TARIQ SALEEM SHEIKH, J. --- Through this single order we propose to decide PTRs No. 89/2014, 90/2014, 91/2014, 92/2014 & 93/2014 which are directed against consolidated order dated 17.12.2013 passed by the learned Appellate Tribunal Inland Revenue, Lahore (the "Appellate Tribunal").
2. In these reference applications which have been filed under Section 133 of the Income Tax Ordinance, 2001, it is stated that the following questions have been arisen which require determination by this Court:--
(i) Whether on the facts and in the circumstances of the case, the learned Appellate Tribunal Inland Revenue has misread and/or non-read the fact that assessment order dated 08.02.1999 was made not only for the year 1995-96 but for the years 1991-92 to 1995-96 as is apparent from the main body of the assessm ent order and the tax calculations made therein?
(ii) Whether on the facts and in the circumstances of the case the Appellate Tribunal Inland Revenue has misread the order of the Commissioner Income Tax (Appeals) dated 10.11.1999 to hold that directions of the Commissioner Income Tax (Appeals) were in the sense of a comment whereas Commissioner Income Tax (Appeals) has given clear directions that assessment order for the years 1991-92 to 1995-96 should be made afresh after proper scrutiny of records and giving proper opportunity of being heard to the taxpayer?
(iii)Whether on the facts and in the circumstances of the case the Appellate Tribunal Inland Revenue has misread and/or non-read the evidence on record to hold that show-cause notice was not issued whereas show-cause notice was duly issued and reply thereto was submitted by the taxpayer?
(iv)Whether on the facts and in the circumstances of the case the Appellate Tribunal Inland Revenue has erred in admitting details like payments to Government departments and below taxable limit payments in total disregard to Rules 25 and 26 of Appellate Tribunal Inland Revenue Rules, 2010 whereas proper forum for submission and examination of such details is that of the assessing officer?
(v) Whether on the facts and in the circumstances of the case rectification of mistake on point of fact would tantamount to review of the order of the Appellate Tribunal Inland Revenue?
3. Briefly; the facts of the case are that the Respondent is a public company which is engaged in the production and sale of sugar. The assessments of the Respondent for the Assessment Years 1991-92 to 1995-96 were finalized under Section 62 of the Income Tax Ordinance, 1979 (the "Repealed Ordinance"). Subsequently, the Assessing Authority held the Respondent was an assessee-in-default as it had failed to fulfil its obligations as a withholding agent and, on 08.02.1999, passed a combined order under Sections 52/86 of the Repealed Ordinance for the Assessm ent Years 1991-92 to 1995-96, charging tax under Section 50(4) at Rs. 547,500/- and additional tax under Section 86 at Rs. 439,650/-. The Respondent filed an appeal against order dated 08.02.1999 which was accepted. The CIR (Appeals) vacated the said order and remanded the matter for de novo consideration with a direction to pass separate order for every Assessment Year. In the post-remand proceedings, in compliance with the direction of the CIR (Appeals), the Assessing Officer passed orders under Sections 52/132 for every assessment year. The parties contested these orders up to the Hon'ble Supreme Court of Pakistan. The apex Court vide its judgment dated 17.05.2011 remanded the case back to the Appellate Tribunal with a direction to decide the same afresh after affording proper opportunity of being heard to all the concerned.
4. In the second round of litigation the learned Appellate Tribunal, vide order dated 22.12.2011, cancelled the orders passed under Sections 52/132 and vacated the, orders passed by the authorities below. Subsequently, the Department moved miscellaneous application under Rule 768 C.L. Pakistan Company & Tax Law Reports Vol. XXII 20(3) of the Income Tax Appellate Rules, 2005, before the learned Appellate Tribunal seeking rectification/recall of order dated 22.12.2011. These applications were dismissed vide consolidated order dated 17.12.2013. Hence, the above-noted PTRs.
5. The learned counsel for the Respondent a preliminary_ objection that the above-noted reference applications are not maintainable. He argued that a reference application under Section 133(1) of Ordinance XLIX of 2001 before this Court is not competent against an order passed by the Appellate Tribunal refusing the rectify its original order. He placed reliance on "Messrs Hong Kong Chinese Restaurant, Main Boulevard Gulberg, Lahore v. Assistant Commissioner of Income Tax, Circle 6, Lahore and another" (2002 PTD 1878) and "Commissioner of Income Tax v. Standard Food'
J(2005) 91 Tax 230 (H.C. Lah.)1.
6. On the other hand, learned counsel for the Petitioner contended that the aforesaid objection was based on misreading/misconstruction of law as no such bar existed under Section 133(1) of Ordinance XLIX of 2001. Even otherwise, an order refusing a rectification merges with the original order recorded under Section 132 and can give rise to a question of law referable to this Court under Section 133.
7. After hearing learned counsel for the parties we have observed that the legal objection raised on behalf of the Respondent is valid. This issue was dilated upon and settled by this Court in the Hong Kong Chinese Restaurant case supra. While discussing the scope of Sections 135, 136 & 156 of the repealed 'Income Tax Ordinance, 1979, it was held that:--- "15. An order recorded under Section 135 [by the Tribunal] is "rectified" only if an actual modification or rectification is made therein. If no rectification is made and the prayer for rectification is refused then the order under Section 135 already recorded stands intact. The refusal cannot, by any rule of interpretation be read as a part of the original order. An order by which an interference, rectification, correction or amendment in the original order is refused has no legal or factual nexus to become part thereof to give rise to a question to be considered in reference. For similar reasons in case of an unsuccessful application for rectification this Court will never entertain the issue as a question of law if the Tribunal was justified in refusing to rectify an order under Section 135.
"16. In our view there is neither any authority under the Income Tax Ordinance nor any pronouncement by a superior Court in the Sub-Continent under the late Act of 1922 which goes to support the proposition that a question of law arises from an original order of the Tribunal reading with the one through which any amendment, rectification or correction was refused by it. However, as noted earlier if a rectification, amendment, correction or other interference has been made in the order recorded under Section 135 which goes to the prejudice of any of the parties then obviously a fresh cause as well as period of limitation will start from the date when such addition, amendment, rectification or correction was made. An unsuccessful application for rectification can never give rise to either a fresh cause of action or to a question of law giving new lease of life to the order, which had become barred by limitation. A successful application for rectification can never give rise to either a fresh cause of action or to a question of law giving new lease of life to the order which had become barred by limitation. A successful application for rectification or suo motu exercise of the Tribunal which goes to add, excise or amend the order of the Tribunal earlier recorded under Section 135 becomes the part of that order to be read together."
8. The judgment in the Hong Kong Chinese Restaurant case is fully applicable to the cases under the Income Tax Ordinance, 2001, inasmuch as Sections 135, 136 & 156 of the repealed Income Tax Ordinance, 1979, on which it is based are similar to Sections 132, 133 & 221 of the Ordinance of 2001.
9. In view of the foregoing, we hold that the reference applications in hand are not maintainable and decline to answer the proposed questions.
10. Office shall send a copy of this judgment to the Appellate Tribunal under the Seal of this Court in terms of Section 133(5) of the Ordinance.