Ch. IRSHAD AHMAD VIRK vs COMMISSIONER APPEALS INCOME TAX and others
The petitioner filed a writ petition under Article 199 of the Constitution of Pakistan 1973, challenging the validity of recovery notices and seeking a declaration that his income tax appeal for the year 1994-95 had been accepted by operation of law. The core legal question was whether the failure of the Commissioner of Income Tax (Appeals) to decide an appeal within the three-month period prescribed by Section 132(5) of the Income Tax Ordinance 1979 automatically results in the appeal being deemed accepted, or whether such relief is contingent upon compliance with mandatory procedural requirements. The Lahore High Court held that the deeming provision in Section 132(5) is not self-executing. It ruled that the appellant must strictly comply with the mandatory pre-conditions set out in Section 132(6) of the Income Tax Ordinance 1979, specifically the requirement to serve a written notice personally on the Commissioner at least thirty days before the expiration of the three-month period. As the petitioner failed to serve this mandatory notice, the petition was dismissed.
- Does the failure to decide an income tax appeal within the three-month period prescribed by Section 132(5) of the Income Tax Ordinance 1979 automatically result in the appeal being deemed accepted?
- Is the service of a written notice under Section 132(6) of the Income Tax Ordinance 1979 a mandatory pre-condition for invoking the deeming provisions of Section 132(5)?
- Does the fact that an appeal has been fixed or heard by the Commissioner of Income Tax (Appeals) dispense with the requirement to serve a formal notice under Section 132(6) of the Income Tax Ordinance 1979?
- Article 199, Constitution of Pakistan 1973
- Section 132(5), Income Tax Ordinance 1979
- Section 132(6), Income Tax Ordinance 1979
- Section 132(1), Income Tax Ordinance 1979
' AHMAD SAEED AWAN, J.--The petitioner through this writ petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, seeks that the notice, dated 10-9-1995 be declared as null and void, of no legal effect and further that respondent No,3 be directed to give appeal effect under the deeming provisions of subsection (5) of section 132 of the Income Tax Ordinance, 1979 to the assessm ent year 1994-95.
2. Briefly facts of the case are that the petitioner's assessment for the year 1994-95 was made under detailed scrutiny at Rs,85,920 against the declared income of Rs,55,920, the petitioner filed an appeal against the said impugned assessment order before respondent No,1 Commissioner of Income Tax (Appeals) on 12-2-1995; the appeal was fixed and heard on 18-6-1995 and since then no decision on appeal has been made by the respondent No,1 Commissioner of Income Tax (Appeals) within the prescribed period; hence this petition.
3. The learned counsel who is an advocate in this case/petitioner contends that in view of subsection (5) of section 132 of the Income Tax Ordinance, 1979, the order by respondent No,1 has not been passed within the prescribed period, hence the appeal has. Been accepted, and the addition made to the declared version by the respondent No,3 stands deleted, the notices issued to the petitioner for recovery by the respondent are illegal, unjust and not sustainable under the law.
4. The learned counsel for the respondents conversely controverted the arguments of learned counsel referring to subsection (6) of section 132 of the Income Tax Ordinance.
5. I have heard the arguments advanced by the learned counsel for both the sides at some length and perused the record with their able assistance.
6. Section 132 of the Income Tax Ordinance was amended by the Finance Act, 1991 and subsections
(5) and (6) were inserted; whereby a time limit of three months has been fixed for disposal of appeals; in case no order is made before the expiration of three months from the end of the month in which the appeal is presented; under subsection (5) of section 132, the relief sought through the said appeal shall be deemed to have been given; subsection (6) of section 132 of the Income Tax Ordinance laid down that subsection (5) of section 132 shall not apply unless a notice by the appellant or his representative is served on the person of the Appellate Assistant Commissioner/C.I.T./Appeals not less than thirty days before the expiration of period stating that the order on the appeal has not been made.
7.
8. #TBS
9. PTD
10. #TBE
11. The contention of learned counsel that the conditions laid down, in subsection (6) of section 132 of the Ordinance is not attracted in a case wherein either the appeal has been fixed or heard as it tantamount to a notice under subsection (6) of section 132 of the Income Tax Ordinance is misconceived and devoid of merits. Subsection (6) of section 132 of the Ordinance provides mandatory pre-conditions prior to the operation of proviso of subsection (5) to section 132 of the Ordinance. Following three conditions have been imposed by subsection (6) of section 132 of the Ordinance, firstly, no order under subsection (1) has been made before the expiration of period of three months; secondly, the notice shall be given by the appellants; "Notice" means notice in writing providing the date of filing of appeal and date of expiry of period of three months prescribed in subsection (5) of section 132 of the Ordinance and thirdly; the said notice shall be served on the appellant Additional Commissioner/C.I.T. Personally not less than thirty days before the expiration of the period of three months; these conditions are mandatory in nature.
12. In case in hand even the appeal was neither ,fixed and heard within the prescribed period of three months and the order has yet not been passed by the respondent No,1, Commissioner of Income-tax (Appeals) though the period prescribed under subsection (5) of section 132 of the Ordinance has been expired while the mandatory provisions of subsection (6) of section .132 of the Income Tax Ordinance have not complied by the petitioner as he failed to serve a notice personally. On the Commissioner of Income-tax (Appeals) as prescribed by subsection (6) of section 132 of the Ordinance. It is an obligatory duty of appellant to comply with the mandatory provisions of subsection (6) of section 132 of the Income Tax Ordinance to serve a notice personally on the Commissioner of Income Tax (Appeals) irrespective of the .Fact whether the appeal has been fixed, heard or not.
13. The upshot of the above discussion is that the petition lacks merits and is dismissed accordingly. There shall be no order as to costs.
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