TARIQ SALEEM SHEIKH, J.--- This is a reference under Section 133(1) of the Income Tax Ordinance, 2001 (Ordinance XLIX of 2001), in which the following questions of law have been raised:--- Whether on the facts and in the circumstances of the case, the learned Tribunal was justified to vacate the order under Sections 62/65 of the repealed Income Tax Ordinance, 1979 considering the limitation mentioned in Section 65(3) in contravention to the limitations provided in Section 66(1) of the repealed Income Tax Ordinance, 1979?
(ii)Whether on the facts and in the circumstances of the case, the learned Tribunal was justified to vacate the order passed in consequence to the judgment of the apex Court reported as (2009)
100 Tax 81 (S.C. Pak), which was binding on all the functionaries of the State under Article 189 of the Constitution of Pakistan?
(iii)Whether on the facts and in the circumstances of the case, the learned ATIR has not erred in law by vacating the order passed under Sections 62/65 read with Section 66(1) of the Income Tax Ordinance, 1979 ignoring the fact that order under Sections 62/65 was passed by giving effect to order of the Hon'ble Supreme Court within the limitation provided in Section 66(1) of the Ordinance.
2. Brief facts of, the case are that the Respondent is an individual who derives income from manufacturing and sale of crape bandages. On 30.06.2001 his assessment for Assessment Year 2000-2001 was finalized under the Income Tax Ordinance, 1979 (the "Repealed Ordinance").
Subsequently, the Department received definite information that the Respondent had suppressed one of his accounts that he was maintaining with the Soneri Bank Limited, Chiniot Bazar, Faisalabad. Consequently, after issuing a show-cause notice, the assessment was amended under Section 122(1) of the Income Tax Ordinance, 2001, vide order dated 30.06.2006. The Respondent assailed the said order and all the fora up to the High Court decided the matter in his favour holding that Section 122(1) could not be invoked in respect of the assessments finalized under the Repealed Ordinance. The amendment order was thus declared ab initio void.
3. The question as to whether the provisions of Section 122(1) could be invoked to amend the assessm ents that were finalized before Ordinance XLIX of 2001 came into force arose in a number of cases. In most of the said cases the Department filed CPLAs before the Hon'ble Supreme Court of Pakistan for an authoritative judgment. The Department instituted CPLA No. 2259/2008 in the case of the Respondent. The apex Court decided the matter through a consolidated judgment dated 22.06.2009 which is reported as "Commissioner of Income Tax v M/s. Eli Lilly Pakistan (Pvt.) Ltd."
[2009 PTD 1392 = (2009) 100 Tax 81 = 2009 SCM R 1279]. It was held that:---
(a) the provisions of Section 122 of Ordinance XLIX of 2001 were prospective in their application and do not apply to the assessm ent of a year ending on or before 30.06.2002;
(b) Section 65 of the Repealed Ordinance provided a period of five years for additional and such assessm ents were to be dealt with under the said provision in accordance with original Section 239(1) of Ordinance XLIX of 2001;
(c) the assessm ent of any year ending on or before 30.06.2002 would be governed by the Repealed Ordinance and shall be dealt with as if Ordinance XLIX of 2001 had not come into force. .
4. Consequent upon the afore-mentioned holding, the Hon'ble Supreme Court vide Paragraph-64 of the dgment directed that the appeals and petitions placed before it would be governed by the following orders:--- "(i)Civil Appeals No. 1617, 1622-1624, 2673 & 2675-2678 of 2006, and Civil Appeals No. 497, 498, 911, 916, 1002, 1003 and 2282-2292 of 2008 are dismissed as withdrawn with the observation that the assessm ent of any income year ending on or before 30th June, 2002 shall be governed by the repealed Ordinance as if the Ordinance had not come into force as held in Para. 54 above.
(ii) Civil Appeals No. 1099 to 1101 of 2008 and Civil Appeals No. 44 to 51 of 2009 are partly allowed, the judgments of the High Court are set aside and the matters remanded to the concerned High Court for decision according to law.
(iii)Civil Appeals No 826 and 1102 of 2008 are delinted and adjourned to a date in office.
(iv)All the remaining civil appeals and civil petitions are dismissed with no order as to costs."
5. It is noteworthy that CPLA No. 2259/2008 pertaining to the Respondent was covered in sub-para
(iv) of Paragraph-64 of the Hon'ble Supreme. Court's judgment supra and was thus dismissed.
6. Despite dismissal of CPLA No. 2259/2008 the Department initiated proceedings against the Respondent purportedly to give effect to the judgment of the Hon'ble Supreme Court. The ACIR issued Show-Cause Notice dated 06.06.2011 under Section 65 of the Repealed Ordinance read with Section 66 thereof. Finally, additional assessment was made under Sections 65/62 on 30.06.2011.
The Respondent assailed the said order before the Commissioner Inland Revenue (Appeals) which was dismissed vide Order No. 4127, dated 16.11.2011. Thereafter he filed the second appeal before the Appellate Tribunal Inland Revenue which was allowed vide order dated 06.05.2013. Hence, this reference application by the Department.
7. Learned counsel for the Petitioner Department contended that the proceedings initiated against the Respondent were legal and were undertaken to give effect to the judgment of the Hon'ble Supreme Court in the Eli Lilly's case. He further argued that under Section 66(1) of the Repealed Ordinance the amendment proceedings could be finalized within a period of two years from the end of the financial year in which the order is made by the High Court or the Supreme Court in exercise of its original or appellate jurisdiction. In the instant case, the Hon'ble Supreme Court delivered the (consolidated) judgment on 19.05.2009 while the ACIR passed order under Sections 65/62 of the Repealed Ordinance on 30.06.2011. It was thus within the prescribed limitation period.
8. On the other hand, the learned counsel for the Respondent vehemently opposed the afore- mentioned contentions of the learned counsel for the Petitioner. He contended that the Department had misinterpreted the judgment of the Hon'ble Supreme Court in Eli Lilly's case. He argued that CPLA No. 2259/2008 filed by the Department was dismissed and there was nothing in the judgment of the Hon'ble Supreme Court which was required to be given "appeal effect" qua the Respondent. Further, while dismissing the CPLA the Hon'ble Supreme Court had not given the Department any direction to re-initiate the proceedings against the Respondent under Section 65 of the Repealed Ordinance. He next argued that under Section 65(3) of the Repealed Ordinance the order for additional assessm ent under Section 65(1) could only be made within five years from the end of the assessm ent year in which the total income of the said income year was first assessable.
As such, the order dated 30.06.2011 passed by the ACIR was hopelessly barred by time. Learned counsel also relied on judgment dated 29.04.2010 passed by this Court in Writ Petition No. 1238/2010.
9. Before we attend to the respective contentions of the parties in the instant case, we may refer to the case of "Commissioner of Income Tax, Peshawar v. Messrs Islamic Investment Bank Limited'
(2016 SCM R 816) which was decided by the Hon'ble Supreme Court on 16.12.2015. In this case it was held that the provisions of Section 122(5A) of Ordinance XLIX of 2001 were procedural and were thus retrospective in application. It was also held that:--- "Income Tax Ordinance, 2001, had preserved the powers of the tax authorities to revise assessments orders pertaining to the period falling under the repealed Income Tax Ordinance, 1979, i.e. on or before 30.06.2002, and for such purpose Section 239(1) was incorporated in the Income Tax Ordinance, 2001 as a saving clause. 'Additionally, assessments from period of repealed Income Tax Ordinance, 1979 could also be revised/amended on the strength of the provisions of Section 6 of the General Clauses Act 1897 as the charge of tax stood created, in the present case on or before 30-06-2002 thus transforming the State's right to claim tax into a vested right. Had the Income Tax Ordinance, 2001, not come into existence the assessment in the present case could have been amended under the repealed Income. Tax Ordinance 1979, within five years of its finalization i.e. within five years from 14.05.2003, when the initial assessment order in the present case was passed.
This right to revise the assessm ent in question could be exercise under the provisions of the repealed Income Tax Ordinance, 1979, up till 13.05.2008 which right was never given up under any provision of the Income Tax Ordinance, 2001."
10.The Hon'ble Supreme Court further held that the mere fact that the Department had labelled the notice uncle the provisions of the. Ordinance XLIX of 2001 instead of the relevant provision of the Repealed Ordinance would not make it invalid.
11.From the above reading it follows that, subject to law, the Department was competent to revise/amend the assessm ent of the Respondent framed on 30.06.2001. Under Section 65(3) of the Repealed Ordinance this could be done within five years from the end of the assessment year in which the total income of the said income year was first assessable Show-Cause Notice was issued to the Respondent and hi assessment was amended under Section 122(1) vide order dated 30-06-2006 which was within the prescribed period of five years. These proceedings were taken to the Hon'ble Supreme Court where they culminated in favour of the Respondent when CPLA No. 2259/2008 filed by the Department was dismissed. It has thus become a past a closed transaction.
12.The Department relies on Section 66(1) of the Repealed Ordinance to justify its Show-Cause Notice dated 06.06.2011 and the subsequent order dated 30.06.2011 made under Sections 65/62. It would be beneficial to reproduce Section 66(1) which re 4s as under:--- "Notwithstanding anything contained in Section 64 and sub-section (3) of Section 65 where in consequence of, or to give effect to, any finding or direction contained in any order made under this Chapter or Chapter VIII, XIII or XIV or any order made by any High Court or the Supreme Court of Pakistan in exercise of its original or appellate jurisdiction:--- (a)an assessm ent is to be made on any firm or a partner of any firm; or (b)an assessm ent is to be made on the assessee or any other person; or (c)an assessm ent has been set aside, in full or in part, by an order under Section 132 or Section 135 and no appeal is filed under Section 134 against such order or no [appeal filed] under Section 136 in respect thereof, as the case may be, such assessment may be made at any time within two years in any case to which clause (a) or clause (b) applies, and within one year in any case to which clause (c) applies, from the end of the financial year in which such order is received by the [Deputy Commissioner]."
13.The afore-mentioned provision provides for extension of limitation period prescribed in Sections 64 and 65(3). It is, however, applicable to instances where it is, inter-alia, required to give effect to any .order made by the High Court or the Supreme Court. This would also include situations in which the matter is remanded by the said Courts. In the instant case, CPLA No. 2259/2008 was dismissed and the Hon'ble Supreme Court neither remanded the case of the Respondent to any departmental or other authority nor issued any other direction in respect thereof as it had made in respect of certain other cases in Paragraph-64 of its judgment. In a nub, Section 66(1) is not applicable to the facts and circumstances of the instant case.
14.For the above reasons, the questions proposed by the Department are answered in the affirmative, i.e. against it. Office shall send a copy of this judgment to the Appellate Tribunal Inland Revenue under the Seal of this Court in terms of Section 133(5) of Ordinance XLIX of 2001.