2003 PLP 752 (PTD)

Muhammad Farid for Respondents. In this appeal under section 136(1) of the Income Tax Ordinance, 1979 the following questions have been proposed for our consideration:‑‑‑ "(1) Whether the learned Income‑tax Appellate Tribunal was right to hold that the rectification of mistake of purely arithmetical nature are outside the scope of theory or merger as propounded by the Hon'ble Supreme Court of Pakistan reported as (1992) 66 Tax 74 (SC Pak)? (2) Whether on the facts and in the circumstances of the case the learned Income‑tax Appellate Tribunal was unjustified to consider that although the levy of Additional Tax under section 89 of the Income Tax Ordinance, 1979 amounting to Rs.4,14,31,238 (Correct amount Rs.5,10,79,502) was the subject‑matter of appeal, yet its rectification under section 156 of the Income Tax Ordinance, 1979 by Rs.1,59,16,328 is not the issue to allow to invoke the theory of merger?" It is contended by the learned advocates for the appellant that, the rectification in respect of correct figure of additional tax under section 89 of the Income Tax Ordinance, 1979 was the subject‑matter of appeal before CIT(A) and consequently, the Assessing Officer was debarred from rectifying the order, under the law, of merger. On the other hand, Mr. Muhammad Farid, learned counsel for the respondents has submitted that, the issue whether additional tax under section 89 of the Income Tax Ordinance, was leviable or not was the subject‑matter of appeal but the actual figure of the amount was never considered or raised before the Appellate Authority and therefore the figure was not the subject‑matter of appeal. Mr. Rehan Hasan Naqvi, has further stated that, the issue has been set aside by the Income‑tax Appellate Tribunal and the matter has been sent back to the Assessing Officer for deciding the issue pertaining to the levy of additional tax under section 89 afresh. In the above circumstances, we agree with the contention of Mr. Muhammad Farid that, the figure work was not the subject‑matter of appeal and therefore, the Income‑tax Appellate Tribunal has rightly held that, "the law of merger 'was not attracted. The issue relating to, the law of merger has been resolved by the Legislature itself with the insertion of subsection (1A)(b) in section 66‑A of the Income Tax Ordinance by Finance Act, 1991, to the effect that, where an appeal referred to in clause (a) has been decided, in respect of any point or issue which was not the subject‑matter of such appeal, it can be considered by Additional Commissioner for the purpose of revising the order of Deputy Commissioner. It means that, the law of merger is restricted to the extent of a point of issue which is the subject‑matter in appeal and merely by filing an appeal on one point the entire order of the Deputy Commissioner shall not merge in the order of the Appellate Authority. The proposition of law is very clear and unambiguous therefore, no substantial question of law arises out of the order of the Tribunal requiring any interpretation by this Court." Secondly the matter has been rendered of academic interest only, for the reason that, the Income‑tax Appellate Tribunal has set aside the order of Deputy Commissioner Income‑tax and Commissioner Income- tax (Appeal) arid the matter has been remanded to the Deputy Commissioner Income‑tax for fresh consideration. In the above circumstances, the appeal stands dismissed in limine, alongwith the listed application. S.A.K./B‑64/K Appeal dismissed.