MUHAMMAD JAWED ZAKARIA, JUDICIAL MEMBER.--The above titled Miscellaneous Application seeking grant of stay against the recovery of impugned tax demand as well as stay against the remand back proceedings has been filed at the instance of the applicant/taxpayer.
The grounds taken in the Memo. of Application are reproduced hereunder:-- 1) That on facts and circumstances of the case and in law the Order-in-Appeal No. 12 dated 05- 03-2018 passed by the learned Commissioner Inland Revenue, (Appeals-II) Karachi (CIR-A) received on 07-03-2018 is bad in law and fact and circumstances of the case and not sustainable in law and on facts.
2) a) That on facts and circumstances of the case and in law, the learned CIR(A) has seriously erred in confirming assumption of revisionary jurisdiction by the Additional Commissioner of Inland Revenue (ADCIR) under section 122(5A) of the Income Tax Ordinance, 2001. The proceedings initiated by ADCIR were fishing, roving and fact finding proceeding which are beyond the scope of revisionary proceedings under section 122(5A) of the Income Tax Ordinance, 2001. The order of CIR(A) on this score is not sustainable in law and on facts. b) That on facts and circumstances of the case and in law, the CIR(A) seriously erred in approving the legality of proceedings under section 122(5A) of the Income Tax Ordinance, 2001. The proceedings under section 122(5A) of Income Tax Ordinance, 2001 initiated by the ADCIR were of fact finding nature. The order of CIR(A) is not sustainable on facts and in law.
3) a) That on the facts and circumstances of the case and in law, the order of the learned CIR(A) is not proper and justified, as the very the order of the Additional Commissioner of Inland Revenue, Audit Range-B, Zone-V, Large Taxpayers Unit, Karachi (ADCIR) passed under section 122(5A) of the Income Tax Ordinance, 2001 dated 30-11-2017 was bad in law, illegal and void ab-initio. The orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled. b) That on the facts and circumstances of the case and in law, the order of the learned CIR(A) is not proper and justified, as the ADCIR was a functus officio to assume revisionary jurisdiction under section 122(5A) of the Income Tax Ordinance, 2001 and the orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled. c) That on the facts and circumstances of the case and in law, the order passed by the learned CIR(A) is not proper and justified,. as the very assumption of revisionary jurisdiction under .section 122(SA) of the Income Tax Ordinance, 2001 by the ADCIR was illegal and void ab-initio. The orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled. d) That the order passed by the learned CIR(A) is not proper and justified, as very assumption of revisionary jurisdiction under section 122(5A) of the Income Tax Ordinance, 2001 by the ADCIR and the resultant order of ADCIR dated 30-11-2017 was illegal and void ab-initio. The orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled. e) That the order passed by the learned CIR(A) is not proper and justified, as the additions made by ADCIR are based on misreading of facts and law and without fully appreciating replies dated 02-02-2016, 15-02-2016, 18-02-2016 and 30-09-2016. The additions made required to be deleted.
The orders of CIR(A) and ADCIR require to be annulled.
4) That on facts and circumstances of the case and in law, the CIR(A) has erred in holding the principles of natural justice and fair play were adhered to by the ADCIR. The order of ADCIR is not sustainable being in violation of principles of natural justice and CIR(A) should have annulled the order of the ADCIR.
5) a) That on facts and circumstances of the* case and in law, the learned CIR(A) was not justified to confirm the disallowance made by the ADCIR on account of Maintenance and Overhead charges Rs.1,768,625,192/- forming part of Aircraft Lease charges paid to certain non-resident persons by erroneously classifying the same as " royalty " under section 2(54)(e) of Income Tax Ordinance, 2001 so as to attract the provisions of Section 152(1) of Income Tax Ordinance, 2001. The expenses requires to be allowed and the orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled b) Without prejudice to the above, the learned CIR(A) was not justified to confirm the disallowance made by the ADCIR on account of Maintenance and Overhead charges Rs.1,768,625,192 contending lack of evidence to support the applicant's submission that the payments are part of lease rentals without seeking the required evidence that was available on record. The expenses requires to be allowed and the orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled c) That on facts and circumstances of the case and in law, the learned CIR(A) was not justified to confirm the disallowance made by the ADCIR on account of Maintenance and Overhead charges Rs. 1,768,625,192/- forming part of Aircraft Lease charges paid to certain non-resident persons by erroneously classifying the same as " royalty under section 2(54)(e) of Income Tax Ordinance, 2001 so as to attract the provisions of section 152(1). The lease of an "aircraft" cannot be classified as "royalty" and not covered under section 152(1) read with section 6 of the Income Tax Ordinance, 2001. The expenses requires to be allowed and the orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled d) The learned CIR(A) has erred in disregarding the principles laid down by the. Hon. ATIR in the applicant's own case, reported as 2012 PTD 1572/106 Tax 18 wherein it was categorically held that payments to non-residents lessor for lease of an "aircraft" cannot be classified as "royalty" and, consequently, not covered by section 152(1) of the Income Tax Ordinance, 2001 read with section 6 of the Income Tax Ordinance, 2001. The orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled. e) Without prejudice to the above, the CIR(A) and he ADCIR was not justified in placing reliance on various Departmental decisions and the decision of the Hon. ATIR in I.T.As. Nos.868 to 873/KB/2014 in case of Pakistan National Shipping Corporation which revolve around its own facts and did not have a direct relevance to the case of the applicant. The orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled. f) That on facts and circumstances of the case and in law, the learned CIR(A) has seriously erred in not following the ratio of judgment of learned ATIR in applicants own case which was reported as 2012 PTD 1572. The order of CIR(A) being per incurium is not sustainable in law on this issue of deduction of tax under section 152(1) of the Income Tax Ordinance, 2001. g) That on facts and circumstances of the case and in law, the learned CIR(A) has erred in not fully appreciating the arguments advanced by the applicant that the ADCIR was not justified in disallowing maintenance .and overhaul expenses especially considering the Double Taxation Treaties with UAE and Ireland. The order of CIR(A) and ADCIR are not sustainable and addition made of Rs. 1,768,625,192 under the head maintenance and overhaul charges requires to be deleted. h) That on facts and circumstances of the case and in law, the learned CIR(A) was not justified to confirm addition made under the head 'Maintenance and overhaul charges' without fully appreciating the arguments advanced by the applicant. The order of CIR(A) confirming addition under head "maintenance and overhaul charges' is not sustainable on facts and in law. i) That on facts and circumstances of the case and in law, the order of learned CIR(A) confirming addition under the head 'maintenance and overhaul charges' is not sustainable as the CIR(A) has not fully considered the submissions/arguments of the applicant, the Double Taxation Treaties and the case laws.
6) a) That on facts and circumstances of the case and in law, the learned CIR(A) was not justified to remand back the matter to ADCIR in respect of disallowance on account of Advertising expenses of Rs.1,530,265/-made by ADCIR by disregarding exemptions of tax deduction under the provisions of Section 153(1)(6) of the Income Tax Ordinance, 2001 by clause 16A of Part IV to the Second Schedule of the Income Tax Ordinance, 2001. The expenses require to be allowed. The orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled. And claim requires to be allowed. b) That on facts and circumstances of the case and in law, the learned CIR(A) was not justified in remanding back. to ADCIR the issue of addition under the head "advertising expenses" which was added by ADCIR under section 21(c) of Income Tax Ordinance, 2001 for alleged non deduction of tax, whereas the said expenses enjoyed exemption from tax withholding under Clause 16A of Part IV to the Second Schedule to the Income Tax Ordinance, 2001. The addition required to be deleted. a) That on facts and circumstances of the case and in law, the learned CIR(A) was not justified to remand back to ADCIR matter in respect of disallowance on account of "Other expenses" aggregating Rs.116,236,361/- under section 21(c) of the Income Tax Ordinance, 2001 made by ADCIR. The expenses require to be allowed. The orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled and claim allowed. b) That on facts and circumstances of the case and in law, the learned CIR(A) was not justified in remanding back the issue of addition of other expenses for Rs. 116,236,361 added under section 21(c) of the Income Tax Ordinance, 2001 to the ADCIR. The claim requires to be allowed.
8) a) That on facts and circumstances of the case and in law, the learned CIR(A) was not justified to remand back to ADCIR the matter in respect of disallowance on account of" receivables written off of " Rs.20,637,742/- under section 29 of the Income Tax Ordinance, 2001 without considering that the relevant evidence that had been filed and facts of the case. The orders of CIR(A) and ADCIR are not sustainable in law and the addition requires to be deleted. b) Without prejudice to the above, the disallowance of Rs.20,637,742 made by ADCIR of receivable written off under section 29 of Income Tax Ordinance, 2001 and remanded back to ADCIR by the CIR(A) is not sustainable in law and on facts as the written off value does not relate to irrecoverable debts as wrongly assumed by ADCIR. The disallowance requires to be deleted. c) That on facts and circumstances of the case and in law, the learned CIR(A) was not justified in remanding the disallowance made by the ADCIR of receivables written off aggregating Rs.20,637,742/- back to ADCIR disregarding Company's submissions to the effect that the amounts written off, are losses incidental to the business of the applicant Company, are not in the nature of bad debts to which section 29 of the Income Tax Ordinance, The expenses require to be allowed.
The orders of CIR(A) and ADCIR are not sustainable in law and the same require to be annulled and claim allowed.
9) The order of the ADCIR requires to be annulled and the order of the Commissioner of Inland Revenue (Appeal-II) Karachi is also not sustainable on facts and in law on issues mentioned supra.
10) It is now a settled issue that no recovery of disputed tax demand should be made till at least one independent appeal forum has decided the issue of disputed tax demand and in this respect reference is made to ratio of decisions: Sunrise Bottling Company (Pvt.) Ltd., v. Federation of Pakistan 2006 PTD 535, Dawood Textile Printing Industries (Pvt.) Ltd. v. Federation of Pakistan 2009 PTD 1220, Magna Processing Industries (Pvt.) Ltd. v. Federation of Pakistan 2014 PTD 841 and Z.N.
Exports (Pvt.) Ltd. v. Collector Sales Tax 2003 PTD 1746.
11) The Honourable Supreme Court of Pakistan in case of Mehram Ali and others v. Federation of Pakistan and others (PLD 1998 SC 1445) has inter alia held that access to justice is fundamental right and an essential feature of such right is the determination of an grievance or dispute by an independent Tribunal."
2. On factual plane the learned counsel for the taxpayer vehemently argued that the learned CIR(A) was not justified to confirm the disallowance made by the ADCIR on account of Maintenance and Overhead charges Rs. 1,768,625,192/- forming part of Aircraft Lease charges paid to certain non-resident persons by erroneously classifying the same as "royalty " under section 2(54)(e) of Income Tax Ordinance, 2001 so as to attract the charge of provisions of Section 152(1) of Income Tax Ordinance, 2001. The learned CIR(A) has seriously erred in confirming the erroneous disallowance of certain payments to nonresident lessors made pursuant to Aircraft Lease agreements on the alleged grounds that the payments are in the nature of royalty under Section 2(54)(e) of the Income Tax Ordinance, 2001 and therefore non-deduction of WHT from the same, liable to be disallowed under Section 21(c) of the Income Tax Ordinance, 2001. Further it was submitted that the above treatment is in direct conflict with the principles laid down by the Appellate Tribunal Inland Revenue in the applicant's own case reported as 2012 PTD 1572. Further, the learned CIR(A) erred in not considering that the payments which have been subject to disallowance through ADCIR order on account of alleged failure to collect WHT under Section 152(1) of the Income Tax Ordinance, 2001 were made to the non-resident persons belonging to the Countries with whom Pakistan has entered into Double Taxation Treaties (DTTs). By virtue of section 107 of the Income Tax Ordinance, 2001 and also accepted by the Superior Courts in a number of cases. It was further urged that all these DTTs, the income of a non-resident lessor from lease of aircraft is not taxable in Pakistan which is the we-requisite to attract provisions of Section 152 of the Income Tax Ordinance, 2001.
3. Challenging the remand back proceedings, the learned counsel for the taxpayer argued that the learned CIR(A) has also seriously erred in remanding back the matter to ADCIR in respect of disallowance on account of Advertising expenses of Rs.1,530,265/- made by ADCIR by disregarding exemptions of tax deduction under the provisions of Section 153(1)(b) of the Income Tax Ordinance, 2001 by clause 16A of Part IV to the Second Schedule of the Income Tax Ordinance, 2001 and which was added by ADCIR under section 21(c) of Income Tax Ordinance, 2001 for alleged non deduction of tax, whereas the said expenses enjoyed exemption from tax withholding under Clause 16A of Part IV to the Second Schedule to the Income Tax Ordinance, 2001. Similarly, the learned CIR(A) was not justified in remanding back the issues of addition of other expenses of Rs. 116,236,361 under section 21(c) of the Income Tax Ordinance, 2001 and in respect of disallowance on account of "receivables written off of" Rs.20,637,742/- under section 29 of the Income Tax Ordinance, 2001 without considering that the relevant evidence that had been filed by the applicant.
4. The learned counsel for the applicant submitted that against the above order passed by the learned first Appellate Authority the taxpayer has filed an appeal bearing I.T.A. No.708/KB/2018 which is pending adjudication before this Tribunal but in the meantime the Department has started taking coercive measures for recovery of the impugned tax demand, despite the fact that the appeal of the taxpayer has not gone through the scrutiny by an independent judicial forum. Lastly, he argued that irreparable financial loss will be caused if the entire disputed tax demand is not stayed till decision of the main appeal. Prima facie the applicant has a very good case for relief as set out in grounds of appeal and the balance of convenience lies in favour of applicant. In the above circumstances, he prayed that: a) the Recovery of disputed tax demand on account of Maintenance and Overhead charges Rs.1,768,625,192/- against the Petitioner may be stayed till the disposal of appeal by the Hon'ble Tribunal. b) the Commissioner of Inland Revenue, Zone-V, LTU, Karachi, or Additional Commissioner of Inland Revenue, audit Range-B, Zone-V, LTU, Karachi, or any other designated authority / authorized officer / subordinates or their successors may be restrained from taking any action as regards recovery of disputed tax demand of Rs.1,768,625,192/-, interest and penalty levied or leviable for the relevant assessm ent year. c) the proceeding of remand back of issues on account of "Advertising expenses" of Rs.1,530,265/- under section 21(c) of Income Tax Ordinance, 2001, "other expenses" of Rs. 116,236,361 under section 21(c) of the Income Tax Ordinance, 2001 and "receivables written off' of Rs.20,637,742/- under section 29 of the Income Tax Ordinance, 2001 be stayed till the disposal of appeal by the Hon'ble Tribunal.
5. On other hand, the learned D.R. pressed for rejection of above titled Miscellaneous Application by terming the action of the departmental authorities to be justified.
6. The arguments advanced by the representatives of both the parties have been heard and relevant record perused. First we take up the plea of the learned counsel for the applicant regarding stay of remand, back proceedings. In this very case we have examined the provisions of section 132 of the Income Tax Ordinance, 2001. Under section 132 the Appellate Tribunal, in exercise of appellate jurisdiction can affirm, modify or annul an assessment or an order appealed against, in addition to remanding the case to Appellate Commissioner. To exercise this jurisdiction effectively, power to suspend the impugned order or to restrain Taxation Officer from passing assessm ent order, pursuant to the order impugned before it, falls within incidental and ancillary jurisdiction of the Tribunal, particularly when no restriction or limitation, on exercise of such ancillary or incidental power, is available in the subsection (5) of Section 131. Needless to observe that allowing the Taxation Officer to complete re-assessment would not only lead to multiplicity of litigation but would frustrate the right of appeal before Appellate Tribunal if subsequent order is passed. In arriving at these findings we are fortified by the judgment of the Hon'ble Lahore High Court in the case of Shahnawaz v. ATIR reported as 2017 PTD 1134 wherein His lordship observed as under:-- "In our opinion, the power to grant interim relief by suspending wholly or partially, the operation of the order appealed against is reasonably incidental or ancillary to the main appellate jurisdiction."
7. In another case reported as Imran Raza Zaidi v. Commissioner Punjab reported as 1996 SCM R 645 wherein the Hon'ble Supreme Court of Pakistan while examining the provision of Section 5 of Punjab Service Tribunal Act, 1974 wherein powers to grant stay were not provided; after observing that provisions of Civil Procedure Code could be invoked it was held by the Apex Court as under:-- "Apart from this, law is fairly well settled that even in the absence of an express provision for the grant of interim relief, the appellate Court/Tribunal having the power to grant the main relief can also grant the interim relief by suspending wholly or partially, the operation of the order under appeal before it as such a power is reasonably incidental or ancillary Jo the main appellate jurisdiction." [emphasis supplied]
8. The word "Appeal" has not been defined in the Income Tax Ordinance but the word has been adjudicated by the Hon High Court of Sindh in the case of Messrs Chanda Motors reported as 62- TAX-67 which reads as under:- "Applying the dictum laid down in PLD 1964 SC Page 520, PLD 1964 Kar. 587 and PLD 1957 SC 448 (India) we hold that the original assessment ordeRs. reassessment orders and the final assessment order are really but steps in a series of juridical proceedings all connected by intrinsic unit and are to be regarded as one legal proceedings.
9. The original and appellate proceedings are steps in one proceedings (F.A. Khan v. The Government of Pakistan) PLD 1964 SC 520. The legal pursuit of a remedy, suit, appeal, and second appeal are really but steps in a series of judicial proceedings all connected by an intrinsic unity and are to be regarded as on legal proceedings. PLD 1957 SC 448.
The Learned Income Tax Appellate Tribunal in the case reported as 1992 PTD 1581 while adjudicating the word appeal has held as under: "Legally speaking order of assessment passed by Income Tax Officer is an order of original authority but is not final for the reason that it can be challenged in appeal or revision as the case may be and would be final only when it goes through all the forums and the finding of the last forum shall be binding as conclusive.
It can be said without fear of contradiction that order passed in original proceedings is not final unless it crosses all the forum set up under that law in which it can be challenged and the order of the last forum would become final."
10. With the filing of appeal to the Learned ATIR mean the original proceedings are continuing and unless the final order is passed by the final appellate authority the assessment shall not be deemed merely as remanded back but the Assessing Officer shall have to wait for the final decision in the appeal to assume his jurisdiction. The assessment does not come to an end until proceedings with regard to said assessment have finally been concluded. This issue has been settled by the Hon High Court in the case reported as 1985 PTD 375 and the relevant portion is reproduced hereunder:- "4. The learned counsel for the petitioner has argued that the-assessment once made does not come to an end until the proceedings with regard to the assessment have finally been concluded and since the matter of first assessment is till pending in the High Court, the second assessment order is illegal, Reliance is placed on the judgment of the Privy Council in the case of Commissioner Income Bombay Presidency and Aden v. Khemchand Ramdas (1938) 6 ITR 414.
The learned counsel of the respondent on the other hand has argued that the first assessment having been set aside, the Income Tax authorities are not prevented from passing fresh assessment order but he fails to notice that the Appellate Tribunal did not simply set aside the first assessment order, but referred the matter to the High Court to seek its opinion on the question "whether the learned Tribunal was right in setting aside the order instead of cancellation. While this reference is pending it is not open to the income-tax authorities to treat the assessment order as simply set aside or even cancelled. They have no choice but to wait for the answer to the reference."
The majority view of the larger bench of the Learned Appellate Tribunal in the case reported as 1989 PTD 367 is also on the above footing. The extract from the decision is also reproduced hereunder:-- "After completion of assessment as well as hearing of first appeal when the matter was sub judice before the Tribunal the law did not empower any departmental officer to make any further probe on the issues involved. On the principle that the assessment merges in the appellate order, second appeals are to be decided on the basis of material available on assessment record. The only power for obtaining fresh material is with the Tribunal............."
11. We are of the considered opinion that the above judgments are suffice to conclude the matter and stay the remand proceedings till the decision of the main appeal by this Tribunal. The department is hereby refrained to initiate remand proceedings as ordered by the learned CIR (A) which would cause multiplication of litigation. Following the cardinal principle of law as enunciated by the higher appellate fora that no adverse action against the taxpayer can be taken or remand proceedings can be initiated unless the appeal is decided at least by one independent forum.
Therefore, we grant the stay against the proceedings to be intended by the department.
12. Now we, advert to the other plea taken by the taxpayer with regard to the stay of recovery of impugned demand. Admittedly, the appeal of the applicant/taxpayer assailing the treatment meted out by the revenue authorities is pending decision before this Tribunal. Unless the appeal is decided by one independent forum coercive measures for recovery proceedings of the impugned amount could not be made. Reliance is placed on the judgment in the case of Pak-Saudi Fertilizers Ltd. v. Federation of Pakistan reported as 2002 PTD 679 wherein it was observed as under:-- "Stay of recovery proceedings---Petitioner's appeal pending before Commissioner--Assessing Officer took coercive actions by freezing Bank accounts under S.92 of the Ordinance and withdrew funds therefrom---Contention of the Department was that in terms of Circulars issued by Central Board of Revenue; Assessing Officer could take coercive actions towards recoveries despite pendency of appeals and disputes---Validity---Circulars of Central Board of Revenue could not hamper the exercise of discretion in a judicial or quasi-judicial capacity, but such principle of law would not apply to Circulars beneficial to assessee---Failure of respondents to stay recovery, proceedings had amounted to failure to exercise discretion properly and judiciously and on such score, Constitutional petition was maintainable---High Court declared recovery proceedings initiated by Assessing Officer to be without lawful authority in view of the pendency of appeals/disputes and unconditionally stayed the coercive measures towards recovery till disposal of appeals by departmental hierarchies up to the Income Tax Appellate Tribunal."
13. Further reliance is also placed on the judgment reported as 2014 PTD 841 (LHC) Messrs Magna Processing Inds. (Pvt.) Ltd. v. Federation of Pakistan wherein it was observed that:-- "It was settled law that unless appeal was decided by atleast one independent fourm, coercive measures for recovery of disputed amount could not be done."
In further case laws reported as:-- 2006 PTD 535 [Lahore High Court] SUN-RISE BOTTLING COMPANY (PVT.) LTD. through Chief Executive v. FEDERATION OF PAKISTAN and 4 others.
In all fairness, equity and justice, a taxpayer should not be forced to pay a demand created by a Revenue Authority unless the order creating such demand has undergone the scrutiny of at least one independent forum. Similar view was taken in a subsequent decision by the Hon'ble High Court in case titled "Sun-Rise Bottling Company (Pvt.) Ltd. v. Federation of Pakistan" (2006 PTD 535), wherein it was observed that access to justice was a fundamental right and essential feature of such right was determination of any grievance or dispute by an independent Tribunal.
In this regards, it was observed that the Appellate Tribunal provides the independent adjudication of the impugned tax liability. In case titled "Karachi Shipyard and Engineering Works Ltd. v. Additional Collector, Customs Excise and Sales Tax (Adjudication-III), Government of Pakistan, Karachi" (2006 PTD 2207), the Hon'ble Division Bench of Sindh High Court endorsed the principle laid down in the above mentioned judgments.
2009 PTD 1220 [Lahore High Court] Messrs Dawood Textile Printing Industries (Pvt). Ltd., Faisalabad through Chief Executive v. Federation of Pakistan through Secretary, Revenue Division, F.B.R. and 4 others. Relevant extract is reproduced hereunder:-- Recovery of arrears of tax---Appeal to Appellate Tribunal-- Appellate Tribunal granted interim relief which lapsed after the expiry of six months in terms of S.46(4) of the Sales Tax Act, 1990, rendering the petitioner liable to coercive recovery---Petitioner prayed that pending decision of the petitioner's appeal on merits, the pre-mature recovery of impugned dues, was harsh as an assessee was entitled to adjudicate in respect of his disputed tax liability by at least one independent forum outside the hierarchy of the department---High Court directed that the petitioner would appear before the Appellate Tribunal through an appropriate application seeking final adjudication of his pending appeal and Appellate Tribunal would endeavour to decide petitioner's appeal within a specified period---During such period the Authority would not press for recovery of impugned dues through coercive process."
14. In view of the aforementioned principle that has been consistently followed by this Court in a number of decisions, no coercive measures are to be adopted for recovery of the disputed tax liability till the decision by an independent forum (if any authority is further needed one may place reliance on (2003) PTD 1746 = 89 Tax 177. Since the appeal, filed by the Taxpayer, is pending before the Tribunal, therefore, in the light of the above principle, coercive measures for the recovery are not to be effected.
15. Therefore, we find force in the arguments advanced by the learned counsel of the taxpayer that at this stage initiation of recovery proceedings by the revenue authorities without scrutiny by an independent judicial forum is not justified. Following the golden principle of law that when the matter is subjudice before the higher hierarchy the lower officer becomes functus officio. The DCIR cannot initiate any proceedings as in the instant case the DCIR has become functus officio after matter is seized of by this Tribunal. Therefore, at this stage without touching merit of the case and keeping in view this hardship, we are inclined to grant stay against the recovery of impugned tax demand for a period of 60 (sixty) days or the till the decision of the appeal, whichever is earlier.
16. The learned taxpayer is directed to apply for out of turn fixation of main appeal.
17. The Miscellaneous Application is allowed in the manner referred to above.