MUHAMMAD SAJID 1VIEHMOOD SETH I, J. Through instant Reference Application under Section 133(1) of the Income Tax Ordinance, 2001 ("the Ordinance of 2001 "), following questions of law, asserted to have arisen out of impugned order dated 03.07.2017, passed by learned Appellate Tribunal Inland Revenue, Lahore ("Appellate Tribunal") , have been proposed for our opinion:-
1. Whether on the facts and circumstances of the case, the Appellate Tribunal has not erred in law by upholding the order of Commissioner (Appeals) without adjudicating upon the issues decided by the lower forum?
2. Whether the order of Appellate Tribunal can be termed as a speaking order in terms of Section 24-A of the General Clauses Act, 1897?
3. Whether it was necessary for the learned Appellate Tribunal Inland Revenue to give reasons in support of its decision?
4. Whether the learned Appellate Tribuna l Inland Revenue's order needs to be set at naught by following the ratio of Honorable Lahore High Court's order in PTR No. 152 of. 2014 titled CIR v . M/s. High Noon Lab, Limited ?
5. Whether the learned Appellate Tribunal Inland Revenue was justified to hold that share from AOP was not liable, to be charged in the hands of taxpayer by ignoring the provisions of erstwh ile section 88A of Income Tax Ordinance, 2001?
2. Brief facts of the case are that a Show-Cause Notice was issued under Section 122(5A) read with sub-section
(9) of the Ordinance of 2001, to respondent-taxpayer to amend the deemed assessment, which 'culminated in passing of order-in-original dated 25.01.2011. Feeling aggrieved, respondent-taxpayer filed appeal before CIR (Appeals), which was disposed of vide order dated 01.06.2012, after deleting the proration made by Additional Commissioner. Being dissatisfied, applicant-department preferred appeal before learned Appellate Tribunal, which was dismissed vide order dated 03.07.2017. Hence, this Reference Application.
3. Learned counsel for applicant-department submits that learned Appellate Tribunal has totally ignored the provisions of Section 88A of the Ordinance of 2001 while holding that share from AOP was not liable to be charged in the hands of taxpayer , thus, impugned order is absolutely non-speaking in terms of Section 24-A of the General Clauses Act, 1897. In the end, he submits that impugned order is not sustainable in the eye of law .
4. Heard. Available record perused.
5. Perusal of record shows that learned Appellate Tribunal, after appreciating the available record, has endorsed the findings of facts given by CIR (Appe als), whereby it was held that as. per detail brought on record through written arguments and as evident from the note Nos. 6, 7 and 9 and available un-appropriated profits, respondent- taxpayer had resources other than borrow ed capital for the advancement of loan; that in the same situation, which existed for the tax year 2003, learned Appellate Tribunal, in ITA No. 14/LB/2009 , deleted the addition made under this head; and that in the year 2004, the Additional Commissioner , under Section 122(5A) of the Ordinance ibid, made Similar addition, but same was deleted in appeal by CIR (Appeals) vide order dated 26.10.2010.
6. So far as the taxation of income from operations in Saudi Arabia is concerned, to this extent, CIR. (Appeals) observed that the Additional Commissioner should re-examine the issue in the light of tax, treaty with Saudi Arabia and if it is exempted in Pakistan, action should be taken under the law and in case, it is found taxable in Pakistan, credit of the tax paid in Saudi Arabia, if any , shall be given under Section 103 as provided in law .
So far as proration of expenses between receipts from FTR and other normal law receipts of the respondent- taxpayer is concerned, it was observed by CIR (Appeals) that respondent-taxpaye r filed its separate statement of final taxation, based on separate audited accounts and that the respondent-taxpayer has 70% shares in the total receipts and expenses of AOP and on the basis of IAS-31, which has been incorpo rated in the final accounts of the respondent-taxpayer , hence, there, is no occasion for any proration as the same was never part of its income tax return. Resultantly , CIR (Appeals) proceeded to delete the proration made by Additional Commissioner , keeping in view the treatment already meted out by applicant-department.
7. Undisputedly , the concurrent findings of facts recorded by two appellate fora under the Ordinance of 2001, unless found to be perverse and contrary to record, cannot be interfered with by the High Court, while examining questions of law proposed under Section 133 of the Ordinance ibid Scope of reference jurisdiction under the said provision of law is restricted only to the extent of examining questions of law arising from order passed by learned Appellate Tribunal and not to decide question of facts, or for determining disputed facts. However , only substantial legal questions can be examined, which may arise from an order passed by the Appellate Tribunal, whereas questions which require no interpretation of any provision of law, rules or regulations, or its application on undisputed facts of a case do not constitute a question of law to be decided by this Court under the aforesaid provisions of law Reference is made to Messrs F.M.Y. Industries Ltd. v. Deputy Commissioner Income Tax (2014 SCMR 907), Commissioner Inland, Revenue, Zone- I v. Messrs Industrial Chemicals (Pvt.) Ltd. (2017 PTD 756), Commissioner of Income Tax v. Ghee Corporation of Pakistan (Pvt.) Ltd. (2017 PTD 1167), Commissioner Inland Revenue v. Messrs Adeel Brothers (2017 PTD 1579 ) and Commissioner Inland Revenue, Zone-II v . Al-Hamad International Container T erminal (Pvt.) Ltd. (2017 PTD 2212 ).
8. Since the detection by learned. Appellate Tribunal is based on findings of facts, recorded by CIR (Appeals), therefore, we decline to exercise Advisory jurisdiction.
This Reference Application is decided against applicant-department.
9. Office shall send a copy of this order under seal of the Court to learned Appellate Tribunal as per Section 133(5), of the Ordinance of 2001. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.