2026 PLP 339 (PTD)

Through this reference application filed under Section 133 of the Income Tax Ordinance, 2001 (The Ordinance), the applicant-Department has challenged the impugned order dated 09.05.2019, passed by the Appellate Tribunal Inland Revenue, Lahore (The Tribunal).

2. Learned counsel for the applicant-Department was directed to assist this Court on the question of limitation, in pursuance of which arguments have been addressed.

3. Arguments heard. Record perused.

4. It is evident from the record that impugned order was passed on 09.05.2019, while the certified copy of the same was received by the applicant-Department on 11.07.2019. The prescribed limit for filing of the reference application was 90-days. The applicant-Department filed this reference application on 08.10.2019, when the office raised objection that file is "totally incomplete", and directed to resubmit after removal of objections within three days, which had to be re-filed till 11.10.2019. However, the applicant-Department after removing the objections re-filed the reference application on 16.09.2020 i.e. after 347 days beyond the period granted for removal of the office objections. This inordinate delay is fatal in absence of any explanation demonstrating "sufficient cause" as required under Section 5 of the Limitation Act, 1908. In the present matter, the applicant-Department has failed to furnish any justification, much less a satisfactory or legally sufficient cause, for the delay in re-filing the reference application.

5. It is a well-settled principle of law that the prescribed period of limitation is not merely a procedural formality but a matter of substantive right. Once the limitation period commences, it runs inexorably and cannot be arrested or extended by administrative lapses or clerical omissions. The Court is duty bound to enforce limitation statutes with judicial rigour and restraint, regardless of whether limitation is raised as a defense. Further, the law aids the vigilant, not the indolent (Leges vigilantibus non donnientibus subserviunt). Ignorance of law, inadvertence, does not constitute valid grounds for condonation, which is not to be granted as a matter of right, but only upon establishing sufficient cause with due diligence. Reliance in this regard can be placed on the judgment of the Hon'ble Supreme Court of Pakistan in Asad Ali and 9 others v. The Bank of Punjab and others (PLD 2020 Supreme Court 736). Further the august Court while dealing with the similar question of law has rendered its latest verdict in the case of Muhammad Faisal Prop., F.A. Traders. Lahore v. Commissioner Inland Revenue Zone-II RTO-II, Lahore (2025 SCMR 930), wherein it has been held as under:- 9.......It is a settled proposition of law that if objections raised by the office of the Court were not removed within the time specified by the office and in the meantime limitation for filing the appeal stands expired, the appeal would be rendered as time barred. Reliance in this regard is placed upon the decision of Asad Ali v. The Bank of Punjab."

6. Similar view has also been taken by this Court in its reported judgment dated 21.10.2025 in the case of Commissioner Inland Revenue, Faisalabad v. Messrs Al-Hamd Cotton Ginning Pressing Factory, Jhang (ITR No.256746 of 2018). The rationale and reasons recorded therein are fully applicable in the instant matters.

7. Accordingly, we hold that this reference application is not maintainable in law on the ground of limitation, in the light of afore referred judgments.

8. The instant reference application is answered in negative, against the applicant-Department in terms thereof.

9. Office to transmit copy of this order under the seal of the Court to the Appellate Tribunal in terms of Section 133(8) of the Income Tax Ordinance, 2001. MQ/C-2/L Application dismissed.