clerical mistakes only can be correct but discussion on anything is not allowed .

کیس *کمشنر ان لینڈ ریونیو بمقابلہ میسرز رشید اینڈ ساقب ٹریڈنگ کمپنی* میں، لاہور ہائی کورٹ نے ایک دلچسپ قانونی تنازعہ کا فیصلہ کیا۔

اس کہانی کا آغاز اس وقت ہوا جب ٹربیونل نے ایک کمپنی کو ٹیکس کی عدم ادائیگی پر ڈیفالٹر قرار دیا۔ کمپنی نے اس فیصلے کو چیلنج کیا، اور بعد میں تصحیح کی درخواست دائر کی، جس میں کہا گیا کہ شو کاز نوٹس غلط قانونی دفعہ کے تحت جاری کیا گیا تھا۔ ٹربیونل نے تصحیح کی درخواست قبول کر لی اور اپنا سابقہ حکم کالعدم کر دیا۔

محکمہ ان لینڈ ریونیو نے اس فیصلے کو چیلنج کیا، arguing that ٹربیونل نے اپنے دائرہ اختیار سے تجاوز کیا ہے کیونکہ تصحیح کا دائرہ صرف واضح اور ظاہری غلطیوں تک محدود ہے۔

ہائی کورٹ نے یہ فیصلہ دیا کہ ٹربیونل کا تصحیح کے تحت اپنا حکم واپس لینا قانونی حدود سے باہر تھا۔ عدالت نے تصحیح کے حکم کو کالعدم قرار دے دیا اور محکمہ کے حق میں فیصلہ سنایا۔

یہ کیس اس بات کی مثال ہے کہ قانونی تصحیح کی درخواستیں کس طرح مخصوص حدود اور دائرہ اختیار کے اندر رہ کر ہی قبول کی جا سکتی ہیں۔

2020 P T D 782

[Lahore High Court (Multan Bench)]

Before Abid Aziz Sheikh and Muzamil Akhtar Shabir, JJ

COMMISSIONER INLAND REVENUE

Versus

Messrs RASHID AND SAQIB TRADING COMPANY

Tax Reference No.06 of 2018, decided on 14th November, 2019.

(a) Income Tax Ordinance (XLIX of 2001)---

----S. 221---Rectification of mistake---Scope---Department assailed order of Appellate

Tribunal whereby rectification application of respondent/assessee was accepted and earlier

order passed by Appellate Tribunal was set aside---Validity---Original order passed by

Appellate Tribunal showed that it had assessed the matter in detail and after applying its

judicial mind had not agreed with the contentions of the respondent/assessee and had found

the respondent to be an assessee in default---Said order could not be rectified under S. 221,

Income Tax Ordinance, 2001 while considering the same as an error on the face of record---

Had the respondent felt aggrieved due to some legal defect in that order, the same could only

be challenged before the next higher forum---Impugned order was not sustainable, being

beyond the scope of S. 221 of the Income Tax Ordinance, 2001---Reference was allowed.

(b) Income Tax Ordinance (XLIX of 2001)---

----Ss. 221 & 133---Rectification of mistake---Reference to High Court---Maintainability---

Scope---Where rectification application is dismissed by Appellate Tribunal, the Reference

application before High Court is not maintainable because the order of the Tribunal on such

application does not merge into final order---Where the rectification application is allowed

and the original order of the Tribunal is set aside then the said order will become part of the

original order and reference application will be maintainable before High Court.

Messrs Hong Kong Chinese Restaurant, Main Boulevard Gulberg, Lahore v. Assistant

Commissioner of Income Tax, Circle 6, Lahore and others 2002 PTD 1878 rel.

----S.221---Rectification of mistake---Scope---Scope of S.221, Income Tax Ordinance, 2001

is restricted to rectify the mistake apparent from the record---Expression "mistake apparent

from the record" as used in S.221 means that "error" or "mistake" is so manifest and clear

which if permitted to remain on record may have material effect on the case---Where defect

in order has direct nexus with the question of determination of rights of parties and also

affects their substantial rights or causes prejudice to their interest, such defect in order is not

a mistake apparent on record to be rectified under S.221 but it can only be challenged before

higher forum.

Commissioner of Income Tax/Wealth Tax v. Muhammad Naseem Khan 2013 PTD

2005 rel.

Rasheed Ahmad Joiya Legal Advisor, FBR for Petitioner.

Malik Mumtaz Hussain Khokhar for Respondent.

ORDER

In this reference application under Section 133 of the Income Tax Ordinance, 2001

("Ordinance"), the following questions of law are raised arising out of the Appellate Tribunal

Inland Revenue, Lahore Bench ("Tribunal") order dated 14.12.2017:-

(i) "Whether in the facts and circumstances of the case the learned ATIR was justified to

rectify order under section 221 of the Income Tax Ordinance, 2001 ignoring the

definition of the prescribed person in terms of section under section 153(9)(g) of the

Income Tax Ordinance, 2001 prior to its amendment through Finance Act, 2010?"

(ii) "Whether the Appellate Tribunal has not travelled beyond the scope of its powers and

jurisdiction by reviewing its earlier order under the garb of rectification after

entertaining long drawn arguments which is not permissible under the scope of

section 221 of the Income Tax Ordinance, 2001?"

(iii) Whether an order passed by the Appellate Tribunal consciously with application of

mind after minutely the facts and circumstances of the case and law applicable can be

subsequently rectified by the Tribunal under the provision of section 221 of the

Income Tax Ordinance, 2001?"

2. The relevant facts are that the learned Tribunal vide order dated 05.04.2017 dismissed

the appeal of the respondent-assessee, however, on rectification application under section

221 of the Ordinance, the said order was set aside through impugned order dated 14.12.2017.

3. Learned counsel for the petitioner submits that the order passed in appeal could not be

set aside through rectification application. Learned counsel for the respondent, on the other

hand, submits that this reference application is not maintainable against the order passed on

miscellaneous application and further, the error being apparent on the record the same was

correctly rectified by the Tribunal.

4. Arguments heard. So far as the question of maintainability of this reference

application is concerned, the learned Division Bench of this Court in the case of Messrs

Hong Kong Chinese Restaurant, Main Boulevard Gulberg, Lahore v. Assistant

Commissioner of Income Tax, Circle 6, Lahore and others (2002 PTD 1878) held that where

rectification application is dismissed by Tribunal, the reference application before this Court

is not maintainable because the order does not merge into final order. However, if

rectification application is allowed and the original order of the Tribunal is set aside, then

said order will become part of the original order and reference application will be

maintainable before this Court. In the present case, the rectification application being

allowed and original order of the Tribunal being set aside, this reference application is

maintainable in view of the law settled in the afore-noted judgment.

5. On merits of the case, the record shows that for tax year 2010-2011, the respondent

was found to be an assessee in default by the Tribunal in its original order dated 05.04.2017

on the basis of its declared turnover of Rs.50,00,000/- for tax year 2009. The plea of the

respondent that revised return of tax year 2009 was filed on 09.08.2012, where the turnover

was reduced to Rs.49,811,430/- was not accepted by the Tribunal, as same was revised after

service of show-cause notice and also after the returns filed for tax year 2010-2011.

However, on rectification application, the above-said finding of the Tribunal was reversed on

the ground that show-cause notice was issued under wrong provision of law.

6. The scope of Section 221 of the Ordinance is restricted to rectify the mistake apparent

from the record. The expression "mistake apparent from the record" as used in Section 221 of

the Ordinance means that "error" or "mistake" is so manifest and clear which if permitted to

remain on record may have material effect on the case. However, where defect in order has

direct nexus with the question of determination of rights of parties and also effect their

substantial rights or cause prejudice to their interest the said defect in order is not a mistake

apparent on the record to be rectified under Section 221 of the Ordinance but same can only

be challenged before higher forum. In this regard, reliance is also placed on the case of

Commissioner of Income Tax/Wealth Tax v. Muhammad Naseem Khan (2013 PTD 2005).

7. Perusal of the original order passed by the Tribunal dated 05.04.2017 shows that the

learned Tribunal has assessed the matter in detail and after applying its judicial mind did not

agree with the contentions of the assessee and found the respondent to be an assessee in

default. The said order could not be rectified under Section 221 of the Ordinance being an

error on face of record but if the respondent was aggrieved due to some legal defect in the

order, the same could only be challenged before the next forum. In view of above discussion,

the impugned order dated 14.12.2017 is not sustainable being beyond the scope of Section

221 of the Ordinance.

8. For reasons recorded above, this reference application is allowed and questions raised

are answered accordingly in favour of the petitioner-department and against the respondentassessee.

9. Office shall send the copy of this order under the seal of the Court to the learned

Tribunal as required under Section 133(5) of the Ordinance.

SA/C-24/L Reference allowed.

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