ORDER SYED MUHAMMAD FAROOQ SHAH, JUDICIAL MEMBER - The captioned appeal has been preferred by the taxpayer/appellant against the order passed by the learned CIR(Appeals-ll), Karachi, on dated 29.10.2010, whereby the learned CIR(A) without discussing the merits and de- merits of the case, dismissed the appeal in limine, merely on the ground that an appeal does not lie u/s. 127 of Income Tax Ordinance, 2001 against an order passed by the Taxation Officer u/s. 122(e) of Income Tax Ordinance, 2001.
2. To ascertain the legal and factual position of the case, I have heard Haji Yusuf Rehmatullah, Advocate representing the appellant and Mr. Rajabuddin, the learned DR. The law available on the subject have also been examined.
3. Section 127 of the Income Tax Ordinance, 2001 provides filing of appeal before the Commissioner (Appeals) in the following words:--- "127. Appeal to the Commissioner (Appeals).-' (1) Any person dissatisfied with any order passed by a Commissioner or a taxation officer under Section 121, 122, 143, 144, 162, 170, 182, or 205, or an order under sub-section (1) of Section 161 holding a person to be personally liable to pay an amount of tax, or an order under clause (f) of sub-section (3) of Section 172 declaring a person to be the representative of a non-resident person or an order giving effect to any finding or directions in any order made under this Part by the Commissioner (Appeals), Appellate Tribunal, High Court or Supreme Court or an order under Section 221 refusing to rectify the mistake, either in full or In part, as claimed by the taxpayer or an order having the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the person, may prefer an appeal to the Commissioner (Appeals) against the order."
4. A bare reading of the afore-mentioned provision of law provides that if an order giving effect to any findings or directions to any order made by the Taxation Officer and the taxpayer is not satisfied with the order passed, the taxpayer may again contest such order before the learned Commissioner (Appeals). The taxpayer/department are having legal substantive right to contest the legal issues before the appellate fora, even no tax liability is involved in the order passed by the Taxation Officer. In this context FBR's Circular No. 03 of 2009, dated 17.07.2009 may conveniently be referred. The provisional assessm ent u/s. 122 is appealable as Section 127 is completely silent about non-fileability of appeal u/s. 122(c). While arguing legal aspects of the case, the learned AR for the taxpayer/appellant argued that one a Section is made appealable at large, it covers all the sub- sections unless a particular and specific sub-section is specifically barred. Moreso, it is argued that the taxpayer has not been served with a show-cause notice, hence principle of natural justice has been utterly violated and disregarded. It is argued that order passed- by the Taxation Officer is 'Coram non judice' as the jurisdiction of the Assistant Commissioner stand finish with issuance of notice u/s. 114(4) and all the subsequent formalities towards assessment shifted to Audit Division.' hence order u/s. 122(c) by the Assistant Commissioner is totally illegal, rather it fall within the jurisdiction of Audit Division. On the other side, while rebutting the contentions raised by the learned AR, the learned DR contended that Section 127 of the Income Tax-Ordinance, 2001 does not provides filing of appeal against an order u/s. 122(c) of the Income Tax Ordinance, 2001. It has been held in AIR 1960 S.C. 122, AIR 1960 S.C. 47, AIR 1962 S.C. 1553 & AIR 1987 S.C. 849 that construction of a Section is to be made of all the parts together and not of one part only by itself and phrases are to be construed according to the rules of grammar.
5. The statute does not withdraw the substantive vested right of an aggrieved party to file an appeal against an order not tenable in law and facts, therefore, any order passed u/s. 122 has been made appealable. In the cited reported judgments of Hon'ble Supreme Court of India, the elementary rule of construction of a Section has been discussed and interpreted that all parts of a Section to be read together and it is not permissible to omit any part of it and the principle is that the statute must be read as a whole is squarely applicable to different parts of the same Section. It is also settled that law leans adjudication on merits and merely technicalities should not be hindrance to do complete justice as laid down by the Hon'ble-. Supreme Court in the case of Manager J&K State Property v. Khuda Yar and others, reported in PLD 1975 S.C. 678 that the judgment of Supreme Court is binding on each and every organ of the State by virtue of Articles 189 & 190 of the Constitution of Islamic Republic of Pakistan 1973.
6. Perusal of the record transpires that no plausible and sufficient evidence has brought on the record by the department to establish effective service of show- cause notice upon the taxpayer/appellant, as under the law, th Assessing Officer is required to issue notice u/s. 122 on the duly prescribed form and that issuance of show cause notice on a non-prescribed form is an incurable mistake which caused illegality and assessment on this score has been held not sustainable in reported cases i.e. (2001) 84 Tax 223 (Lahore High Court), 2001 PTD 1633 & 2004 PTD
(Trib) 1784. In another citation reported in (1982) 45 Tax 44, the ex parte assessment without issuance of further notice has been held bad in law. The dictum laid down by the Hon'ble Supreme Court of Pakistan is that a fiscal provision of statute is to be construed liberally in favour of the taxpayer and -in the case of substantial doubt, interpretation/construction most favourable to the taxpayer/assessee should be opted and the benefit of doubt to be resolved in favour of. The taxpayer and that the judicial officer while deciding the matter should adopt construction which appears to be in accordance with reasons and justice and when there are two constructions, the one which leads to absurdity should not be followed and the benefit of the taxpayer should be given preference to strengthen the confidence upon the revenue.
7. There can be no doubt that two or many parts of a Section must be construed as a whole and must be read as part of an integral and to avoid the repugnancy, particularly in the instant case the right of appeal has not been specifically barred. In these circumstances, the summarized order of the learned CIR(A) based on technical grounds regarding no vested right of appeal against the order of Assessing Officer is not tenable in law. The case is, therefore, remanded back to the learned CIR(A) for passing a fresh speaking order on merits, after affording fair opportunity of hearing to both the parties and the case should be expedited and decided as early as possible, preferably within 60 days on receipt of the order.
8. The appeal is decided in the manner indicated above.