JUDGMENT MUNAWAR AHMED MIRZA, J.- This petition for leave to appeal is directed against judgment dated 27.3.1997 passed by the Lahore High Court, in Writ Petition No. 3865 of 1996 and others dated 6.7.1994 and 3.8.1995 passed by the Income Tax Appellate Tribunal.
2. Relevants facts briefly mentioned are that the petitioners-company was running three fast food restaurants in leased premises at Race Course Park, Wahdat Road, and Taj Arcade, Jail Road, Lahore, itis the case of the petitioners that on account of various factors including lack of experience they landed into multiple problems and ultimately lease agreements were terminated^ as restaurants business had to be closed by them due to heavy losses and financial crises, itis alleged that the petitioner-company was existing assessee at N.T. No. 1509282 of Companies Zone, Lahore. Respondent No. 3 demanded excessive amounts towards payment of income tax for the Assessm ent Years 1988-89, 1990-91 and 1991-92 apparently calculating the amount on capacity basis than the actual turn over and income, itis alleged that the petitioner was required to pay income tax of Rs. 406570/, Rs. 353492 and Rs. 613285 respectively for the above referred three years. Aggrieved from said assessm ent, petitioner preferred an appeal before the Commissioner of Income Tax (Appeals) Zone I. It appears from the available record that some concession was granted and average charges per person estimated by the income tax officer were modified and decreased. Similarly, estimated country sales were reasonably reduced. The petitioner aggrieved from the aforesaid decisions of illegal exercise of jurisdiction in raising demand for payment of income tax opted to fail revision petition within the purview of Section 1385)(c) of Income Tax Ordinance. Meanwhile, the department also challenged the orders passed by respondent No. 2 (The Commissioner of Income Tax (Appeals) Zone-I) before the Income Tax Appellate Tribunal, Lahore Bench, Lahore, In the peculiar circumstances of the case revision petition filed by the petitioner alongwith other matters was disposed of for want of jurisdiction as reflected from extract of CBR's letter C. No. 3(16)M(IT. Jud)/93 dated July 6, 1994, which is reproduced below:- "2. The Department and the assessee can both go into second appeal before the Income Tax Appellate Tribunal which holds appellate Jurisdiction against the orders of the Commissioner Income Tax (Appeals) or Appellate Additional Commissioner of Income Tax. The assessee however has an option, that of filing an application for revision under Section 138 before the member (Judicial-Income Tax), who holds revisional Jurisdiction, itoften happens that the assessee is unaware of the Department's second appeal, and avails of his option. On the other hand, the provisions of clause
(c) of sub-section (2) of section 138 of the Income Tax Ordinance, 1979, debars a hearing for revision in cases where the, order has been made the subject-matter of an appeal to the - Income Tax Appellate Tribunal, In fact, if for some inadvertent reason, a conflict arises, the "appellate Jurisdiction" would prevail over the "revision Jurisdiction".
At the same time the appeals filed by the Income Tax Officer, Companies, against the Petitioner were decided by the Income Tax Appellate Tribunal Lahore Bench vide order dated 3.8.1995 whereby partly allow the appeals, matters ( sick ) for recording proper reasons after allowing or denying relief to assessee. The operative portion of the order is reproduced below: "6. After hearing the parties we find force in the contentions made for the Revenue. The first appellant authority did not reasons its order while allowing the impugned relief although it agreed that the Assessing Officer had adopted the basis desired to be adopted in the remand order dated 5.8.1990.
7. The request of the assessee for a remand to 1TO is not legitimate as there has already been a round of remand. The reference to the Division Bench decision dated 22.4.1993, is also improper inasmuch as the order only desires extending of treatment to the Division Bench decision dated 22.4.1993 is also improper inasmuch as the order only desires extending of treatment to the assessee in accordance with one which will be recorded in other years.
8. In view of what has been said above we will allow these departmental appeals partly and remand the appeals in the three years to First Appellate Authority for recording proper reasons for allowing or denying relief to the assessee, as the case may be."
3. It is pertinent to mention her that Petitioner had factually separately challenged the assessment of income tax for year 1989-90 before the Income Tax Appellate Tribunal, Lahore Bench. The appeal was accepted by means of order dated 22nd April, 1993 and matter remanded for de novo consideration of all the factors including adverse effects on the business of the assessee. The operative portion of the said judgment is reproduced below or ready reference:- "3. The learned AR of the assessee strongly agitated that the assessment on which the Assessing Officer has proceeded to assess the income for the year under consideration had already been set aside and re-assessed and subjected to further appeals in the second roun subsequently. Thus, it was contended that very basis the assessment was no longer in the filed, itwas agitated by the learned counsel of the assessee that the Assessing Officer had discarded the trading results without pointing out any specific defects or confronting the assessee with any such defects. The learned Dr. On the other hand, supported the orders of the departmental officials.
4. As per the assessm ent order, the assessee had declared sales of Rs. 12,19,656/- with a GP rate of 42.13% in the Assessm ent Year 1988-89. Thus, (according) to this own admission there was a slight improvement in the declared trading results. However, without confronting the assessee the Assessing Officer proceeded to assess these sales at Rs. 38,00,000/- as against declared sales of Rs. 2,98,568/. In the Assessm ent Year 1988-89, the Assessing Officer estimated the sales at Rs. 36.0.
000/- as against declared sales of Rs. 12,98,568/. In the Assessment Year 1988-89, the Assessing Officer estimated the sales at Rs. 36.0. 000/- as against declared sales of Rs. 12,19,656/- and such assessm ent had been set aside, In the assessment proceedings, the Assessing Officer had estimated restaurant sales at Rs. 29,56,800. In such re-assessment, the Assessing Officer had adopted the seating capacity at 128 whereas the first appellate authority reduced such sitting capacity to 109, vide an order dated 11.8.92. Modification in other estimates were also made and the assessee is said to have filed a revision application which has not been decided,. Considering all the circumstances of the case, it would be appropriate to set aside the assessment for de-novo consideration in the light of the ultimate fate for the year 1988-89 and also other factors \ which are said to be adverse to the business of the assessee. The assessee should be afforded an opportunity at the time of re-assessm ent proceedings."
4. It is most surprising to note that subsequently learned Income Tax Appellate Tribunal, while deciding appeals bearing No. ITA-1802/LB/92-93; No. ITA-470/LB/92- 93 and No. ITA-471/LB/92-93 filed by 1TO Companies against the petitioner, vide judgment dated 3.8.1995, had arbitrarily interfered with aforesaid decision for which it had no lawful authority.
5. Re that as it may, the petitioner finding no other remedy and feeling grossly aggrieved from the assessm ent orders of respondent No. 3 dated 1991-92, and 29.11.1992 for years 1988-89, 1990-91 and 1991-92 coupled with above referred order of the Income Tax Tribunal dated 3.8.1995; filed Writ Petition No. 3865 of 1996 before the Lahore High Court. Said petition was however, dismissed in limine on 27.3.1997. The present petition is now directed against above decision of the High Court and orders passed by income tax authorities.
6. Mian Ashiq Hussin, towards ASC for the petitioner, company, and Mr. M. Ilyas Khan, Sr.ASC for the respondents, addressed arguments at considerable length. From perusal of the record it is quite apparent that assessm ent fixing actual liability of petitioner for payment of income tax concerning years 1988-90, 1990-91 and 1991- 92 has not yet attained finality. At the instance of respondent No. 3 (Income Tax Officer, Companies) the matter has been obviously remanded by the Income Tax Appellate Tribunal vide above-referred order dated 3.8.1995 to Appellate Authority for consideration, itis the case of petitioner company that their grievances had not been effectively attended to by the competent forum constituted under provision of Income Tax Ordinance, 1979 at any stage and even revision petition filed by them was rejected behind their back merely on technical grounds, ithas al60 been urged that the objections-raised against arbitrary assessments made by the Income Tax Officer have not been wealth with or dilated up by superior authorities concerned with adjudication under the provisions of Income Tax Ordinance, 1979. Since final determination about liability for payment of income tax regarding aforesaid assessment- periods has to be worked out by the Appellate Authority in pursuance of above-referred order dated 3.8.1995, we find it just and appropriate to allow the petitioner company an opportunity of agitating its view point and raising objections permissible under law before appellate authority against alleged arbitrary assessm ents or demands made by the Income Tax Officer in respect of aforesaid periods.
8. Accordingly, the petition is converted into an appeal and the impugned order dated 27.3.1997 passed by Lahore High Court in Writ Petition No. 3865 of 1996 is set aside. Relying on general principles after remand the cause becomes wide-open to entertain relevant grievances germane to final adjudication of real controversy. As a result, the remand order dated 3.8.1995 is made open directing the Appellate Authority to pass a detailed order afresh by examining objections of petitioner (assess) and stand of the department by affording the parties reasonable opportunity of be hearing. Petition on conversion into appeal is disposed of the above terms. Parties are, however, left to bear their own costs.