MUHAMMAD JAWED ZAKARIA, JUDICIAL MEMBER. By this single order we propose to dispose of above appeal and Miscellaneous Application filed by the Applicant/Appellant against the impugned Order No.03 dated 06-06-2018 delivered by the learned CIR (Appeals-IV), Karachi. The Appellant/Taxpayer has also filed Miscellaneous Application (Additional Grounds) requesting therein to allow the Additional Grounds in the above titled Appeal. The main grounds of appeal are reproduced hereunder: "Main Grounds of appeal
1. Being aggrieved and dissatisfied from the charging of income tax, on considering, it is submitted that this honorable Court may be pleased to call for record and proceedings of the case and after being satisfied with its legal propriety to issue the interim order for non- recovering of sales tax till to the appeal on considering inter alia, the following original fact and circumstances of the case.
2. That the learned Deputy Commissioner-IR did not consider the reply of the show-cause notice and create .a demand of Rs.15,878,383/-.
3. That after passing the order under sections 161/205, the petitioner filed an appeal before the Commissioner-IR (Appeals-II) along with stay application which still pending at the end responding No.2 and nor issued a hearing notice.
PRAYER In the view of the above fact narrated above, it is humbly prayed that this honorable court may be pleased to:-- i) Under the circumstances mentioned supra, it is respectfully prayed, that to meet the ends of justice, operation of the impugned recovery notice for attachment of the appellants bank accounts along with the order of the CIR (Appeals-IV) denying interim injection may graciously he suspended particularly when final relief is pending at bar. ii) Grant any other relief to the appellant as this honorable High Court of Sindh, may deem fit and for."
2. Brief facts of the case are that the appellant is an Association of Person engaged in the business of Steel products. The Officer Inland Revenue during proceeding of monitoring of withholding taxes found the appellant assessee in default and passed the order under sections 161/205 of the Income Tax Ordinance, 2001 and raised demand of Rs.15,878,383/-. Being aggrieved, the appellant filed appeal before learned Commissioner-IR, Appeals-IV, Karachi,' who confirmed the order of Officer Inland Revenue, hence, this appeal filed before this Tribunal. The appellant has also filed Miscellaneous application to file additional, grounds vide Miscellaneous Application No. 536/KB/2020 dated: 23.09.2020, the following are additional grounds: i. That the learned Commissioner Inland Revenue, Appeals-IV, Karachi was not justified in upholding the order passed under sections 124/161/205 of the Income Tax Ordinance, 2001 by Deputy Commissioner Inland Revenue, LTU-II, Karachi without applying procedure laid down under section 124(3) of the Income Tax Ordinance, 2001 which has rendered entire proceedings ab initio illegal without lawful authority. ii. That the learned Commissioner Inland Revenue, Appeals-IV, Karachi was not justified in upholding the order under sections 124/161/205 of the Income Tax Ordinance, 2001 by Deputy Commissioner Inland Revenue, without following direction issued passed by the learned Commissioner Inland Revenue, vide order No. 04 dated 06-11-2017 which rendered the order without jurisdiction. iii. That the learned Commissioner Inland Revenue, Appeals-IV, Karachi has erred in not appreciating the facts that the Deputy Commissioner Inland Revenue transgress jurisdiction while passing order under sections 124/161/205 of the Income Tax Ordinance, 2001 which is against principle laid down in case law reported as 2010 PTD 708 (Trib.) iv. That the learned Commissioner Inland Revenue, Appeals-IV, Karachi was not justified to uphold levy of withholding tax by Assistant/Deputy Commissioner Inland Revenue, Large Taxpayer Unit-II, Karachi on various heads amounting to Rs.7,025,833/- by applying flat rates in view of the facts of the case. v. That the learned Commissioner Inland Revenue, Appeals-IV, Karachi was not justified default surcharge amounting to Rs.8,852,550/- imposed under section 205 of the Income Tax Ordinance, 2001 without establishing mens rea on part of the appellant in view of the facts of the case.
3. On the date of hearing M/s. Abdul Rahim Lakhani and Vishwa Mittar Advocates appeared on behalf of the appellant and argued the case and none appeared on behalf of the department side.
4. Firstly, we intend to dispose of Miscellaneous Application for additional grounds. During the proceeding before this bench the learned counsel for the appellant stated that the additional grounds have been taken as such while filing the appeal inadvertently grounds of Stay application were cut, copied, pasted and printed due to counsel's negligence/mistake, for which the appellant should not be suffered. He submitted that in identical situation, the honorable High Court held that the appellant should not be punished on account of counsel's mistake as held in reported, judgment 2006 PTD 476 (High Court Karachi). The learned counsel for appellant also invited our attention to Rule-14 of the Appellate Tribunal Inland Revenue Rules, 2010, according to him that as per Rule-ibid this Tribunal has discretionary powers to entertain any ground not set-forth in Memo of appeal. He also referred as case law reported as 2002 PTD 541 (Lahore High Court) in support of his contention.
5. The learned counsel for appellant, alternatively went on to argue that even otherwise the additional Page 13 grounds also go to the root of the case and can be taken at any stage, he referred case law 2000 PTD 359 (Trib.) in this regard.
6. He submitted that the appellate Tribunal Inland Revenue, is the last facts finding forum, therefore, even factual grounds may be taken during proceedings, he referred case law reported as 2007 PTD 2544 (Trib.). He further submitted that on technical ground appeal cannot be rejected as held by the Supreme Court in reported case law PTD 2014 Supreme Court 89.
7. We considered arguments of the learned counsel for the appellant and gone through the record of the case as well as case laws cited at bar.
8. That at outset, it has been stated that the ground taken along with appeal memo. were by mistaken misprinted, therefore, miscellaneous application for relief to allow additional ground was moved, this fact cannot be ignored specially, in the light of case laws supra referred by the AR.
9. That Rule-14 of thy Appellate Tribunal Inland Revenue Rules, 2010, clearly empowers the Tribunal to consider grounds other than not set-forth in Appeal Memo, for the sake of convenience Rule-14 ibid is reproduced below: "(14) Grounds which may be taken in Appeal.-- The applicant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of the appeal but the Tribunal in deciding the appeal shall not be confined by the grounds sent forth in the memorandum of appeal or taken by leave of the Tribunal under the rule."
10. We are also inclined with the arguments of the learned counsel for the appellant that merely on technical ground and mistake of counsel of the appellant the appeal cannot be rejected.
11. For the reason mentioned herein above, we hereby allow miscellaneous application and admit the additional grounds of appeal for deciding the issues in hand.
12. So far main appeal is concerned, the learned counsel for the appellant has stated that the Officer Inland Revenue, has not followed directions of the learned Commissioner-IR, Appeals, vide Order No.04 dated: 06.11.2017, whereby in the first round, the order-in-original was remanded for a fresh proceeding, the Officer Inland Revenue, has issued another show cause notice extending scope of original proceeding, which is not tenable in the eyes of law and also against the spirit of sections 124/161/205 of the Income Tax Ordinance, 2001.
13. He further, argued that transactions mentioned in the impugned order are not subject to withholding tax, in the light of SRO 586(I)191, he also provided reconciliation before us, furthermore he stated that Officer Inland Revenue ignored such fact of the case which is apparent from the record.
14. The learned counsel for the appellant also invited our attention to the fact of the case that flat higher withholding tax rate has been applied, which is against provision of Income Tax Ordinance, 2001, he also submitted that impugned order has been passed on 31.03.2018 i.e., on Saturday, which is not working day for FBA officials.
15. None appeared on behalf of the department despite proper service of notice.
16. We have considered arguments of the learned representative for the appellant and record perused and reconciliation filed before us during proceeding was also considered. Prima facie, it reflects that transaction are out of purview of section 153 of the Income Tax Ordinance, 2001, the Officer Inland Revenue has also overstepped his jurisdiction while passing order under sections 124/161/205 of the Income Tax Ordinance, 2001, which is impugned order by not following provision of section 124 of the Income Tax Ordinance, 2001.
17. However, ultimately both the learned representative for the appellant have accorded their consent for remanding back the case for de novo proceedings. Therefore, we, consider it would be fair re-adjudicate the issue a fresh accordingly. We set-aside order passed by authorities below and remand the case for de novo proceedings in accordance with law. The learned A.R. is directed to produce all the corroborative evidence and details in support of his claim and the department after going through and scanning the details may finalize the proceedings after providing full and fair opportunity of being heard to the appellant.
18. Both MA. (AG) as well as main appeal stand disposed of in the manner indicated above.