' This order shall also decide I.T.R. No,14 of 2017 as common questions of law are asserted to have arisen out of order dated 17.10.2016 passed by Appellate Tribunal Inland Revenue, Lahore ("Appellate Tribunal").
2. Besides the proposed questions, it is pointed out by learned counsel for the applicant taxpayer that Appellate Tribunal has not applied its independent mind while deciding the case. In support of his assertions, he has read following paragraphs from the Appellate Tribunal's order:-- "5. We have given anxious thought to the averments made by the rival parties and perused the relevant available record. After having scrutinized the relevant record, we have noted that the appellant claimed bad debts amounting to Rs,13,306,000/- and Rs,38,207,000/- while administrative expenses amounting to Rs,22,280,000/- and 57,846,666/- under different heads for the tax years 2005 and 2006 actually which related to other income and in this regard no legal formalities was provided by the taxpayer to support that it made adequate recovery arrangements and the debtors have lost capacity to retire debits and has exhausted legal remedy against the debtors. Accordingly, in the absence of the above authentication, the nature of this claim is that of a provision and is not an admissible expense under the provisions of section 40 of the Income Tax Ordinance, 2001. On the other hand, the learned CIR (Appeals-I1), Lahore has given undue favour to the taxpayer-respondent and deleted the said additions without any plausible reasoning's.
6. In view of the aforementioned discussion we are of the considered view that the order passed by the assessing officer after scrutinizing the relevant record as well as on the basis of the facts and circumstances of the case. Consequently, we have valid reason to vacate the order of the learned CIR(Appeals-II), Lahore dated 30.12.2011 and constrained to agree with the order of the assessing officer dated 30.05.2011 which certainly does not suffer from any factual or legal infirmity and is hereby maintained. This would result into acceptance of the departmental appeals for the tax years 2005 and 2006 to the manner as indicated above."
(emphasis supplied)
3. Learned counsel for the respondent department was confronted with the objection. He has attempted to justify the impugned order but could not convince us.
4. Heard, record perused.
5. Two issues were addressed in the reproduced paragraphs. One was about bad debts and other was regarding expenses relatable to other income. Perusal of Commissioner (Appeals') order shows that elaborate reasons for allowing expenses were given, however, Appellate Tribunal has merely observed that undue favour was given to taxpayer to vacate the Commissioner (Appeals') order, which in our opinion, is not sufficient to reverse the findings of Commissioner Appeals. In paragraph No,6 of the impugned order, Appellate Tribunal has observed that it had valid reason but no reason has been disclosed in this paragraph.
' Needless to say that reasons given by Commissioner (Appeals) were required to be disclosed to form any different opinion by Appellate Tribunal. Hon'ble Supreme Court of Pakistan in Commissioner of Income Tax, Companies Zone-II, Karachi v. Messrs Sindh Engineering (Pvt.)
Limited, Karachi (2002 SCM R 527 = 2002 PTD 419) and this Court in Commissioner Inland Revenue v.
Messrs Mehran Traders (2015 PTD 1330) has already laid down certain parameters to be followed by the Appellate Tribunal while exercising its jurisdiction.
Since the impugned order is passed without applying judicious mind and without giving elaborate necessary reasons, therefore, is set aside set aside. This and connected case are remanded to Appellate Tribunal for re-consideration of the matter in view of law laid down in the judgments noted above. Disposed of.
6. Office shall send a copy of this order under seal of the Court to the Appellate Tribunal as per section 133(5) of the Income Tax Ordinance, 2001.