2026 PLP 938 (PTD)

WIQAR AHMAD, J.

Petitioner (M/s. Khan Gas (Pvt.) Limited) invoked advisory jurisdiction of this Court under Section 133 of the Income Tax Ordinance, 2001 (hereinafter referred to Ordinance), seeking set aside the order dated 06.03.2023, passed by learned Appellate Tribunal Inland Revenue, Peshawar Bench, whereby appeal of petitioner was dismissed as time-barred. Petitioner also prayed that findings of Tribunal in MA (Cond.) No. 38/PB/2023 and ITA No. 239/PB/2023 be declared perverse and without lawful authority. He further prayed that confirmation order passed by Deputy Commissioner-IR, Corporate Zone, RTO Peshawar, under Section 161(1) read with Section 205 of the Ordinance, for tax year 2019, is illegal, arbitrary, and without jurisdiction therefore, respondents be restraining from initiating coercive measures and recovery proceedings.

2. As per contents of instant Reference, petitioner being a private limited company engaged in business of gas distribution, filed its return for the tax year 2019 declaring income and receipts as per Annexure-A. Subsequently, proceedings under Section 161(1) of the Ordinance were initiated by respondent department, alleging failure to deduct withholding tax at source from payments made to suppliers and contractors. The assessing authority, after seeking partial reconciliation, finalized the order and raised tax demand along with additional tax under Section 205 of the Ordinance. Appeal filed by petitioner before Commissioner (Appeals), Peshawar, was dismissed on 19.04.2023. Aggrieved from said order, petitioner approached Appellate Tribunal Inland Revenue with an appeal accompanied by an application for condonation of delay of forty-five days, asserting that delay had occurred due to prolonged illness, anxiety and depression of representative of petitioner, which allegedly prevented timely filing of appeal. After affording opportunity of hearing to both sides, worthy Tribunal found the explanation insufficient and not supported by documentary or medical evidence and observed that mere averments of ill health and mental stress without any credible proof do not constitute "sufficient cause" within the contemplation of Section 5 of the Limitation Act, 1908, read with Section 131(4) of the Ordinance therefore, both condonation application and appeal were dismissed vide impugned order dated 06.03.2024. Feeling aggrieved from impugned orders, petitioner has now approached this Court through filing instant Tax Reference, raising various questions of law. The principal grievance is that the Tribunal, while dismissing the appeal as time-barred, failed to appreciate that the Assessing Officer had acted without jurisdiction under Section 161(1); that the petitioner had been denied fair opportunity of reconciliation; and that the dismissal of appeal on a technical ground of limitation amounted to miscarriage of justice.

3. Arguments heard and available record perused.

4. The core issue before this Court is whether Appellate Tribunal Inland Revenue committed any error of law in declining to condone delay in filing the appeal and consequently dismissing it as barred by limitation. It is settled principle that condonation of delay is a matter of judicial discretion, not a right vested in the litigant. Such discretion must be exercised judiciously and within parameters recognized by law. In this regard reference may be made to State Life Insurance Corporation of Pakistan v. Mst. Undlus Begum (2024 CLD 445 Lahore) and Ameenul Haq v. Falak Naz and another (2022 YLR Note 73 Sindh). Relevant provisions of Section 5 of the Limitation Act, 1908 and Section 131(4) of Income Tax Ordinance, 2001 explicitly require the applicant to establish that there was "sufficient cause" preventing him from filing the appeal within prescribed time as burden of proof lies squarely on the party seeking condonation. The only justification offered was an unverified claim of illness and mental distress but no medical certificate, prescription or hospital record was placed on file to substantiate said plea.

5. Worthy Tribunal, while dismissing condonation application, also adverted to settled proposition that limitation provisions, though procedural, create valuable rights for the opposite party and cannot be lightly disturbed except upon compelling justification. It is a settled position that a reference under section 133 of the Ordinance of 2001, lies before the High Court on a question of law only and it is the duty of the High Court to answer the question in accordance with a rule of law. For the purpose of section 133 what does a question of law means is amply elaborated by the Worthy Lahore High Court in case of Commissioner Inland Revenue, Lahore v. Coca Cola Pakistan Limited, Lahore (2022 PTD 1400) as: "a question of law means a question as to what the law is on a particular point, which provision of law is applicable to a particular factual situation and what the true rule of law is on a certain matter. In reference jurisdiction, this Court cannot either strike down a provision of law or declare it ultra vires of the Constitution. Any person desirous of a declaration of the kind can very well approach this Court in Constitutional jurisdiction. While exercising reference jurisdiction, this Court confines itself to the questions framed / proposed and gives an opinion in the perspective of the facts as found by the Tribunal and to enter upon the constitutionality of a particular provision is not at all required in such matters." Reliance may also be placed on Messrs Pakistan Television Corporation Limited v. Commissioner Inland Revenue (Legal), LTU, Islamabad and others (2017 SCMR 1136); Muhammad Siddique v. The Commissioner of Income-Tax, Zone-A, Lahore (2001 PTD 1998) and Commissioner Inland Revenue, Legal Division, Regional Tax Office, Islamabad v. Messrs Pak Steel Re-Rolling Mills (2020 PTD 1252).

6. In view of the above position, petitioner had failed to satisfy statutory test, thus, he cannot seek indulgence from this Court under the garb of the present reference. It is also an established position that this Court, in exercise of its jurisdiction under section 133, does not reappraise evidence or substitute factual findings of Tribunal unless a clear question of law arises. The contention that Tribunal should have reopened factual reconciliation or that it misapplied jurisdiction under Section 161 of the Ordinance, does not raise a legal question of general importance but amounts to a challenge on factual appreciation, which lies outside the scope of Section 133 of the Ordinance.

6. Besides, the power to treat a person as an "assessee in default" for failure to deduct tax at source squarely vests in the assessing authority under the Ordinance, subject to appeal and review before prescribed appellate fora. Both the Commissioner (Appeals) and the Tribunal have concurrently upheld the assessment. Such concurrent findings of fact cannot be interfered with in reference proceedings unless demonstrated to be perverse or based on no evidence, which is not the case here. The jurisdiction of this Court under Section 133 of the Ordinance is limited to answering substantial questions of law. It is well-recognized that while courts are inclined towards deciding matters on merits rather than technicalities, this principle does not override statutory limitations unless compelling justification is shown and holding otherwise would render limitation laws otiose and defeat principle of finality of adjudication. The impugned order of worthy Tribunal does not suffer from any legal infirmity or misapplication of law, rather it reflects a judicious exercise of discretion consistent with established jurisprudence that mere negligence, inadvertence or unverified medical excuse cannot constitute "sufficient cause" for condonation.

7. In light of what has been discussed above, this Court is of the view that no question of law, much less a substantial one, arises out of the order of Appellate Tribunal Inland Revenue, Peshawar Bench, dated 06.03.2024 and worthy Tribunal has acted within its jurisdiction, applied correct legal principles and its conclusions are supported by the record. Accordingly, this Tax Reference is answered in negative. UN/63/P Reference dismissed.