1990 PLP 58 (PTD)

SAEEDUZZAMAN SIDDIQUI, J.‑‑The above petition under Article 199 of the Constitution was filed in this Court on 10‑7‑1989 by the petitioner initially to challenge the two notices dated 22‑6‑1989 issued by the Income‑tax Officer proposing to reassess the income of the petitioner for the years 1974‑75 and 1975

76. On 10‑7‑1989, the Income‑tax Officer concerned also passed final orders it pursuance of above notices. However the petition was admitted to regular hearing on 11‑7‑1989 against the impugned notices only, as the petitioner did not bring it to the notice of the Court at that time, that final orders in the cases have already been passed by the Income‑tax Officer. On 12‑7‑1989, the petitioner, applied for leave to amend the petition so that the final orders dated 10‑7‑1989 passed by the Income‑tax Officer, may also be included in the above petition for challenge which was allowed on 19‑7‑1989.

2. Learned counsel for the petitioner has raised two‑fold contentions before us in support of the petition. It is, firstly, contended that the notices issued by Respondent No. l., under section 65 of the Income‑tax Ordinance, 1979 (hereinafter called `the Ordinance' only for the sake of convenience) are wholly without jurisdiction as the period of limitation which was available under subsection (3) of section 65 of the Ordinance for re‑opening of the assessments for the years 1974‑75 and 1975‑76 had already expired on the date when the two notices were issued on 22‑6‑1989 by the Income‑tax Officer to the petitioner. It is accordingly contended that the impugned notices are wholly without jurisdiction. The second contention of the learned counsel for the petitioners is, that if the impugned notices are considered by the Court as having been issued by the Income‑tax Officer under section 66 of the Income‑tax Act, then too, the same could not be sustained in law, as they were based upon an alleged finding/direction recorded by the Income‑tax Appellate Tribunal in its order dated 16‑4‑1989 while in fact no such finding/ direction existed in the order of Tribunal relied by the Income‑tax Officer. In reply to the above contention of the learned counsel for the petitioner Mr. Shaikh Haider, the learned counsel for respondents raised a preliminary objection as to the maintainability of the above petition. It is contended by the learned counsel that firstly, the notices dated 22‑6‑1989 could no more be challenged by the petitioner as after issuance of these notices, final orders dated 10‑7‑1989 were passed in the cases by the Income‑tax Officer and as such the notices stood merged in the final orders. Secondly, the petitioner has already filed departmental appeal against the final orders dated 10 7‑1989 and as such the petitioner having availed the alternate remedy under the Ordinance which is still pending this Court will not entertain the petition under Article 199 of the Constitution. In reply to the contention of petitioner that proceedings initiated under section 65 of the Ordinance were time‑barred, the learned counsel for the Department stated that no proceedings were drawn against the petitioner by the Income‑tax Officer under section 65 of the Income -tax Ordinance and that the notices were in fact issued by the Income‑tax Officer in exercise of his power under section 66 of the Ordinance. It is common ground between the parties that if the notices are held to have been issued under section 66 of the Income‑tax Ordinance then the proceedings drawn against the petitioner by notice dated 22‑6‑1989 were not time‑barred. The letter dated 22‑6‑1989 addressed by the Income‑tax Officer to petitioner forwarding the notices issued under section 65 of the Ordinance reads as follows:‑‑ OFFICE OF THE INCOME TAX OFFICER CIRCLE‑V ZONE'C' KARACHI Dated: 22‑6‑1989. NO. ITO/CIR.V/1988‑89/ To, M/s. Leslie Sequera, 25‑B 11th Central Street, D.H.S. Karachi. SUBJECT: NOTICE U/S 65 READ WITH SECTION 66(2) OF THE INCOME TAX ORDINANCE. 1979‑‑ASSESSMENT YEARS 1974‑75 & 1975‑76 Please find enclosed notices a/s 65 for Assessment Year 1974‑75 and 1975‑76 which are being issued to give effect to the directions of learned Income- tax Appellate Tribunal's Order No. ITA No. 1688/KB of 1986‑87 Assessment Year 1974‑75 and No. ITA‑1689/KB of 1986‑87 Assessment Year 1975‑76 dated 16‑4‑1989, as stipulated in section 66(2) of the Income‑tax Ordinance, 1979. Kindly ensure compliance within Seven (7) days of receipt of this letter, Sd/‑xxxxxxx (KHAWAR SAEED), Income‑tax Officer Circle‑V, Zone'C', Karachi. From reading of the above letter it is quite clear that although the Income‑tax Officer in the notices issued to petitioner had also referred to section 65 of the Ordinance but in substance the action taken by him fell under section 66 ibid. Mere fact that the Income‑tax Officer had referred a wrong provision of law, in the notice cannot be a ground for holding that proceedings drawn by him were incompetent, if otherwise it can be demonstrated that such proceedings arc maintainable under any other provision of the Ordinance. However, the further contention of the petitioner in the case is that even if the notices are deemed to have been issued under section 66 of the Ordinance, then too the jurisdiction of Income‑tax Officer to issue the same was lacking, as there was no finding or direction in the order of the Tribunal, which is the basis for issuance of the impugned notices. To support his contention that the observations made about the petitioner in the order of the Tribunal dated 16‑4‑1989, which is the basis for issuance of impugned notices, neither amounted to a finding nor a direction so as to justify action under section 66 of the Ordinance, the learned counsel for the petitioner relied on the cases of Rajinder Nath v. Commissioner of Income‑tax (1979 (120) ITR 14), Commissioner of Income‑tax v. Homi Matha (1982 (137) ITR 213). We do not consider here necessary to go into the merit of this contention as in out view this petition can be disposed of on the preliminary objection raised by the learned counsel for the Department. It is quite clear from the contention of petitioner in the above case that he is not alleging lack of authority against Respondent No. 1 in issuing the impugned notices. The challenge is based on the ground that the order of the Tribunal on the basis of which the impugned notices have been issued to petitioner, contained no finding or direction which could justify the issuance of impugned notices under section 66 of the Ordinance by the Income‑tax Officer. It is, therefore clear that there was no patent or inherent lack of jurisdiction on the part of Respondent No. 1 when he issued the impugned notices. The fact, whether the order of Tribunal dated 16‑4‑1989 contained or not, a finding/direction which justified issuance of notices to petitioner under section 66 of the Ordinance, is a question which relates to the interpretation of the order of Tribunal and which in our opinion can properly be decided in a departmental appeal. We therefore, do not find any extraordinary circumstances in the present case which justified filing of the above petition under Article 199 of the Constitution, without exhausting the alternate remedy of appeal under the Ordinance. It has not been contended before us by the learned counsel for the petitioner that remedy by way of appeal provided under Ordinance is onerous or futile or that the scope of appeal is so limited that the relief sought in this petition cannot be granted to the petitioner under the departmental appeal We are accordingly of the view that the above petition is not maintainable as the petitioner has an alternate remedy available to him under the Ordinance which the petitioner has availed and the appeal is presently pending before the appellate forum. We accordingly dismiss the petition but will make no order as to costs. Keeping in view the circumstances of the case and the fact that we are dismissing the petition on a preliminary objection, we direct the Income‑ tax authorities to decide the appeal of the petitioner within three months from today. M.B.A./L‑37/K Petition dismissed.