2009 PTD 536 (PLP)

This reference application has been filed by the Commissioner of Income Tax, Faisalabad Zone, Faisalabad. The question is as follows:-- "Whether on the facts and in the circumstances of the case, the learned Tribunal was justified to reject departmental miscellaneous application when additions of taxable allowances made under the heads Medical Allowance and Honorarium were incorrectly deleted and the mistake was apparent from the record?"

2. The case was fixed for hearing earlier on 6-10-2008 when adjournment was sought on behalf of the petitioner, which was allowed. Today, no one is in attendance. The case, therefore, is decided on the basis of the merits of this case. Above question, which statedly arises, is on the basis of the order of rectification recorded under section 133(4) of the Income Tax Ordinance 2001, in R.A.No.21/LB of 2003 for assessment year 1996-97. Notwithstanding the fact that the reference is defective on the face of it, as the same should have been filed under the provisions of the Income Tax Ordinance 1979, even otherwise, this Court in a number of cases, have already held that no reference lies against the order of the Income Tax Appellate Tribunal, passed on miscellaneous application refusing to rectify the claimed mistake. This has been so held in an unequivocal terms in a chain of judgments including Messrs Hong Kong Chinese Restaurant Main Boulevard Gulberg, Lahore v. Assistant Commissioner of Income Tax Circle 6 Lahore and another (2002 PTD 1878). An appeal filed by the assessee in the case mentioned supra was rejected under section 135 of the late Ordinance. His application for rectification of that order was also refused by the Tribunal. Speaking for the Court one of us (Nasim Sikandar, J) observed that by making a specific reference to section 135 of the late Ordinance in the reference provisions of section 136, the legislature clearly restricted the scope of reference to this Court only to the questions of law, which arise out of that order and from none else.

3. This Court while finally deciding the issue also relied upon orthodox view that no reference under section 66(A) of the late Income Tax Act, 1922 to the High Court was competent, even if the Tribunal had rectified its earlier order. The view was affirmed by Madras High Court in re: Commissioner of Income Tax Madras v. O.RM.SV Sevuqan (1948) Vol. XVIITR

59. Not only that the above view is based upon the exact language of law which obviously require strict interpretation. Even otherwise, if interpretation of the department is accepted, then new complications shall emerge. The limitation provided in law for filing reference application, therefore, also shall come into picture. Since the miscellaneous application has been rejected, obviously no life can be granted to the earlier order, which has expired its limitation to file reference against the same. It is in fact the earlier order of the ITAT, which has been sought to be rectified, against which a reference could be filed, if some question of law was to arise from the same. The rectification application in such like situation, therefore, would be considered as nothing beyond an attempt to circumvent the expired limitation. However, if the learned Tribunal itself, suo motu would have amended the order or the application of the petitioner was accepted, the rectification order would become a part of the original order.

4. A similar view has subsequently been adopted by a Division Bench of Karachi High Court in re: Commissioner of Income Tax v. Ateed Riaz (2002 PTD 570).

5. This Court, therefore, is of the considered view that no reference application can be filed against the order of refusal of rectification by the IT AT, hence, the same is dismissed in limine. S.A.K./C-2/L Reference dismissed in limin