MR. JUSTICE MIAN SAQIB NISAR.-(1). This order will dispose of P.T.R. Nos. 102 of 2004 to 104 of 2004 as common questions of law and facts are involved in these P.T.Rs.
2. This P.T.R. Has been filed by Commissioner of Income Tax, Companies Zone-I, Lahore, through which following question of law has been proposed for the consideration of this Court:- "Whether on the facts and in the circumstances of the case, finalization of assessment ex parte on 30-5-1996 is tenable in law".
3. Brief facts are that the Metal Forming Private Limited, present respondent is a limited company and is assessed in Circle 10, Companies Zone-I, Lahore. The said respondent filed its return and claimed exemption under clause 118-E of Part-1 of the Second Schedule which was disallowed by the Assessing Officer. The rejection of the claim of exemption is based upon the observation that old machinery was used by the said undertaking which was against the legal requirements to qualify for exemption. However, since the decision was ex parte under section 63, the same was challenged inter alia on the ground that the date on which the order was announced was not the date of hearing as for the said date no notice under section 61 was issued. The appeal filed before the Commissioner of Income Tax(Appeals) Zone-I, Lahore, was rejected vide order, dated 29-6- 1998 and the disallowance of claim of exemption and action under section 63 were confirmed.
4. Before the Income Tax Appellate Tribunal the order was ultimately finalized on 10-11-2001. There was a difference of opinion between the two members. However, after appointment of the referee member, the majority view is that the ex parte action taken on 30-5-1996 is unlawful and consequently order under section 63 has been cancelled.
5. The department filed reference application before Income Tax Appellate Tribunal, wherein, the proposed question of law was considered as unfit for reference to this Court. However, another question of law was drafted and proposed for the consideration of this Court. The said proposed question which has been referred by the Income Tax Appellate Tribunal reads as follows:- "Whether in the facts and circumstances of the case, finalization of assessment ex parte on 30-05- 1996 is tenable in law."
6. The learned Legal Advisor now contends that since the department was not satisfied with the question proposed, this reference has directly been filed under the provision of section 136(2).
7. Even after a careful study of the two questions, one proposed by the Income Tax Appellate Tribunal and the other by the Commissioner of Income Tax directly under section 136(2), there appears no difference except for mild change in words. This minor change in words has no effect on the essence. The meaning and the effect of both remains the same.
8. Even otherwise, after a question has been proposed by the Income Tax Appellate Tribunal directly, there is no legal sanction behind filing another reference application. The precondition to file a reference under the aforementioned provision is refusal to refer the question by the Tribunal which is apparent in section 136(2) of the Income Tax Ordinance, 1979. The same reads as follow:- "Section 136(2) " "if, on an application made under sub-section (1) the Appellate Tribunal refuses to state the case on the ground that no question of law arises, the assessee or the Commissioner, as the case may be, may within one hundred and twenty days from the date on which he is served with notice of the refusal, apply to the High Court and the High Court may, if it is not satisfied with die correctness of the decision of the Appellate Tribunal, frame a question of law and the provision of sub-section (5), (6) (7) and (8) shall, so far as may be, apply as they apply to reference made under sub-section (1)."
9. In the present case, the Income Tax Appellate Tribunal has not refused to send the case. It has rather approved that a question of law does arise, however, not the one proposed by the Department. The department of Income Tax has still opted to file another reference which on the face of it is misconceived. In fact after refusal by the Income Tax Appellate Tribunal, the aggrieved party may apply to this Court (High Court) and this Court may if it is not satisfied with the correctness of the order of Income Tax Appellate Tribunal, frame a question of law. This means after rejection by the Income Tax Appellate Tribunal, an appellant may apply and propose but the question is to be framed by this Court (High Court). Moreover, it is well settled that this Court (High Court) cam besides refusing may also reframe some other question if it is so convinced. Reference can be placed on the judgments reported as (2002 PCTLR 882); "CTT v.
Muhammad Arshad" and (1944 Income Tea Reports 393); "Seth Gurmukh Singh and another v.
Commissioner of Income Tax, Punjab ". The result is obvious. The P.T.Rs. Are held to be as infructuous, hence, dismissed.