IN THE APPELLATE TRIBUNAL INLAND REVENUE, BENCH_I,
ISLAMABAD
MA (R) No.34/IB/2020
In ITA No.521/IB/2017
(Tax Year 2011)
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O R D E R
M M AKRAM (Judicial Member):- Through this titled miscellaneous application, the applicant department has sought rectification under section 221 of the Income Tax Ordinance, 2001 (“the Ordinance”) in the order passed by this Tribunal in MA (R) No.43/IB/2018 in ITA No.521/IB/2017 for the Tax Year 2011 dated 15.01.2020 on the grounds as enumerated in the said application.
2. Brief background of the case is that the applicant taxpayer i.e. M/s M. Usman Traders, Rawalpindi being an individual, derives income as distributor. The taxpayer filed the return for the said tax year which was deemed to be assessed u/s 120 of the Income Tax Ordinance, 2001 (“the Ordinance”). However, during examination of assessment record for the said year, it was noted that the said deemed assessment is erroneous and prejudicial to the interests of revenue warranting action u/s 122(5A) as the taxpayer had not fully discharged its minimum tax liability u/s 113 of the Ordinance. Therefore, amendment proceedings were initiated by way of issuance of show cause notice dated 17.03.2016 against which explanation tendered by the taxpayer was treated unsatisfactory. Resultantly, the proceedings culminated in passing of amended assessment order dated 28.04.2016 creating a tax demand of Rs.2,944,905/-. The applicant taxpayer filed first appeal before the learned CIR(A) who vide order dated 13.12.2016 disposed of the appeal of the taxpayer and being aggrieved with the order passed by the CIR(A), the appeal was filed before this Tribunal bearing ITA No.521/IB/2017, pertaining to Tax Year 2011 on various grounds. The Tribunal after hearing both the parties has decided the appeal vide order dated 12.04.2018. The Applicant taxpayer felt aggrieved with the said order, filed the rectification application before this Tribunal for the tax year 2011 under section 221 of the Ordinance which was dismissed vide order dated 15.01.2020. Now, again the applicant taxpayer filed rectification application on the same cause already considered and dismissed vide order dated 15.01.2020.
3. This case came up for hearing on 27.01.2021. At the very outset, the learned AR apprised that the reference is also pending before the Honorable Islamabad High Court against the main order. Inspite of the fact, he reiterated the contentions already submitted in the grounds of miscellaneous application as set forth in the memo of application. On the other hand, learned DR opposed the miscellaneous application on the ground that pending the reference application before Honorable Islamabad High Court the instant application is not maintainable.
4. We have heard the arguments of both the parties and perused the available record. Undisputedly, the matter is now sub-judice before the Hon’ble Lahore High Court. The Applicant has availed the statutory remedy by filing reference application under section 133 of the Ordinance against the same cause. The specific point requiring determination by this Tribunal would be as to whether two parallel remedies could be availed by the Applicant simultaneously on the same cause? We are afraid of this practice of seeking remedy in reference application by the department and simultaneously filing application for rectification of an order is a mockery of law notwithstanding the fact that section 221 of the Ordinance is restricted to rectifying a mistake which must be apparent from the record and its scope cannot be construed as that of a statutory right of remedies provided under sections 127, 131 and 133 of the Ordinance of 2001. It is an established principle of law that when an appeal/reference is pending before a superior forum, an application for rectification cannot be entertained by a subordinate forum as a rule. The Appellate Tribunal Inland Revenue (ATIR) is a forum, subordinate to the High Court under the Ordinance. Reliance may be placed on Civil Writ Petition No.25152 of 2013 titled as Industrial Equipment Company Chandigarh Vs Income Tax Appellate Tribunal and another decided on 18.11.2013 (Haryana High Court).
Although the Applicant taxpayer at least had two concurrent remedies, i.e. reference application and rectification application under sections 133 and 221 of the Ordinance respectively to assail the order of this Tribunal and one does not exclude the other, but it was open to it to choose either of the two and the moment remedy of reference application was availed, the doors of the ATIR to receive/entertain the rectification application under section 221 were closed to decide both the remedies simultaneously or one after the other. If duplication is allowed, then there would be no end of litigation, which may also cause conflicting judgments and would be sheer abuse of process of law. The Apex Court while dealing with a similar proposition in a case titled as Mrs. Amina Bibi vs. Nasrullah, (2000 SCMR 296) had discussed the remedies and panorama available to the litigant for his redressal against an ex-parte decree and para 7 thereof being relevant is given below: -
“Where a suit has been decreed ex parte, various remedies are available to an aggrieved person for redress of his grievance. Firstly, an application under Order IX rule 13 CPC; secondly, an appeal from the ex parte decree under section 96 (2), CPC; a petition for review under section 114 read with Order XLVII and a civil suit on the ground of fraud and want of jurisdiction. The latter remedy is now substituted by section 12 (2) CPC. Here, the petitioner has exhausted her remedies by filing an application under Order IX rule 13 CPC and, therefore, on the same ground she cannot be permitted to re-agitate the same issue by means of a fresh petition under section 12 (2) CPC.”
The Apex Court rendered a comprehensive judgment and his Lordship Mr. Justice Mushir Alam, speaking for it in the case reported as Trading Corporation of Pakistan Vs. Devan Sugar Mills Limited and others (PLD 2018 SC 828) discussed the doctrine of election in depth and finally held that once the litigant opted to avail one out of the provided remedies, then it generally could not be permitted to initiate the other one. The relevant part of his lordship’s conclusion being squarely applicable to the facts of the case in hand is reproduced hereunder:
“…. …The moment suitor intends to commence any legal action to enforce any right and or invoke a remedy to set right a wrong or to vindicate an injury, he has to elect and or choose from amongst host of actions or remedies available under the law. The choice to initiate and pursue one out of host of available concurrent or co-existent proceedings/actions or remedy from a forum of competent jurisdiction vest with the suitor. Once choice is exercised and election is made then a suitor is prohibited from launching another proceeding to seek a relief or remedy contrary to what could be claimed and or achieved by adopting other proceeding/action and or remedy, which in legal parlance is recognized as doctrine of election, which doctrine is culled by the courts of law from the well-recognized principles of waiver and or abandonment of a known right, claim privilege or relief as contained in Order II, rule (2) C.P.C., principles of estoppel as embodied in Article 114 of the Qanun-e-Shahadat Order 1984 and principles of res-judicata as articulated in section 11, C.P.C. and its explanations. Doctrine of election apply both to the original proceedings/action as well as defences and so also to challenge the outcome on culmination of such original proceedings/action, in the form of order or judgment/decree C.R.No.1339/2017 10 (for illustration it may be noted that multiple remedies are available against possible outcome in the form of an order/judgment/decree etc. emanating from proceedings of civil nature, which could be challenged/defended under Order IX, rule 13 (if proceedings are ex-parte), section 47 objection to execution), section 114(by way of review of an order), section 115 (revision), under Order XXI, rules 99 to 103 C.P.C. and section 96 C.P.C. (appeal against the order/judgment) etc. Though there is no bar to concurrently invoke more than one remedy at the same time against an ex-parte order/judgment. However, once election or choice from amongst two or more available remedy is made an exhausted, judgment debtor cannot ordinarily be permitted subsequently to venture into other concurrently or coexisting available remedies. With more certainty it was further concluded that:- Giving choice to elect remedy from amongst several coexistent and or concurrent remedies does not frustrate or deny right of a person to choose any remedy, which best suits under the given circumstances but to prevent recourse to multiple or successive redressal of a singular wrong or impugned action before the competent forum/court of original and or appellate jurisdiction, such rule of prudence has been evolved by courts of law to curb multiplicity of proceedings. As long as a party does not avail of the remedy before a Court of competent jurisdiction all such remedies remain open to be invoked. Once the election is made then the party generally, cannot be allowed to hop cover and shop for one after another coexistent remedies. In an illustrative case this court in the case of Mst. Fehmida Begum v. Muhammad Khalid and others (1992 SCMR 1908) encapsulated the doctrine of election as follows: -
“However, it is one thing to concede a power to the statutory forum to recall an order obtained from it by fraud, but another to hold that such power of adjudication or jurisdiction or jurisdiction is exclusive so as to hold that a suit filed in a civil Court of general jurisdiction is barred. I am therefore in agreement with my brother that a stranger to the proceedings, in a case of this nature has two remedies open to him. He can either go to the special forum with an application to recall or review the order, or file a separate suit. Once he acts to invoke either of the remedies, he will, on the general principles to avoid a conflict of decisions, ultimately before the higher appellate forums, be deemed to have given up and forfeited his right to the other remedy, unless as held in Mir Salah-ud-Din v. Qazi Zaheer-ud-Din PLD 1988 SC 221, the order passed by the hierarchy of forums under the Sindh Rented Premises Ordinance, leaves scope for approaching the Civil Court.”
The ratio of the above stated case has also recently been applied by the Division Bench of the Hon’ble Lahore High in the case titled as Daan Khan (deceased) through legal heirs Vs Assistant Collector (Notified), (2019 CLC 483). In this case while deciding the Intra Court Appeal, it was observed that: -
“Now a question arises as to whether after availing the remedy for restoration of earlier constitutional petition, the appellants could resort to the other remedy provided in Rule 4 of Order IX CPC. Answer to this question is available in a recent judgment handed down by the Hon’ble Supreme Court of Pakistan in the case of “Trading Corporation of Pakistan versus Devan Sugar Mills Limited and others” (PLD 2018 Supreme Court 828) wherein it has been held that “……………………..” On the basis of said precedent the conclusion is that the appellant’s second constitutional petition i.e. W.P.No.104-R of 2010, giving rise to instant appeal, was not competent.”
Similarly, recently the Hon’ble Islamabad High Court in the case titled as Rani Waseem Prop:S.S. Enterprises Vs The Appellate Tribunal Inland Revenue etc bearing W.P.No.3319 of 2014 vide order dated 16.09.2020 it was observed that: -
“4……. The petitioner company by availing the remedy provided under the Ordinance of 2001 filed separate tax reference i.e Tax Reference nos.128/2014, 129/2014 and 130/2014. The said references are pending this Court. The impugned order, dated 29.01.2014, was passed by the learned Tribunal and the petition filed for seeking rectification under section 221 of the Ordinance, 2001 was dismissed. Firstly, the rectification under section 221 of the Ordinance, 2001 could not have been filed and entertained when remedy before this court had already been availed and secondly, since the petition seeking rectification was dismissed, therefore, consolidated judgment dated 02.10.2013, passed by the learned Tribunal remained unaffected.” (Emphasis supplied”)
The aforesaid principle has also been applied over the years in the Indian jurisdiction as well. Some of the leading cases in this regard are discussed hereunder: -
Jai Singh Vs Union of India and others (AIR 1977 SC 898), the apex Court held that the appellant cannot pursue two parallel remedies in respect of the same matter at the same time. Chemech Engineers Pvt. Ltd. vs The Director Of Industries And others (AIR 1994 Mad 14)
"It has also been brought in our notice that after the dismissal of the writ petition by the High Court, the appellant has filed a suit, in which he has agitated the same question which is the subject matter of the writ petition. In our opinion, the appellant cannot pursue two parallel remedies in respect of the same matter at the same time."
Keeping in view the judicial consensus on the issue at hand, it would be safe to conclude that the Applicant taxpayer at the most could select one of the remedies provided by the statute, but it was not its choice to avail/press one after the other or simultaneously.
5. In the light of the facts and circumstances of the case and ratio decided by the Hon’ble Superior Courts, the instant miscellaneous application is rejected being not maintainable.
6. This order consists of (05) pages and each page bears my signature.
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