing a. Notice under Section 65, issued a notice under Section 56 would neither invalidate the notice issued under Section 56 of the Ordinance nor would render the assessm ents framed in pursuance of such notice as illegal and without jurisdiction. Viewed in the background of above legal and factual position, it is observed that the Tribunal had decided the above issue after application of mind, consciously and giving plausible and satisfactory reasons for the same, It, therefore, cannot be said to be a mistaken or inadvertent finding or an error floating on the face of the judgment so as to be rectifiable under Section 156 of the Ordinance.
Rectification under Section 156 of the Ordinance is permissible if the error, is apparent, obvious and floating on the face of the judgment and can be rectified without long drawn arguments and proceedings for appreciating facts and interpretation or application of any provision of law.
After examining the record and facts, the Tribunal gave its findings that out of the amount of Rs.
8,500,000/- an amount of Rs. 5,900,000/- was income of the assessee from undisclosed source as such concealed income directing it addition to the income of the respondent. Thereafter, the application under Section 156 of the Ordinance was submitted by the respondent before the Tribunal. For rectifying its earlier order.
7. It may be noted that as per the contents of the application, the respondent, while making reference to the earlier order/judgment of the Tribunal, contended that the same was not sustainable and was rightly rectified. As observed above, ho error on the face of the judgment was identified in the order of the Tribunal dated 12th January, 1999, therefore, in absence of any error apparent on the record, with regard to the impugned order/judgment, the Tribunal ought to have refused to exercise jurisdiction under Section 156 of the Ordinance as in exercise of such jurisdiction only a mistake apparent on the record can be rectified but Tribunal in fact had acted as Appellate Forum against its own order, which is not sustainable in law. Learned High Court vide impugned judgment failed to apply the correct law and dismissed the appeal without providing any legal justification, It failed to appreciate that the appellant by filing the application under Section 156 of the Ordinance tried-to circumvent the law by avoiding to file appeal/reference application before the High Court against the earlier order/judgment dated 12th January, 1999. The Learned High Court also lost sight of the fact that the Tribunal under the law could' not sit on its own judgment/order unless an nor apparent or floating on the record could be pointed out; The High Court while holding that no prejudice would be caused and in view of the earlier judgments of the Courts/Tribunals, the assessee was entitled for the benefit had committed grave and serious error/mistake, which cannot be sustained. Therefore, following the doctrine laid down in the case of Commissioner of Income Tax v. National Food Lab. (1992 SCM R 687), Islamuddin v. Income Tax Officer (2000 PTD 306) and Baqar v. Muhammad Rafique (2003 SCM R 1401), we are inclined to hold that the Tribunal had crossed its jurisdiction by rectifying its judgment being free from any error in terms of Section 156 of the Ordinance. If at all the respondents were aggrieved by the order, they could have approached the relevant forum, in accordance with law.
Thus for the foregoing reasons, appeals are allowed with cost and the impugned judgment dated 24th October, 2001 passed by the High Court of Sindh as well as the judgment dated 22nd October, 1999 passed by the Income Tax Appellate Tribunal are set aside.