M/S Askari Bank Limited, Islamabad | Appellant | |
Vs | ||
Commissioner Inland Revenue, Zone-II, LTU, Islamabad | Respondent | |
Appellant by | Ms. Sadia Nazir, FCA | |
Respondent by | Mr. Faheem Sikandar, DR | |
Date of hearing | 20.08.2019 | |
Date of order | 20.08.2019 |
ORDER
M. M. AKRAM (JUDICIAL MEMBER): The titled appeal has been filed by the
appellant/taxpayer against an Order-in-Appeal No.541/2018 dated 29.06.2018
passed under section 221 of the Income Tax Ordinance, 2001 (“the Ordinance”) by
the Commissioner Inland Revenue (Appeals-I), Islamabad for the Tax Year 2016 on
the grounds as set forth in the memo of appeal.
2. That the brief facts
culled out from the record are that the appellant is a banking company which
derives income from running a commercial bank. The return of total income for
the Tax Year 2016 was e-filed on 16.12.2016 and the assessment stood finalized
under section 120(1) of the Ordinance by the fiction of law. Subsequently, the
deemed assessment order was amended under section 122(5A) read with section
122(4) of the Ordinance vide order dated 06.06.2017. The appellant did not
prefer an appeal against the aforesaid order under section 127 of the Ordinance
but opted to file a rectification application under section 221 of the
Ordinance. The assessing officer vide order dated 20.06.2017 rectified the
mistake to the extent of the tax demand created under section 21(c) of the
Ordinance and declined to rectify the alleged mistake on deduction of advertisement
and publicity expenses by observing that the request of the appellant cannot be
entertained as it involved re-ascertaining and re-investigation the factual
position which cannot come within the scope of section 221 of the Ordinance.
Feeling aggrieved of this treatment, the appellant preferred an appeal before
the learned Commissioner Inland Revenue (Appeals) who vide order dated
29.06.2018 confirmed the treatment meted out by the assessing officer. Now the
appellant has assailed the impugned appellate order before this forum on a number
of grounds.
3. This case came up for hearing on 20.08.2019. Learned AR of the appellant reiterated the contentions already submitted in the grounds of appeal. On the other hand, learned DR opposed the appeal on the ground that learned Commissioner (Appeals) has passed a speaking order and there is no illegality or lacuna in his order. He, therefore, prays for the rejection of the appeal.
4. The
orders of both the authorities have been examined in detail and perused the
available record as well keeping in view the submissions advanced by the rival
parties. We have not been able to find out any substance in the instant appeal.
The perusal of the grounds of appeal taken by the appellant in the memo of the present
appeal reveals that the main grounds relate to the order passed under section
122(5A) of the Ordinance against which admittedly the appellant did not file an
appeal before the Commissioner Inland Revenue (Appeals) and therefore, the said
order is not subject matter of appeal before this tribunal. It is settled law
that this tribunal cannot go beyond the subject matter of appeal impugned
before it. Hence, the findings were given by the assessing officer in the
original amended assessment order dated 06.06.2017 had attained finality. This
fact was confronted to the learned AR of the appellant but she could not
satisfy this tribunal with any plausible explanation. Further, the perusal of
the orders of the Assessing Officer and the Commissioner Inland Revenue
(Appeals) read with the rectification application filed by the appellant would
make it clear that exercise undertaken by the Assessing Officer under section
221 of the Ordinance was not simply in respect of a mistake apparent on the
face of the record within the contemplation of section 221 ibid rather it was re-assessment
of the tax liability of the appellant on the basis of the record submitted
along with rectification application. The expression “mistake apparent on
record” means the error or mistake so manifest and clear which, if is permitted
to remain on record, may have a material effect on the case. But an error of
fact or law, which having direct nexus with the question of determination of
rights of parties affecting their substantial rights, or causing prejudice to
their interest, is not a mistake apparent on the record to be rectified under section
221 ibid. The mistake must be of the nature, which is floating on the surface
of the record and must not involve, an elaborate discussion or detailed probe
or process of determination. The scope of rectification application is very
limited keeping in view the law laid down by the Apex Court of Pakistan in the
judgments reported as PLD 1964 SC 410
and CIT
Karachi Vs Shadman Cotton Mills Ltd, Karachi (2008 PTD 253) and CIT
Vs National Foods Laboratories (1992 SCMR 687) wherein it was held
as under:
“It is well-settled law that rectification jurisdiction is a very limited jurisdiction, which can only be exercised for rectifying the mistake, which is apparent on record or which is floating on the surface of the record. This jurisdiction cannot be assumed to set aside a well-reasoned order, which is passed after due deliberation, application of mind, and due consideration of relevant provisions of law and the applicable case law.”
We do not find any error or illegality in the
orders passed by both the authorities below while rejecting the rectification
application moved by the appellant. The Hon'ble Supreme Court of Pakistan, in
the case of M/s National Foods v. CIT, cited supra while defining the scope of
rectification, has held that a mistake should be apparent from the record,
floating on the surface, and may not require any investigation or further evidence.
It has been further held that a mistake which is sought to be rectified must be
so obvious and apparent from the record that it may immediately strike on the
face of it. It may not be something which may be established by a long drawn
process of reasoning on issues on which there could be conceivably two views or
opinions. We may further observe that the scope of rectification is limited to
the extent of rectification of an" error apparent from the record"
hence the said provision cannot be invoked as an alternate or substitute of an
appeal, revision, or review. In the case titled CIT Karachi Vs Shadman Cotton
Mills Ltd, Karachi (2008 PTD 253) it has been held that the
question as to whether certain expenses can or cannot be deducted for the
purposes of assessment is a material question which cannot be brought within
the ambit of rectification.
From
the various judgments of the Supreme Court above referred to and other High
Courts, it is clear that the power under section 221 of the Ordinance is
not to review its earlier order but only to amend it to rectify any mistake
apparent from the record. What can be termed as "mistake apparent"?
"Mistake" in general means to take or understand wrongly or
inaccurately, to make an error in interpreting, it is an error, a fault, a
misunderstanding, a misconception. Mistake in taxation laws has a special
significance. It is mostly subjective and the dividing line is thin and
indiscernible. "Apparent" means visible, capable of being seen,
easily seen, obvious plain, open to view, evident, appears, appearing as real
and true, conspicuous, manifest, seeming. The plain meaning of the word
"apparent" is that it must be something which appears to be ex facie
and incapable of argument and debate. If such a "mistake apparent on the
face of record" is brought to the notice, section 221 empowers the
Authorities and Tribunal to amend the order passed under section 221. Amendment
of an order does not mean the obliteration of the order originally passed and
its substitution by a new order.
What
is a mistake apparent on the face of the record or where does a mistake cease
to be a mere mistake, and become mistake apparent on the face of the record is
rather difficult to define precisely, scientifically, and with certainty. An
element of indefiniteness is inherent in its very nature and it must be
discernible from the facts of each case by a judiciously trained mind. Mere
existence of a mistake or error would not per se render the order amenable for
rectification, but such a mistake must be one which must be manifest on the
face of the record.
In
view of the ratio of the decision as cited and extracted above, we find that
there is no mistake apparent on the record, the appellant has failed to point out any legal or factual infirmity in
the impugned appellate order and has not put forth any documentary or material
evidence to rebut the observations and findings of the learned Commissioner
(Appeals). We find no infirmity in the impugned order of the learned
Commissioner (Appeals) and do not feel persuaded to interfere with the
treatment meted out by the first appellate authority. Accordingly, the impugned
order is maintained and the appeal under reference is dismissed being devoid of
merit.
5. This order consists of
(05) pages and each page bears my signature.
Sd/- (M.M. AKRAM) JUDICIAL MEMBER | |
Sd/- (NADIR MUMTAZ WARRAICH) ACCOUNTANT MEMBER |
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