Whereas Section 221 of the Income Tax Ordinance, 2001 provided for rectification of order passed by Commissioner, Commissioner (Appeals) and Appellate Tribunal Inland Revenue on their own motion or on rectification application filed by the tax payer. It States the Commissioner, the Commissioner (Appeals) or the Appellate Tribunal may, by an order in writing, amend any order passed by him to rectify any mistake apparent from the record on his or its own motion or any mistake brought to his or its notice by a taxpayer or, in the case of the Commissioner (Appeals) or the Appellate Tribunal, the Commissioner.
2, This bench vide order dated 17.06.2022 passed in the case of M/s China National Electric Wire and Cable Import and Export Corporation, Lahore v. The CIR, RTO, Lahore in ITA No. 2814/L13/2022 (Tax Year 2007), in ITA No. 2815/LB/2022 (Tax Year 2008), in ITA No. 2816/LB/2022 (Tax Year 2009), in ITA No. 2817/LB/2022 (Tax Year 2011) and in ITA No. 2818/LB/2022 (Tax Year 2012), committed some grave mistakes of law, which is prima facie A based on some omitted law and specifically on the part of learned A.R who had stated at the bar that learned CIR-Appeals has refused to entertain appeals manually, which is factually incorrect and a patent wrong, especially in terms of FBR's electronic system IRIS (appeals against historical orders up to Tax Year 2013) vis a vis manually filed appeals for the Tax Years prior to TY-2014 (IRIS prior period up to Tax Year 2013).
3. Section 221 ITO delineates a mechanism for rectification of mistakes apparent from the record.
Mr. Waheed Shahzad Butt, Advocate High Court "a Pro Bono Publico Lawyer" was called in person for assistance of the court as Amicus Curie. On court's question he has briefly elaborated the scheme of Ordinance with specific reference of filing of appeal before ATIR, jurisdictional domain and limitations/conditions provided under Sections 129(1)(a), 129(1)(b), 129(4), 131(1) and 221 of the Income Tax Ordinance, 2001. Learned Amicus further states it is a misconception to assume that power of rectification is merely confined to rectification of arithmetical or typographical mistakes, which in fact and law extends to the rectification of mistakes of fact and law, provided such "mistakes are apparent from the record". In support learned Amicus Curie provided latest order passed by a Division Bench of Hon'ble Lahore High Court in Kot Addu Power Company Limited v.
Commissioner Inland Revenue, Regional Tax Officer, Multan (ITR No.224 of 2015) and Hoeble Supreme Court of Pakistan in Commissioner of Income Tax v. Pakistan Petroleum Ltd. (2012 SCAR 371).
4. In response to hearing notice rival parties appeared and argued the case on 05.08.2022 with reference to rectification of mistakes in terms of Section 221 of the ITO, 2001. The learned DR contended that as per irrefutable record no written order has been passed by the worthy Commissioner-IR (Appeals) under section 129 of the ITO, 2001 nor provided by the appellant on 17.06.2022, therefore the ATIR was not legally justified to entertain appeals under section 131 of the ITO, 2001, therefore, the order dated 17.06.2022 has no legal sanctity in the eyes of law and be withdrawn ab-initio, having no force of law. Conversely, Mr. Shoaib Hassan Butt, Advocate, learned counsel appeared for the appellant has supported the order passed by this Tribunal dated 17-6- 2022 and submitted that the ATIR has the vast jurisdiction to entertain the appeals under section 131 of the ITO, 2001 regarding non entertainment of appeal by OR-Appeals and to pass appropriate orders and issue directions against any tax official in terms of Sections 131 of the ITO, 2001. Per learned counsel, the jurisdiction of the ATIR has vast jurisdiction over all the tax Officials under the Income Tax Ordinance, 2001, therefore, the contention of the learned Amicus Curie regarding wrongful assumption of jurisdiction by ATIR in the instant matter is misconceived, having no force of law. Finally, he has prayed for closure of instant proceedings under section 221 of the Income Tax Ordinance, 2001.
5. Heard. Record perused.
6. We have heard both the learned counsel and amicus curies, perused the order dated 17.06.2022 and have also examined the available record. It has been noted that the factual and legal position as depicted in the instant appeals with regard to relevant law on the issue (Sections 127, 129, 131 of ITO, 2001) have not been disputed by the rival parties, whereas a legal controversy with regard to the jurisdiction and authority of the ATIR have been raised, which requires decision by this Tribunal.
During the course of the argument, learned counsel for the appellant was directed to assist this Tribunal on the following four points (i) Whether any appeal can be entertained by the ATIR directly against order passed by department under section 122(5A) of the ITO, 2001? (ii) Whether after approaching the concerned CIR-Appeals, Lahore against the orders passed by Add-CIR under section 122(5A), any written communication/order was issued to the appellant? (iii) Whether the delay of more than 3200 days in filing of appeals under section 127 was communicated to the CIR- Appeals by the appellant? (iv) Whether without availability/issuance of any written order by CIR- Appeals in terms of Section 127 read with Section 129 of the ITO, 2001, any disputed matter can be agitated before this Tribunal under Section 131 of the ITO, 2001. Learned counsel for the appellant taxpayer, in response to above mentioned queries, has candidly given his reply "in Negative".
7. The law on issue is quite unambiguous; the ATIR can entertain an appeal under section 131(1) of the Income Tax Ordinances 2001 against an ORDER PASSED by the Commissioner-IR (Appeals) under Section 129 of the ITO, 2001. Subsection (4) of section 129 explicitly mandates that as soon as practicable after deciding an appeal, the Commissioner-IR (Appeals) SHALL SERVE HIS ORDER on the appellant and the Commissioner. From aforementioned explicit provision of law (ITO, 2001), it is crystal clear that a written order has to be passed by the Commissioner-IR (Appeals), irrespective of fate of matter argued before the CIR-Appeals by any appellant/taxpayer. It is very strange to note that in case, if there is no concept of a written order by the Commissioner-IR (Appeals), Sections 127, 128 and 129 would become redundant. It's a trite law that redundancy is not attributable to the law.
8. Perusal of the record vis-a-vis order dated 17.06.2022 shows that the Commissioner-IR (Appeals) had not passed any written order under section 129 of ITO, 2001 which can be agitated before this forum in terms of right provided by the legislature under Section 131 of the ITO, 2001. The extracts of the appeal filed/signed by Mr. Shoaib Hassan Butt, Advocate, AR of the appellant/taxpayer is reproduced as under in verbatim for the sake of record: "TO WHOM IT MAY CONCERN: It is certified that orders under section 122(5A) passed by the Additional Commissioner Inland Revenue in tax years 2007, 2008, 2009, 2011 and 2012 attached herewith were issued for service by the board on 31-3-2022 and received by taxpayer through e-mail on 28-4-2022 which is sent to the AR for filing appeal before the learned Commissioner Inland Revenue (Appeals).
It is further certified that in pursuance to instructions of the taxpayer appeals were duly got prepared and appeal fee of Rs 2500/- for each year duly paid and tied to file before the Hon'able Commissioner Inland Revenue (Appeal-111) but the office/staff of the Commissioner has steadly refused to receive and entertain the taxpayer's appeal saying that FBR vide SRO No. 1315(1)/2020 dated 9/212/2020 made amendments in the Income Tax Rules, 2002 and as per amended Rule 76 an appeal under section 127 of Ordinance, 2001 shall be filed, as prescribed on IRIS web portal from the 1st day of January 2021. The Commissioner has shown his inability to receive the same keeping in view SR0.1315(1)/2020 dated 09.12.2020 on perception that after 1st July 2021 appeals before the Commissioner (Appeals) can only be filed electronically.
It is stated that view adopted by the Commissioner IR tantamount to infringement the substantive of right of appeal entrusted by law and also Rule 760(2) which clearly state that cases pertaining to periods prior to the tax year 2014 would be proceeded as SRO 279(1)/2018 and also violative of the judgment of the ATIR passed in ITA No. 265/IB/2021 dated 25.02.2021 as well as SRO 279(1)/2018 dated 05.03.2018 whereby it is provided as under:- "The cases pertaining to periods prior to the Tax Year, 2014 would be processed as per SRO.279(1)12018 dated 05.03.2018".
It is therefore prayed that the appeals of the taxpayer may kindly be received/entertained." -sd- Shoaib Hassan Butt Advocate"
9. In the light of the stipulations of the rival parties and examination of record we are of the firm view that that legally the appeals of the taxpayer should not have been entertained by this Tribunal under Section 131 of the ITO, 2001, as there was no written order in the field in terms of Section 129 of the ITO, 2001 by the Commissioner-IR (Appeals). Be that at it may, without going into the controversy of time limitation and merits of the case, as a sequel to the foregoing and in exercise of powers conferred under Section 221 of the ITO, 2001, the order dated 17.06.2022 is re-called and withdrawn ab-initio. Registration is directed to delist the same from its record.