1986 PLP (Trib (PTD)

M. KARIM (MEMBER).‑‑In these cross‑appeals the assessee and the department are aggrieved against the A . A . C.'s order on different grounds. We shall take up the assessee's appeal first.

2. The assessee did not maintain accounts for his dealings in food grain. In the absence of accounts, the assessee's declared sales of Rs.1,10,000 was not accepted by the department. I.‑T.O.'s estimate of Rs.1,70,000 and G.P. of 10% is not un‑fair. We, therefore, uphold the A . A . C's. order and dismiss the assessee's appeal.

3. The department is aggrieved on account of deletion made by the A . A . C. from the investments treated by the I.‑T.O. as income. The assessee invested in house property. According to the District Engineer's estimated, it was valued at Rs.25,000 whereas according to the .I‑T.O., it was worth Rs.50,

490. A.A.C. found that the department had no basis for enhancing the cost of construction. Whether we agree with the A . A . C . or not one thing is sure that the assessment cannot be sustained. When the assessee's version was not believed. I.‑T.O. had to have the I . A . C's . . . . . . . . . . written approval for the value adopted by him. The I.‑T.O. in his order has mentioned that he took approval' for the draft order. A written approval was necessary. As written approval was not obtained the I.‑T.O. was not justified in enhancing', the value. Therefore, the addition made by the I.‑T.O. in this account', not being legally sustainable, was rightly modified by the A . A . C . ? In the result, the departmental appeal also fails. ABRAR HUSSAIN NAQVI (MEMBER).‑‑While, I agree with the reasons and conclusion in the case of assessee's appeal, which can also be dismissed being time‑barred. I could not persuade myself to agree with my learned brother in regard to the view taken by him in the departmental appeal in my opinion I.A.C's. approval in writing was not necessary for making addition by the I.T.O. In this case the I.‑T.O. obtained approval of the I.A.C On the draft order which fact vas mentioned by him in his order. The reasons for taking this view are as under. 2. ??????? The addition appears to have been made under section 4(2‑F) inasmuch as the cost of construction of house shown by the assessee at Rs.20,000 was not accepted and instead it was worked out at Rs. 53,

490. After allowing available amount out of the business income at Rs.5,000 an addition of Rs.25,490 was made under section 4(2‑F) is reproduced below for ready reference. 4‑F)‑‑Whether the value of any investment or article referred (2 to in subsection (2‑B), (2‑C), or 2(D), or the amount of the expenditure referred to in subsection (2‑E) is, in the opinion of the Income‑‑tax Officer, too low the Income‑tax Officer may, with the prior approval of the Inspecting Assistant Commissioner and after giving the assessee a reasonable opportunity of being heard, determine reasonable value or the amount thereof, as the case may be, and the provisions of the said subsection shall have effect accordingly." The words underlined in the above subsection clearly show that only the word 'approval' has been used and it has not been qualified with the words 'in writing'. It is an admitted principle of interpretation that a Court is not entitled to read words into a statute which are not there and which the Legislature has consciously omitted. The role of Courts is to interpret the law and not to make addition or omission in the statute. It is not admissible for the Courts to make additions or to restore causus omissus. It is also admitted principle of interpretation that when the same word is used in different places, at one place with qualification and at another place without qualification, it will be presumed that the Legislature had deliberately and consciously omitted the qualification at another place. In the Income‑tax Act in the second proviso 'to subsection (1) of section 34 it has been provided that I. A. C's. approval is to be taken in given circumstances in writing." The proviso reads as under:‑‑ "34(1)‑‑Provided further that unless definite information has come into his possession the Income‑tax Officer shall not initiate proceedings under this subsection without obtaining the previous approval of the Inspecting Assistant Commissioner of Income‑tax in writing. By comparing the contents of the above proviso with section 4(2‑F) it is clear that in one place the Legislature has used the word 'approval' without any qualification while in the second place the 'approval' has been qualified to be in writing. This leaves no doubt that the Legislature C did not intend that the approval under section 4(2‑F) should also be in writing. Had it been so the word 'approval' should have been qualified with the words 'in writing'. If any authority is needed in support of l the view which I have taken I would quote the case of Dad Muhammad Khan v. Bassa reported as P L D 1965 Lah. 77 at p.

81. The relevant portion reads as under:‑‑ "A Court is not entitled to read words into an Act of the Legislature unless clear reason for it is to be found within the four corners of the Act itself. Its duty is neither to add to, nor to take from a statute any thing unless there are good grounds for thinking that the Legislature intended something which it has failed precisely to express." On the same principle of interpretation a passage from Maxwell on the Interpretation of Statutes (Twelfth Edition) Page 33 may be quoted as under:‑‑ . "It is a corollary to the general rule of literal construction that nothing is to be added to or taken from a statute unless there are adequate grounds to justify the inference that the legislature intended something which it omitted to express. Lord Mersey said: It is a 'strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do'. We are‑not entitled said Lord Loreburn L.C. to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself. A case not provided for in a statute is not to be dealt with merely because there seems no good reason why it should have been omitted, and the omission appears in consequence to have been unintentional." A Court has no power to make additions and by construction, make up deficiencies, if any. To do so would be to usurp functions of the Legislature. The words cannot be stretched in order to supply omissions or defects nor their meaning can be strained to meet the justice of an individual case. In another case of Chittagong Jute Manufacturing Co. Ltd. v. Province of East Pakistan reported as P L D 1966 Dacca 117 it was held if it is considered to be case of omission it is for the Legislature to fill it up and it is beyond the jurisdiction of a Court to do so. This is not permitted because a Court can only interpret and not legislate. Here I must mention the case of Munawaruddin v . Federation of Pakistan reported as P L D 1979 Lah. 699 which has been relied upon by the Counsel appearing on behalf of the assessee. In that case it has been held as follows:‑‑ ''As for the second point it is well established position of law and practice that public functionaries have to pass all orders in writing. It is necessary for the purposes of record and responsibility and to judge their validity. So far as the orders of the President are concerned they are ant to ho in writing in view of Article 48(3) of the Constitution also as they required for their validity the counter‑signatures of the Prime Minister. No sanctity can thus be attached to oral orders and they each neither confer any rights nor impose a penalty." However, this case is not applicable in the facts and circumstances of the case under consideration. The facts of that case were that a civil servant was suspended from service by a Fedral Secretary with the verbal approval of the Chief Martial Law Administrator.? The Government Servants (Efficiency and Discipline Rules) 1973 provide that a civil servant in the given circumstances can be suspended with the approval of the competent authority. It was in that context that the above ruling was given by a Single Bench of the Lahore High Court. It is well established principle of interpretation that interpretation of a particular word used in a statute cannot be given the same meaning in another statute unless both the statutes are in pari materia. Maxwell on page 72/73 (Twelfth Edition) observed as follows:‑‑ "Occasionally, the construction which has been placed on an earlier Act is adopted even though that statute is not in pari materia with the one to be construed. But it is fallacious to regard the construction .put upon a statute as controlling Acts not dealing with a similar subject‑matter." The case relied upon by the learned Counsel of the assessee related to the interpretation of the word 'approval' in entirely a different context which I am afraid cannot be applied on the fiscal statutes.

3. Now coming to the case under consideration the I.‑T.O. appears to have sent the draft order for approval of the I . A . C. and this fact was mentioned in his order. In my view this was a sufficient compliance of section 4(2‑F). It is pertinent to note that the factum of prior approval by the I.A.C. mentioned by the I.‑T.O. was not challenged by the assessee before the A.A.C. In other words it meant that he was not contesting the factum of prior approval by the I . A . C . In my view, therefore, the I. A. C.'s approval has been validly given in accordance with law.

4. Coming to the merits of the case it may be stated that the learned A.A.C. deleted the addition on the ground that the I.‑T.O. had made a bald estimate of cost of construction and that the observations on the estimate of District Engineer were unwarranted and uncalled for as he was not put any technical question by the I.‑T.O. This inference of the learned A A.C. is obviously wrong. The I.‑T.O. called the District Engineer only to explain the low estimate of cost of construction and no explanation in this regard was advanced. On the other hand the I.‑T.O. had adopted a rational method to arrive at the cost of construction. The I.‑T.O. rightly rejected the certificate of the District Engineer according to which the cost of construction worked out was Rs.30 per sq. ft. The relevant period was 1975‑76 even B‑Class constructions could not be at the rate given by the District Engineer.

5. Fur the foregoing reasons I would accept the departmental appeal vacate the order of the A . A . C. so far as the deletion of addition is concerned and restore that of the I.‑T.O. Since difference of opinion has arisen between the A.M. and J. M. the case may be placed before the President for referring it to a third Member under section 5A(7) of the Income‑tax Act. The points of difference are as under:‑‑ (1)??????? Whether the approval of the I.A.C. under section 4(2‑F) is to be required in writing by the I.‑T.O. (2)??????? Whether the A . A . C . was justified in deleting the addition of? Rs.25,

490. M. KARIM (ACCOUNTANT MEMBER).‑‑The second question does not arise out of the orders, as the Authorised Representative had not said a word about the cost of second question cannot be referred. ABRAR HUSSAIN NAQVI (MEMBER). ‑‑Alright let the first question be referred.? FARHAT ALI KHAN, (MEMBER).‑‑This appeal has been placed before me on direction of learned Chairman as the difference of opinion has arisen between the learned Members who constituted the Bench. The question referred to me is whether the approval of Inspecting Assistant Commissioner under section 4(2‑F) is required in writing by the Income‑tax Officer. 2.???????? The brief facts leading to the reference to third Member are that the assessee and the Department filed cross‑appeals in assessment year 1976‑

77. The learned Accountant Member dismissed the assessee's appeal while confirming the estimated sales of Rs.1,70,000 with G.P. rate of 10$. But he was also pleased to dismiss the departmental appeal on the ground that written approval of the Inspecting Assistant Commissioner was not obtained by the Income‑tax officer as required by section 4(2‑F) of the repealed Income‑tax Act. The learned Judicial Member, however, agreed with the learned Accountant Member that the assessee's appeal could be dismissed but he could not persuade himself to dismiss the Departmental appeal for lack of prior approval of the, Inspecting Assistant Commissioner in writing. 3. ??????? I have perused the orders of both of my learned brothers and have also heard the learned Departmental. Representative. However, none for the assessee turned up though the hearing notice was served on him. Since the service was found satisfactory. I have decided to proceed ex parte arid dispose of the matter on merits. 4.???????? Now turning to the merits of the question referred to me I think it better to reproduce section ,4(2-F)‑once again. It is as under:‑‑ "4(2‑F) whether the value of any investment or article referred to in subsections (2‑B), (2‑C), or (2‑D), or, the amount of the expenditure referred to in subsection (2‑E)? is, in the opinion of the Income‑tax Officer, too low,' the Income‑tax Officer may, with the, prior approval of the Inspecting Assistant Commissioner anal after giving the assessee a reasonable opportunity of being heard, determine reasonable value or the amount thereof, as the case may be, and the provisions of the said subsection shall have effect accordingly." From its bare perusal it appears that the prior approval is not mentioned to be in writing. Comparing provisions of section 4(2‑F) with section l 34(1) of the repealed Income‑tax Act, the learned Judicial Member cam e to the conclusion that since the approval of Inspecting Assistant Commissioner was specifically required to be in writing under section 34(1) and word ?in writing" are not finding place in section 4(2‑F), therefore, it could not be argued that the prior approval should be in writing under section 4(2‑F). In support of his conclusion the learned Judicial Member has discussed some case law. As far as his conclusion under the facts and circumstances of the case is concerned, I respectfully agree with him. Let me mention here that the Income‑tax Officer had sent the draft order for approval of the Inspecting Assistant Commissioner and this fact was mentioned in his order. It is also pertinent to note that the question regarding prior approval or l, non‑approval of Inspecting Assistant Commissioner's order was not agitated before Appellate Assistant Commissioner. Under these circumstances undoubtedly the conclusion of learned Judicial Member is unexceptionably sound. Nevertheless I would like to point out that in all matters where a public officer is supposed to pass an order which is exposed to scrutiny of appellate Courts, it is the policy of law that such orders must always be in writing. The learned Judicial Member has himself cited P L D 1979 Lah. 699 as an authority for this proposition. I feel that if the same reasoning is applied to the provision of section 4(2‑F) the inevitable conclusion one would arrive at would be that prior approval under this section should also be in writing. It is true that the words in writing have not, been used in section 4(2‑F) but it is cardinal principle of law that interpretation should be in such a way that it not only advances the purpose of the legislation but makes a particular provision of law also workable under principles of Common law. It is well‑known that section 4(2‑F) was brought on statute book alongwith other sections of 4(2‑A), 4(2‑B), 4(2‑C), 4(2‑D) and 4(2‑E) though not at the same point of time. As is clear from section 4(2‑A) to 4(2‑E) that the legislature introduced these amendments in the repealed Income‑tax Act to meet special type of cases of income which is known as deemed income. Since the concept of deemed income was being introduced for the first time in the tax fabric of Pakistan, it was felt by the legislature that this taxation with the aid of fiction of law should not be used as instrument of harassment or oppression by the Income‑tax Officers. It was with this idea in mind that the legislature insisted not only on the prior approval of the concerned Inspecting Assistant Commissioner but the provision was made for hearing an assessee also after giving him a reasonable opportunity for it. It appears that the legislature laid down the condition of prior approval of the concerned Inspecting Assistant Commissioner simply with a view to get him involved in the process of assessment. It also appears that the assessments framed under any of these sections were exposed to scrutiny of appellate Courts. As such, the practice which was evolved in the Tax Department was to the effect that the Income‑tax Officer used to consult the Inspecting Assistant Commissioner from time to time whenever he‑thought his advice necessary in the process of making enquiry, and then finally when he came to a conclusion he would send the draft assessment order to him for his approval. The Inspecting Assistant Commissioner would endorse his approval thereon and then send it back to Income‑tax Officer who would frame assessment accordingly. This type of approval has been coming before this Tribunal time and again and it has always been upheld. I, therefore, think that if the record shows the involvement of Inspecting Assistant Commissioner in the process of the assessment and the proposed assessment order is endorsed by Inspecting Assistant Commissioner, it would be taken that section 4(2‑F) has been complied with. In my humble opinion the requirement of prior approval does not envisage a detailed note in writing giving reasons for the approval. But at the same time, an alleged verbal approval would not be sufficient to meet .the requirement of law. If we refer to Webster Lexicon Volume I page 50, we find the following meaning of the word approved. "To admit the propriety or excellence of: to think or Judge well or favourably of; to find to be satisfactory; to give official sanction to a proposal, plan, request, or the like??. In my opinion, the word prior approval as used in section 4(2‑F) means to give official sanction to a proposal. Thus, if the Inspecting Assistant Commissioner puts the word "approve" on the draft assessments order or puts his signatures thereon, or even otherwise communicates in writing his approval to Income‑tax Officer, he would be deemed to have approved the proposed assessment. And the assessment framed under such circumstances would be valid and legal assessment order. Let me, however, point out here that under section 34, the Inspecting Assistant Commissioner is required to do something more in according his approval in writing. Here the word ?in writing? means something, more than mere signatures on the draft assessment order. However, to my mind the proposition that since the words "in writing" are not finding place in section 4(2‑F), the approval could even be an oral approval, is not a sound proposition of law as it does not fit in the general scheme and purpose of the enactment. The dictionary meaning, also does not support it. 5. ??????? To conclude, under the facts and circumstances of the case, I agree with the finding of my learned brother the Judicial Member that the Inspecting Assistant Commissioner's approval has been validly given in accordance with law in the instant case. Thus, in view of majority decision the departmental appeal succeeds and after vacating the order of Appellate Assistant Commissioner the order of Income‑tax Officer is restored. M . B . A .?????? Appeal allowed.