C.M. 1065/2000 NASIM SIKANDAR, J. - This application under Section 137(1) of the Income Tax Ordinance, 1979 seeks issuance of a fitness certificate for appeal to the Hon'ble Supreme Court of Pakistan.
2. The petitioner, a registered firm, at the relevant time derived income from sale and purchase of lands and buildings. While making the assessment for the year 1983- 84, the Assessing Officer made an addition of Rs. 13,01,200/- by resort to the provisions as contained in Section 13(1)(d) of the Ordinance to the declared business income of the assessee. That addition was made after the Assessing Officer found the declared prices of properties purchased by the assessee during the period under consideration to have been under-stated. The Tribunal accepted part of the contentions of the assessee that the value of the properties as estimated by the Assessing Officer were still on the higher side. Therefore, the addition as earlier reduced by the first appellate forum was further slashed.
3. At the instance of the assessee, the learned Income Tax Appellate Tribunal framed the following questions for our answer and reply in C.T.R. 30/1991:-
(i) Whether there was material before the Tribunal to uphold the addition of Rs.64,000/-to the business income of the assessee and whether the assessee was duly confronted with the said material, if any, in accordance with law?
(ii) Whether the purchase of stock in trade is also included in the outlays listed in Section ,13(1)(d) and in the face of the admitted fact that the purchase of property by the assessee was in the course of his business as of a stock in trade, whether the Tribunal was right in upholding the addition under Section 13(1)(d)?
(iii) Whether there was a legal finding by the Income Tax Officer within the meaning of Section 13(1)
(d) to the effect that the sum expended in the acquiring the properties in question, in fact, exceeded the amount shown in the assessee's books of accounts and whether there was material for such a finding to enable the Income Tax Officer to make the addition under Section 13(1)(d)?
And whether the addition could be made in the absence of such a finding?
(iv) Whether there was material before the Tribunal to uphold the addition to the assessee's income under Section 13(1 )(d) to the extent of Rs.6,86,531/- and whether the assessee was duly confronted with the said material, if any, in accordance with law?"
4. After hearing the parties on 14.11.2000, we refused to answer any of the aforesaid questions on the ground that none of them arose out of the order of the Tribunal, It was noted that before the Tribunal none of the legal issues was ever raised. Instead the addition as made by the Assessing Officer and reduced to some extent by the learned first appellate authority was claimed to be still on the higher side. To that contention the Tribunal partly agreed and therefore allowed partial relief. While disposing of the reference, we concluded that in the given facts no question - of law would be said to have arisen out of the order of the Tribunal. Particularly in view of the settled legal proposition - that a question of law could be said to have arisen only if the issue was raised and ruled upon by the Tribunal, In other words, in absence of any finding recorded thereupon, no authoritative advice could possibly be rendered under Section 136(1) of the Ordinance.
5. Heard the learned counsel for the petitioner. By relying upon (1974) 29 Tax 1 Re: M/s. Hunza Ashian Textile Mills Ltd. Saidpur Road, Rawalpindi v. Commissioner of Sates Tax, Rawalpindi he claims that a question of law apparent from the order of the Tribunal also arises out of its order. Further relies upon PLD 1965 S.C. 690 Re: Haji Abdullah Khan and others v. Nasar Muhammad Khan and others to support the contention that a question of law could be raised at any stage. Lastly relies upon 1999 S.C.M.R. 1072 Re: M/s. Gatron (Industries) Ltd. v. Government of Pakistan and others to argue that the Court is competent to allow raising of a point in appeal if it is necessary for doing complete justice.
6. All the aforesaid authoritative pronouncements are clearly distinguishable. The legal proposition as settled in Hunza Asian Te tile Mills Ltd. (supra) that an apparent question of law d es arise out of the order of the Tribunal is not disputed at ah. That point, however, is not relevant at this stage and in the kind of application under consideration. While disposing of the aforesaid reference, this Court for various reasons as indicated above concluded that no question of law arose out of the order of the Tribunal and that the issues then sought to be mooted were never raised before the Tribunal.
Therefore to say that the claimed legal issues arose out of the order of the Tribunal would not make them apparent questions of law discernable from the order of the Tribunal. Secondly, the contention sounds more for the review of the earlier order of this Court passed in the reference rather than supporting the prayer for issuance of a fitness certificate.
7. The ratio settled in the last cited two judgments of the Hon'ble Supreme Court of Pakistan in Re: Haji Abdullah Khan and others (supra) and M/s. Gatron (industries) Ltd. (supra) is also not relevant to the matter in hand, In the first judgment Re: Haji Abdullah Khan and others (supra), their lordships were hearing a certified appeal against the judgment of the West Pakistan High Court confirming in appeal, a to the plaintiff/respondents for specific performance of an agreement for sale of land, In the process the Court, in its appellate jurisdiction agreed with the proposition that a pure question of law could be raised at any stage of the proceedings. A reference under Section 136 of the Income Tax Ordinance, however, devolves a special jurisdiction on this Court which is advisory in nature. The appellate or revisional jurisdiction of the High Court and even of Supreme Court is certainly different from the jurisdiction as conferred by law on a reference in Income Tax matters, In the last cited case in Re: M/s. Gatron (Industries) Ltd. (supra), the Hon'ble Supreme Court made the observations while exercising jurisdiction under Article 187(1) of the Constitution which is peculiar and exclusive only to the Hon'ble Supreme Court. Otherwise, as a general proposition there is hardly any doubt that the Court is bound to do complete justice and technicalities should not hinder the process. However, that principle too does not help the petitioner in any manner for grant of the fitness certificate prayed for.
8. The prayer made in this petition cannot be granted for the simple reason that under Section 137(1) a fitness certificate can be given by this Court only on a "judgment" delivered by this Court.
According to sub-section (5) of Section 136, the High Court "shall decide the question of law raised thereby and shall deliver its judgment thereon containing the grounds on which such decision is founded". The use of word 'judgment' in sub-section (1) of Section 137 when read in the light of the aforesaid provisions, it is clear that a fitness certificate can be granted only where this Court had decided the question of law raised in a reference. Since in this case the questions as referred to by the Tribunal were found not to have arisen out of its order no "judgment" as contemplated in Section 136(5) was delivered which could be certified to .Be a fit case for appeal to the Hon'ble Supreme Court, It may be repeated that under provisions this Court delivers a "judgment" which contains the grounds on which the decision was founded. These grounds are the only substance which could form a basis for a certificate as prayed for. Where no question of law was considered nor a judgment containing grounds on which the decision was founded were given no occasion for a fitness certificate arises at all.
9. We would like to further explain that a fitness certificate under Section 137(1) of the Ordinance is issued only where a debatable question of law of general importance has been answered by the High Court and in view of the complexity of the issues involved, it is considered suitable to give a certificate so that the matter should finally be resolved by the Supreme Court. A difference of opinion on an issues by different High Courts also gives a good reason for issuance of fitness certificate. Chagla, C.J. In the case of Kaikhushroo Pirojsha V. C.P. Syndicate Ltd. (A.I.R. 1949 Bom.
134) observed that a certificate should be granted if the law is not well-settled or if there is some doubt as to the principle of law involved. There has been a cos siderable difference of opinion amongst various High Courts in India as to the interpretation of Section 66A(3) of the late Income Tax Act, 1922 comparable to sub-section (2) of Section 137 of the Ordinance. However, as to the sufficiency of grounds for granting of a certificate for leave to appeal to the Supreme Court of India, the views of various High Courts appear identical, In (1967) 64 I.T.R. 527 Re: Commissioner of Income Tax V. Kama/ Singh Rampuria, the Calcutta High Court expressed the view that no leave should be granted where mere question of law or of fact had arisen; that litigation should not be made oppressively expensive as it was of importance not to allow the litigants who had succeeded in the High Court to be unnecessarily harassed by further appeal. Earlier the learned Division Bench expressed the view that the principle settled by the Hon'ble Supreme Court in Re: Chunilal Mehta v.
Century Spinning and Manufacturing Co. (A.I.R. 1962 S.C. 1314) was equally applicable in tax matters under Section 66A (2) for grant of a certificate. The Hon'ble Supreme Court of India was considering Section 109 of the CPC in the perspective of their appellate jurisdiction as confirmed by Article 133
(1) of the Constitution of India. 0n consideration of views of various High Courts as well as Privy Council as to what could be a substantial question of law, their lordships concluded that:- "The proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by this Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. If the question is settled by the highest Court or the general principles to be applied in determining the question are well-settled and there is a mere question of applying those principles or that the plea raised in palpably absurd the question would not be a substantial question of law."
10. The Judges of the Calcutta High Court in Re: C/T V. Kama! Singh (supra) finally stated the following principles to be kept in mind while granting a fitness certificate for appeal to the Hon'ble Supreme Court under Section 66-A(2) of the Late Act, 1922:-
(1) When a question is fairly and really arguable and not at all free from difficulty;
(2) When there exists already a difference of opinion whether in the same High Court or in different High Court or a room for it;
(3) Where the High Court though it necessary to deal with the question at length for its complexity (case occupied a very long time before the High Court) and alternative views have been put forward and elaborate judgment was delivered;
(4) When it is still an open question and not finally settled by the Supreme Court;
(5) Where there are grave and considerable doubts in the mind of the reference Court itself and which are likely to govern other cases;
(6) Where a precedent is necessary to be created;
(7) Where it is capable of arising frequently in Courts affecting the assessee generally and depending upon general principles;
(8) When a question of law applied is palpably absurd and contrary to the principle laid down by the Supreme Court;
(9) Where substantial property rights of the parties are affected based on the interpretation of documents;
(10) Where the question touches successive references and the interest is recurring;
(11) Where there are complexities of law requiring authoritative interpretation by the Supreme Court even touching the cases of small value;
(12) Where the dispute is not measurable by money, but one of great public importance, such as those relating to religious rites or ceremonies, to caste and family rights as well as the question of wide public importance such as questions affecting the whole community."
11. The Allahabad High Court in (1951) 55 I.T.R. 91 Re: Mishrimal Gulab Chand v. Commissioner of income Tax, Ajmer Merwara expressed the view that the principles which govern applications for leave to appeal under Section 109(c) of the Civil Procedure Code should normally govern the applications under Section 66A (2) of the Late Act. Further that unless the question raised was of "wide public importance" the case should not be certified as a fit case for appeal.
12. Lastly, a reference needs to be made to the observations of Bhagwati, J. In Re: Haripada Dey v.
State of West Bangal (1956 S.C.R. 639 = 1956 S.C. 757 (S)) while interpreting Article 134(1)(c) of the Constitution of India which provides for grant of fitness certificate by the High Court for appeal to the Supreme Court. The learned Judge observed that no High Court by issuance "of a fitness certificate on a question of fact could arrogate to itself the special jurisdiction of the Supreme Court under Article 136(1) providing for leave to appeal.
13. The issuance of a fitness certificate accordingly is subject to the aforesaid conditions while none of them appears available in the present case. Where this Court declines to answer a question on the ground that either it does not arise out of the order of the Tribunal as framed or it does not raise a legal controversy, the question of issuance of fitness certificate under Section 137(1) for appeal to the Supreme Court does not arise at all.
14. Application rejected. 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.