SHAHID JAMIL KHAN, J.----This application is for review of order dated 14.10.2021 passed by this Court in W.P.No.63124 of 2021 whereby the petition was disposed of on production of letter dated 13.10.2021 by Chief Tax Policy, FBR and conceding statement in favour of respondent taxpayers, which is as under: "Mr. Zafar Rafique, Chief Tax Policy, FBR, present in Court has apprised that opportunity of being heard was granted in view of order dated 24.09.2021 in earlier Writ Petition No.57220 of 2021 and petitioner's stance was accepted. However, due to procedural requirement the letter is issued on 13.10.2021, the same is placed on record and a copy is handed over to learned counsel for the petitioner."
The grievance, brought before this Court by the respondent taxpayer(s), through earlier petition, was that filing of online return is so devised that interpretation, by the FBR, of Section 153(1)(b) of the Income Tax Ordinance, 2001 ("Ordinance of 2001") was being imposed by placing restrictions, in the system, if income is computed otherwise in the return.
Federal Board of Revenue was confronted with scheme of the Ordinance of 2001, which confers a right upon the taxpayer to declare its income in the tax return, to be filed under the Section 114, which attains the status of an assessment order and tax due thereon, under the Section 120 for all purposes of Ordinance of 2001. The assessment order taken to have been passed, by the operation of law, can be amended by the Department under Section 122 and in accordance with law. By putting a clog for online submission of a return, if calculation is not as per FBR's interpretation, would amount to take away the statutory right through administrative action.
Direction was given for resolution of the grievance after providing opportunity of being heard. FBR accepted respondent taxpayer's stance and produced letter dated 13.10.2021 with conceding statement based on which the earlier petition was disposed of vide order dated 14.10.2021.
2. For review of this order, it was pleaded that acceptance of taxpayer's stance would take away Commissioner's right to amend the assessment order by invoking provisions of Section 122.
Learned counsel representing the petitioner (`Department') submitted that concession was not in accordance with the facts, as well as, applicable law. He submitted that Integrated Risk Information System ("IRIS") provides an option, for computing income, by applying a different interpretation of a provision, if return is not being accepted normally by the system. Further submitted that in presence of the conceded statement provisions of Section 153(1)(b) of the Ordinance of 2001 would stand interpreted against the interest of revenue. Explains that Statute gives right to the Commissioner for a different interpretation of a provision by invoking provisions of Section 122 of the Ordinance of 2001.
3. In response, learned counsel for respondent No.2 (Mr. Tahir Mehmood Butt,) submitted that the referred tab only relates to the expenses and allows enhancement in expenses, resulting into a lower income.
However, Member (Policy), FBR appeared before the Court and offered another hearing to respondents to resolve the issue. As per report filed by FBR after providing hearing, respondent No.2 refused to avail existing tab for taxpayer's own interpretation whereupon another proposal for new tab (with checkbox) was given, allowing taxpayer to compute income as per its interpretation and file the return accordingly, which would attain status of an order under the Section 120 of the Ordinance of 2001, whereupon, department's right to proceed under relevant provisions would remain intact. Relevant paragraph from the comments is reproduced:- "5. That without prejudice to the Previous Proposal, in light of this Hon'ble Court's concerns a good faith attempt was made to resolve the issue. It was proposed, without prejudice to Previous Proposal, that in case the petitioners don't want to use the Previous Proposal, then a new proposal subject to approval from competent authority was given. As per the new proposal a separate tab with a check-box can be provided which will enable the petitioners to state their reason of disagreement on the interpretation of FBR and it will also enable them to enter their own working of expenses and income as per their own interpretation and to file the return. In case of discrepancy the department may proceed under the law."
[emphasis supplied]
4. Learned counsel for respondent No.2 (Mr. Tahir Mehmood Butt), in response, has not denied rejection of the offer and explained that another box already available but blocked, was not being opened by the department which is the solution to alleviate hardship being faced by respondent No.2 and many other taxpayers.
Learned counsel for the Department explained, on this submission that a number of returns have already been filed on the prescribed format in vogue and the change as being sought by the taxpayers would create hardships for the department. However, on Court's query, it is undertaken that respondent No.2 shall be provided a fair opportunity of being heard before prescribing the forthcoming format for filing of return for future tax returns to ensure taxpayers' right of declaration and computation of income.
5. Heard. Record perused.
6. The issue addressed in earlier Constitutional petition was that a right of declaration and computation of income in a return was being frustrated, which has to be taken as an assessment order under Section 120 of the Ordinance of 2001. In this Court's opinion, grievance of the taxpayers has been redressed through the proposal, noted above, because the taxpayers would be able to compute the income as per their own interpretation.
7. The objection of maintainability of this review application is discarded because the reasons given by the petitioner's side for review of the order dated 14.10.2021 are plausible and accepted.
It is settled law that power to review is available in Constitutional jurisdiction, as provisions of Code of Civil Procedure are applicable. Reference can be made of the judgment in Muhammad Yar (Deceased) through L. Rs. and others v. Muhammad Amin (Deceased) through L.Rs and others (2013 SCMR 464), relevant portion of which is reproduced:- "8. The ancillary question, which may arise in the matter also is, if the bar of Order XXIII, Rule 1, C.P.C. shall also be attracted to and shall prevent the petitioners to invoke the constitutional jurisdiction of the High Court vesting in it under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973. While dealing with the proposition, this court in the context of applicability of section 12(2), C.P.C. in the orders passed in its constitutional jurisdiction has held in the case reported as Secretary, Ministry of Religious Affairs and Minorities and 2 others v. Syed Abdul Majid (1993 SCMR 1171):-- "It is well-settled that the provisions of the Code of Civil Procedure are applicable to Constitution petitions filed in the High Court. Section 12(2), C.P.C. being a part of it will be applicable. In this connection the next point for consideration is whether in view of the fact that this Court had dismissed civil petition for leave to appeal filed by the appellants against the judgment of the High Court, application under section 12(2), C.P.C. could be filed in the High Court or in the Supreme Court. As held in the Government of Sindh and another v. Ch. Fazal Muhammad PLD 1991 SC 197, such application can be filed in the Court which passed the final order. The final order in the present case was passed by the High Court and therefore the application filed by the appellants there was competent."
8. One of the grounds for review, under Section 114 read with Order XLVII of CPC is mistake of law or fact or ignorance of a settled legal position. This Court is convinced that by conceding in favour of the respondent taxpayer's interpretation, the department had compromised its right of different interpretation by invoking the provisions of Section 122 of the Ordinance of 2001.
9. This Review Application is allowed on the undertaking noted in paragraph 5 of petitioner- department's report (ibid) and that respondent No.2 shall be provided a fair opportunity of being heard before prescribing the next return format and in case proposal by respondent-2 / Association is not accepted, reasons shall be communicated in writing.
10. It needs to be reiterated that a taxpayer has right, under the Income Tax Ordinance, 2001, to compute and declare income as per his interpretation of the provisions vis a vis Commissioner's right to amend under Section 122, an assessment order, taken to have been passed under Section
120. Both the rights need to be protected.
11. The order dated 14.10.2021 in W.P.No.63124 of 2021 shall be taken as reviewed/amended accordingly.