2018 PLP (Trib (PTD)

MUHAMMAD JAWED ZAKARIA, JUDICIAL MEMBER.

The above Income Tax Appeal has been filed by the Appellant/Taxpayer against the order No.1255, dated 26.10.2016 passed by the Commissioner Inland Revenue (Appeals), Hyderabad whereby he dismissed the appeal of the taxpayer being barred by limitation. The Taxpayer has filed the appeal before this Tribunal on the following grounds;-- (1) That the order passed by the learned Assistant Commissioner Inland Revenue and learned Commissioner Inland Revenue (Appeals) Hyderabad is arbitrary, oppressive, without justification and is not base on proper appreciation of either the fact of the case or of the law on the subject. 2) That the order under section 121(1)(5) of the Income Tax Ordinance, 2001 read with order of CIR (Appeals) are illegal, ultra virus and out of jurisdiction. 3) That the learned CIR(A) has no jurisdiction to decide the appeal as he was the Commissioner Zone-I, previously and one of the party in this case. Therefore, the Commissioner (Appeals) did not care such lacuna and even passed the order without considering that he was the defendant particularly in this case and year in Hon'ble FTO. 4) Without prejudice to the above that the appeal has been filed after the decision of President Order received on 24th August, 2016, therefore, the appeal is well in time and further sufficient reasonable cause is available for prevention the appeal limitation. 5) Without prejudice to the above that the impugned amended order is void, illegal, therefore, the limitation period could not be count/runs against void and illegal order. The finding of Hon'ble FTO, confirmed this aspects. 6) Without prejudice to the above that the amendment in pursuance of section 121(1)(5) of the Income Tax Ordinance, 2001 is not legally justified as the return for the year under appeal is intact under Prime Ministry's Tax. Amnesty Scheme under clauses 87/88 Part-IV of Second Schedule of the Income Tax Ordinance, 2001. 7) That the amended order is without written approval of Chief Commissioner I.R. RTO, Hyderabad, as admittedly the return is intact under clauses 87/88 of Part-IV of Second Schedule of the Income Tax Ordinance, 2001. 8) Without prejudice to the above that the notices bearing Nos.1261 and 3177, dated 08.06.2015 and 24.06.2015 respectively does not received to the appellant. 9) Without prejudice to the above that the matter before Hon'ble FTO has been decided in favour of the appellant's' thus the FTO's order is witness that the learned ACIR's amended order is illegal, perverse and tent amount to maladministration. 10) That the addition of Rs. 6,085,431/- against declared income of Rs. 310,000/- is unwarranted and without any justification, as no provision of law is referred as to separate provision of law is applicable which is altogether not mentioned nor referred. 11) That the order is passed in haste, arbitrary bald and without proper application of mind. 12) Without prejudice to the above that the learned ACIR has misinterpreted and twisted explanation and has not taken the expiation with its entirety. 13) That no separate show cause under section 111 of the Income Tax Ordinance, 2001 amounting to Rs. 3,424,431/- and Rs.2,661,000/- has been issued and served to the appellant. 14) That the notice for addition issued vide No. 3101, dated 26.05.2015 was issued and same where addition of Rs. 1,609,942/- is confronted whereas addition was made on separate figures.

2. Mr. A.S Jafri, Advocate appeared on behalf of the Appellant/ Taxpayer and argued that the order passed by the learned Assistant Commissioner Inland Revenue and learned Commissioner Inland Revenue (Appeals) Hyderabad is arbitrary, oppressive, without justification and is not base on proper appreciation of either the fact of the case or of the law on the subject. He further contended that the order under section 121(1)(5) of the Income Tax Ordinance, 2001 read with order of CIR (Appeals) are illegal, ultra virus and out of jurisdiction. That the learned. CIR(A) has no jurisdiction to decide the appeal as he was the Commissioner Zone-I, previously and one of the party in this case. Therefore, the Commissioner (Appeals) did not care such lacuna and even passed the order without considering that he was the defendant particularly in this case and year in Hon'ble FTO. Learned AR, argued that the prejudice to the above that the appeal has been filed after the decision of President Order received on 24th August, 2016, therefore, the appeal is well in time and further sufficient reasonable cause is available for prevention the appeal limitation. Without prejudice to the above that the impugned amended order is void, illegal, therefore, the limitation period could not be count/ runs against void and illegal order. The finding of Hon'ble FTO, confirmed this aspects. Without prejudice to the above that the amendment in pursuance of section 121(1)(5) of the Income Tax Ordinance, 2001 is not legally justified as the return for the year under appeal is intact under Prime Ministry's Tax Amnesty Scheme under clauses 87/88 Part-IV of Second Schedule of the Income Tax Ordinance, 2001. Without prejudice to the above that the notices bearing Nos. 1261 and 3177, dated 08.06.2015 and 24.06.2015 respectively does not received to the appellant. Without prejudice to the above that the matter before Hon'ble FTO has been decided in favour of the appellant's thus the FTO's order is witnesseth that the learned ACIR's amended order is illegal, perverse and tent amount to maladministration. That the addition of Rs. 6,085,431/- against declared income of Rs. 310,000/- is unwarranted and without any justification, as no provision of law is referred as to separate provision of law is applicable which is altogether not mentioned nor referred. That the order is passed in haste, arbitrary bald and without proper application of mind. Without prejudice to the above that the learned ACIR has misinterpreted and twisted explanation and has not taken the explanation with its entirety. That no separate show cause under section 111 of the Income. Tax Ordinance, 2001 amounting to Rs.3,424,431/- and Rs.2,661,000/- has been issued and served to the appellant. That the notice for addition issued vide No. 3101, dated 26.05.2015 was issued and same where addition of Rs. 1,609,942/- is confronted whereas addition was made on separate figures.

3. It was pointed out by the learned D.R. that appeal filed by the Taxpayer/Appellant is time barred and no plausible explanation was offered by the Appellant, therefore, the appeal is liable to be dismissed.

4. We have heard the learned representatives from both the parties and have also gone through the contents as well as the record of the case.

5. We are of the affirmed view that the taxpayer on question of limitation could not be treated differently from the department.

6. If we look at the words of section 3 of the Limitation Act are mandatory in nature in that every Appeal /suit instituted after the period of limitation shall, subject to the provision of sections 4 to 25 of that Act, be dismissed although limitation has not been set up as a defence. If from the memo. of appeal it appears to be barred by limitation, the appeal shall have to be rejected. Same is the position in case of Order VII, Rule 11, C.P.C. the law, therefore, does not leave the matter of limitation to the pleadings of the parties. It imposes a duty in this regard upon the Court itself. There is chain of authority, and a detailed discussion of the same is not necessary, to lay down that limitation being a matter of statue and the provisions being mandatory, it cannot be waived and even if waived can be taken up by the party waiving it and by the Courts themselves. In Sitharama v. Krishnaswami, where the defendants had pleaded the bar of limitation but the trial Courts had held that they having admitted their liability for the amount in resisting the plaintiff's application in a previous suit, were stopped on general principles of law and equity from pleading that the suit was barred by limitation. It was ruled that the defendants were not stopped and it was observed that "the bar of limitation cannot be waived, and suits and other proceedings must be dismissed if brought after the prescribed period of limitation" and that the Judge cannot, on equitable grounds, enlarge the time allowed by the law, postpone its operation, or introduce exceptions not recognized by if". The same Court in a subsequent case, Ramamurthy v. Gopayya, reiterated that the parties cannot be estopped themselves from pleading the provisions of the statute of limitation. The Lahore High Court also took a similar view in Kundo Mal v. Firm Daulat Ram, and held that there is abundant authority in support of the propostion that objections regarding limitation cannot be waived and that even if they are waived they can be taken up again by the parities waiving them or by the Courts themselves.

7. We have also analyzed series of the judgments of the higher appellate fora and from plain reading of the same the following points emerge: o Valuable right accrues to other side by lapse of time

Each day's delay to be satisfactorily explained as of necessity. o Where the taxpayer / Revenue were not vigilant enough to file appeal before ATIR within period of limitation and were negligent, the either party cannot be penalized. o We are fortified in our opinion by the law laid down by the Hon'ble Supreme Court in the case of Market Committee v. Contonment Board, Shorkot 2001 SCMR 639, wherein the Hon'ble Supreme Court has held that he opposite party cannot be penalized for negligent handling of the case by the petitioner or its counsel. Thus, if the officials of the Sales Tax Department were not vigilant enough to file the appeal before Court within the period of limitation and were negligent, the respondent cannot be penalized in whose favour vested right is created. o Non- filing of appeal within limitation period creates a vested right in favour of respondent. o Appellant failing to sufficiently explain every day's delay in his application for condoning delay-Delay not condoned and consequently appeal held, barred by time and dismissed. o Even a delay of one day in filing of appeal creates a right in favour of opposite party and time barred appeal was liable to be dismissed-- - Appeal being clearly time barred was dismissed by the Appellate Tribunal. o Opposite party could not be penalized for negligent handling of the case by appellant or its counsel

Appeal being hopelessly barred by time, stood dismissed in circumstances.

8. After thoughtful consideration of the case records, we are of the opinion that it has been constant view of the superior courts that for administration of justice principle has to be followed "law would support vigilant and not indolent", therefore, any delay in filing appeal is to be considered negligent on the part of that party, thus, the other party should not be penalized for such negligence.

9. From the above discussion we have no hesitation in holding that the appeal filed by the Taxpayer before the learned CIR(A) is hopelessly barred by limitation thus rightly dismissed in limine. Accordingly the order of the learned CIR (A) is not required any interference.

10. Before parting with this judgment, we may however, observe that the taxpayer had already waived his right of appeal and preferred to file Revision Petition before the CIR under section 122A of the Income Tax Ordinance, 2001 which was rejected by the CIR by observing that " the Commissioner has only Suo-Motu powers in matters requiring intervention / action under section 122A of the Income Tax Ordinance, 2001. Action cannot be taken on application / pointation by the taxpayer. In view of above, action under section 122A is not warranted in the subject matter". However, the above observations of the learned CIR are misconceived and misinterpreted by him. Suo Motu action can be taken when a court or a government entity takes an action on its own motion or as a result of pointation by a party asking or making a motion to move the court. Therefore, in the interest of justice we direct the Commissioner to dispose of the Revision Petition filed by the taxpayer after providing reasonable opportunity of being heard to the taxpayer strictly in accordance with law and on merits.

11. Resultantly, the appellant/taxpayer appeal is hereby dismissed being barred by limitation and devoid of any merits. HBT/42/Tax(Trib.) Appeal dismissed.