MRS. AMBREEN ASLAM, (JUDICIAL MEMBER).--- Through this Order , we intend to dispose of this appeal filed by the appellant/ taxpayer against the Order No, IT/155/2017-18, dated 17.01.2018 (Tax year 2012), passed by the learned Commissioner Inland Revenue (Appeals), Quetta/Sukkur on the following grounds: i. That the learned Commissioner IR !appeals) Quetta/Sukkur has erred in treating the appeal No:235/2016 being time barred vide his Order No:IT/155/2017-18 dated 17-1-2018.
LIMIT ATION Under section 127(5) ii That on 25.4:2017, the above appeal was filed against the impugned Order under section 121(1)(d) dated 6-11- 2015 passed by the DCIR Audit Unit II-Shikarpur , Zone-2, R TO, Sukkur . iii That on 21.8.2017(sic), the appellant received a Notice under section 138(1) bearing Document No: 565195-1 dated 13-3-2017 for recovery of tax amount at Rs,91,27,306. iv. That on same date, the appellant approached the learned OIR for obtaining of Assessment Order which gave rise to tax recovery . v. That the learned OIR did not serve the impugned Order , as according to him, the same was already served upon the appellant. He therefore directed for deposit of copying fee for issuance of true copy of the impugned Order . vi. That on 21-3-2017, the copy fee was paid along with Appeal fee. vii. That on 24-3-2017, appellant filed application for issuance of impugned Order . viii. That on 31-3-2017, the OIR supplied copy of the impugned Order . ix. That the appeal filed on 25-4-2017 i,e, within 28 days. x. Affidavit enclosed as Annexure-A. xi. That Commissioner (A) has mis-directe d himself when he states that True Copy of the Order being dated as 15- 12- 2015. This date is put by a person who had allegedly received the impugned Order .
MERITS SERVICE OF IMPUGNED ORDER
1. That no impugned order under section 121 cord) was served upon the appellant.
2. That no show-cause Notice dated 21-10-2015 (as shown in the impugned Order) was ever served upon the appellant.
SHOR T TIME FOR COMPLIANCE
3. Without prejudice to above, the time allowed vide Notice dated 21-10-2015 for compliance to be made on 29-10- 2015 was short one and. The FBR has directed to provide a time of 15 days Notice time. The learned OIR has violated the directions: ORDER ON A DATE OTHER THAN THE DA TE FIXED ONE
4. Without prejudice to above, the appellant was not taken on Notice for the date 6-11-2015 when the impugned Order was passed. The alleged date for compliance was 29.10.2015.
5. No order can be passed on a date other than the date made known to the affecting person.
2. Brief facts of the case are that the case of the taxpayer was selected for audit for the tax year 2012 by the department. In this -regard, letters of intimation, IDR, and for provision of documents, books of accounts, statement of final accounts, etc issued to taxpayer but the taxpayer did not comply the said letters/notices hence show-cause notice under section 121(1)(d) of the Income Tax Ordinance, 2001 was issued to taxpayer to show-cause as to why assessment of taxable income for the tax year mentioned supra may not be made. But no compliance was made by the taxpayer for the said show-cause notice therefore, the DCIR on the basis of available record passed assessment order under section 121(1)(d) of the Income Tax Ordinance, 2001 bearing DC No,10/01 dated 06-11- 2015. Against the said treatment meted out from the DCIR, the taxpayer preferred appeal before learned CIR(A) who decided appeal of the taxpayer with the following observations: "4. I have carefully gone through the record of the case and considered the written and verbal submissions of both sides. The impugned order has been passed on 06-11-2015 whereas the appeal has been filed on 25-04-2017. To explain the delay , the appellant has claimed that the impugned order was not received by them and they had come to know about it only after receiving recovery notice dated 13-03-2017. Thereafter , they applied for a true copy of the order to file appeal. This contention is found to be false, because the True' Copy on the basis of which this appeal has been filed is dated 15-12-2015. Thus, the appeal has been filed after 30 days even after receiving the True Copy , for which the appellant has neither given any justification nor sought condonation,
5. Since the appeal has been filed over one year after receiving the True Copy, and the appellant has neither given any justification nor applied for condonation of delay , the appeal is hopelessly time-barred in terms of section 127(5) of the Income Tax Ordinance, 2001. No application in terms of section 127(6) has been filed, and this office is not satisfied that the appellant was prevented by sufficient cause from lodging the appeal within that period.
Therefore, the appeal is hereby rejected, being time-barred."
4. Being aggrieved and dissatisfied with the Order No,IT/155/2017-18 dated 17.1.2018, passed by learned CIR(A), the taxpayer preferred instant appeal before this Tribunal.
5. Mr. Udha Ram Rajput, Advocate, attended the proceedings on behalf of the appellant/taxpayer while Mr. Mukhtar Ahmed Shar , D.R. attended on behalf of respondent/department.
6. The learned AR argued that the learned CIR(A) has while passing impugned order erred in treating the appeal of the taxpayer being time barred. He stated that appeal was filed against the order of DCIR before learned CIR(A:) on 25-4-2017 as on 21-3-2017, the appellant/ taxpayer was received a Notice under section 138(1) bearing Document No: 565195-1 dated 13-3-2017 for recovery of tax amount at Rs,91,27,306 and on same date, the appellant approached the learned OIR for obtaining of Assessment Order which gave rise to tax recovery .
7. The learned AR further argued that the learned OIR did not serve the order passed by DCIR, as according to him, the same was already served upon the appellant/taxpayer . He therefore directed for deposit of copying fee for issuance of true copy of the Order of DCIR,
8. The learned AR contended that on 21-3-2017, the copy fee was paid along with Appeal fee and on 24-3-2017, appellant/taxpayer filed application for issuance of Order of DCIR. On 31-3-2017, the OIR supplied copy of the Order of DCIR and the appeal was filed on 25.4.2017 i,e, within 28 days along with its Affidavit. The learned AR further contended that learned CIR(A) has mis-directed himself when he states that True Copy of the Order being dated as 15-12-2015. This date is put by a person who had allegedly received the Order of DCIR.
9. The learned A.R. urged that neither order of DCIR under section 121(1)(d) was served upon the appellant/taxpayer nor any show-cause Notice dated 21.10.2015 was ever served upon the appellant/taxpayer . The learned AR further urged that the time allowed vide Notice dated 21-10-2015 for compliance to be made on 29-10- 2015 was short one while the FBR has directed to provide a time of 15 days Notice time hence the OIR has violated the directions.
10. The learned AR contended that the appellant/taxpayer was not taken on Notice for the date 6-11-2015 when the Order was passed by the DCIR and the alleged date for compliance was 29-10-2015. He further contended that no order can be passed on a date other than the date made known to the affecting person. Lastly , the learned AR prayed for grant of instant appeal by setting aside the impugned orders passed by learned CIR(A) and the DCIR.
11. The learned DR fully supported to the orders passed by DCIR and learned CIR(A). He was of the view that orders have been passed by officers in accordance with the law. He prayed for dismissal of instant appeal of the taxpayer .
12. We have considered the arguments advanced by the learned representatives of both sides, perused the record including impugned order and have gone through the case laws relied upon by learned representatives of both sides and the grounds containing in the appeal. To decide the instant appeal the question before us whether the impugned order requires interference?
13. Precisely the case of the taxpayer is that as per his learned representative the taxpayer was not properly served and the DCIR proceeded against the taxpayer in ex parte, against the said action of DCIR the taxpayer preferred appeal before the Commissioner and the Commissioner without conside ring the cause as placed decide the appeal of the taxpayer in haste on technical ground of limitation whereas the stance of the department is that the taxpayer was served properly and he deliberately avoided to appeal before the DCIR and has also filed appeal before the Commissioner beyond limitation and receiving receipt of the order is part of the record.
14. We considered the case of the parties and peruse the record, before discussin g the merits of the case we find appropriate here to discuss the alleged receiving receipt of the order of the DCIR, by the appellant, perusal of the same indicates that at the beneath of the said order signature with date are discernible, it is matter of record neither the said testament bears the name, address, CNIC number of the said receiver nor the same bear the sign and endorsement by the witnesses in whose presence: the same was received, beside this it is every likelihood that the said signature are of the person who was assigned to deliver the same to the taxpayer .
15. We for the sake of comprehensibility scrutinize the CNIC of the taxpayer there is elucidate difference between the signature of receiver of the said order and in the signature of the taxpayer . We also taken in account signature of the taxpayer marked on Vakalatnama, the same also propose the same perspective, the signature of the taxpayer are dif ferent from recipient of order .
16. So keeping in mind above facts and circumstances, we have taken guidance reported in case law 2004 PTD (Trib.) 106, for the sake of convenience and guida nce of the department the relevant part of the Judgment is reproduce as under:- 2004 PTD (T rib.) 106 At this juncture, we would like to take guidance from the provisions of Code of Civil Procedure, 1908. The provisions of Order V of the Code were relating to the issue and service of process. In rule 12 of Order V of the Code of Civil Procedure 1908, it is laid down that where it is practicable service shall be made on the defendant in person unless he as an agent empowered to accept service in which case service on agent shall be sufficient. In rule 10A of Order V the law envisages issue of process simultaneously through its agency of process and through registered post with Acknowledgment due. In rule 13 of Order V, the method of service on agent in case of defendant carrying on business has been given where service on a person not residing within the local limits of the jurisdiction of the Court can be effected on the manager or agent who at the time of service personally carries on such, business or works for such person within such limits.
From the above referred provisions of the Code of Civil Procedure, 1908 one can see that how important is the factum of service of process for initiating any proceedings of law against a person. -The main stress has been laid on the personal service of the respondent who is being proceeded against and in his absence on his agent who is empowered to accept service or on his male adult member of family residing with the respondent/defendant in case the respondent/defendant cannot be found and is having no agent to accept the service as given in the provisions of rule 15 of Order V of the Code .
There is an explanation under rule 15 of Order -V of the Code to the effect that a servant is not a member of family within the meaning of this rule. It clearl y meant that for effecting the service the summons / notice are to be delivered to the respondent in person or to his agent who is duly empowered to, accept the service or to male adult member of family when the respondent cannot be found and none else can be considered to be a person authorized to accept the service on behalf of the respondent or service on any other person cannot be regarded as valid service. Then there are provisions in rule 16 of Order -V of the Code giving guidelines to the serving officer requiring him to obtain signatures of the person to whom the notices so delivered or learnt and to have an acknowledgement of service endorsed upon the summon/notice. It clearly meant from the above provisions that the serving officer or official must make it clear in the endorsement that on whom the notice has been served as to whether he is the respondent in person or his agent duly empowered to accept the service or male adult member of family in case the respondent could not be found. Then there are provisions of service when the respondent refuses to accept the service in rule 17 of Order V of the Code and for the substituted service in rule 20 of Order -V when the respondent is keeping out of the way for the purposes of avoiding servic e or when summons cannot be served in ordinary way .
As all importance is given to the process of service because this is the basic stage from where onwards the proceedings are initiated against a person and the notice/summons is the basic document which in fact is considered to be the document to call upon the person and to provide an opport unity of being heard to the said person against whom the proceedings are to be initiated. This concept is based on principle of natural justice and is of universal nature and has also been ordained in the statute books where it is always given in one form or other so that no one should be condemned unheard. It is an established principle of legal and natural justice and is known as rule of audi alterm partem which has been acknowledged to be applicable to both judicial as well as non judicial proceedings which culminate in an order against a person respecting his rights or imposing upon him certain charges, liabilities and penalties etc. "
17. Since the department is failed to follow the procedure as laid down in Civil Procedure Code as mention in detail above however we for the sake of fairness consider Circular No,9 of 1987, for the sake of guidance for the department substance of the same is reproduce as under: No, RCIT/ 138/Misc /5631 REGIONAL COMMISSIONER OF INCOME TAX CENTRAL REGION Lahore, 31st March, 1987 CIRCULAR NO.9 OF 1987 (INCOME TAX)
SERVICE OF NOTICES It has been brought to my notice by the Legal Advisers that very often where the service of notice on the assessee is contested by the assesses in appeal, the record shows just two signatures on the office-copy of the notice; one by the assessee and the other by the Notice Server , and it is often not clear who is the assessee and who is the Process Server . In such circumstances, it is difficult to defend proper service of notice before the Court.
The proper course should be that the Notice Server should briefly state that the notice has been served on such and such person and then he should sign it and affix his designation with his name and date. In any case every Notice Server should write his designation with his name.
In case the notice is served by affixture, the official serving the notice should record the complete particulars of the witnesses whose signatures are obtained.
18. From the mentioned substance, it is clear that Regional Commissioner is cautious enough to procure service upon the taxpayers as per prescribed procedure. So far merits of the case are conc ern, in this context we are of the view refusing to condone delay can result in a meritorious matter being thrown out at very threshold and cause of justice being defeated.
19. So considering all above mentioned facts and circumstances, we are of the view impugned order does require interference, the same is set aside and case is remanded to the DCIR to decide the same on merits after providing opportunity of being heard to the taxpayer .
20.Before departing from this order , we direct to office the copy of this judgment shall be sent to Member Legal of FBR with directive he shall circulate the copy of this judgment to the officers conce rned and ensure the compliance in its true spirit under intimation to this Court.
21. The appeals is disposed of f in the manner as indicated above.