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Reference Applications Nos. 226-KB and 227-KB of 1980-81 (Assessment years 1977-78 and 1978-79), decided on 23rd October 1983.

-- Ss. 6 (1) & 33 (4) --Income-tax Ordinance. (XXXI of (1979), S. 136 (1) - Assessee's appeal pending before Appellate Assistant Commissioner ors date of coming into force o ' Income-tax Ordinance, 1979-Sucb appeal to be continued and disposed of as if Ordinance had not come into force-Appeal--Commencement of lis carries with it implication that all rights of appeals then in-force remain available to parties thereto until final disposal of /is-Appeal and second appeal are nothing but steps in furtherance of lis and are, therefore, to be regarded as one legal proceeding--Right of appeal is vested by law as exists on day of commencement of lis and same is to be governed by the then prevailing law and not by law that prevails at date of filing appeal unless so expressly provided in subsequent legislation or it is taken away by necessary implication or intendment-,Held, orders, passed by Appellate Assistant Commissioner on appeals pending before commencement -of Income-tax Ordinance, 1979, were passed under- S. 31, Income-tax Act, 1922 as if Income-tax Ordinance, 1979 had not come into force-Aggrieved party on notice under S. 33 (4), Income tax Act, 1922, could make application on prescribed form to Tribunal to refer to High Court question of law under S. 66 (1) of Income-tax Act, 1922 arising out of such order.

---S. 136-Income-tax Act (XXI of 1922), S. 66 (1)-Provisions of S. 136, Income-tax Ordinance, 1979 not attracted to years under consideration-Limitation-IJoelay--h4ere fact that on account of lack of due care and caution applications were shown to have filed under S. 1360), Income-tax Ordinance, 1979 would not save applicant from legal consequences-provided in S. 66 (1), Income-tax Act, 1922.

Yusuf Sharih for Applicant.

K. Salahuddin for Respondent.

Date of hearing: 22nd January, 1983.

-These Reference Applications have been filed under section 136 (1) of the Income sax Ordinance, 1979 (hereinafter referred to as "tae Ordinance"), instead of section 66(1) of the repealed Income-tax Act, 1922 (hereinafter called "the Act"), by the Commissioner of income-tax, Central----Zone C'. They arise out of the order of the Appellate Tribunal, dated 1st November 1980 passed in I. T. A, No. 982/KB of 1979-80, relating to charge years 1977-78 and 1978-79. The combined order of the Appellate Tribunal was served upon the applicant on 25th March 1981; whereas Reference Applications have been presented on 22nd June 1981, that is, on the 89th day of the date upon which the applicant was served with notice of the order under subsection (4) of section 33. The Ordinance which came into fore with effect from 1st day of July 1979. It repealed the Act. Section 166 of the Ordinance makes provisions for repeal and savings:

"166. Repeal and sayings.--(1) The Income-tax Act, 1922 (XI of 1922) is hereby repealed.

(2) Notwithstanding the repeal of the Income-tax Act, y922 (XI of 1922) and without prejudice to the provisions of section 6 or section 24 of the General Clauses Act, 1897 (X of 1897)-

(a) where a return of income has been filed before the commencement of this Ordinance by a person for any assessment year, proceedings for the assessment of that person for that year may be taken and continued as if this Ordinance had not come into force;

(b) where a return of income is filed after the commencement of this Ordinance otherwise than in pursuance of any notice under section 34 of the repealed Act, by any person for any assessment year ending on or before the thirtieth day of June, 1979, the assessment of the person for that year shall be made in accordance with the procedure specified in this Ordinance;

(c) where in respect of any assessment year-

(i) a notice under section 34 of repealed 'Act, had been issued before the commencement of this Ordinance, the proceedings in pursuance of such notice may be continued and disposed of as if this Ordinance had not come into force;

(ii) any income chargeable to tax had escaped assessment, or had been under assessed or assessed at too low a rate, or had been the subject of excessive relief or the total income of the total world income and the tax payable had been determined under subsection (1) of section 23 of the repealed Act, and no proceedings under section 34 of the said Act, in respect of any such Income arc pending at the commencement of this Ordinance a notice under section 65 may be issued with respect to that assessment year and all the provisions of this Ordinance shall apply accordingly;

(d) in making assessment for any year ending on or before the 30th day of June, 1979, the provision of the repealed Act, relating to the computation of total income and the tax payable shall apply as if this Ordinance had not come into force;

(e) in making any assessment for the year beginning on the first day of June, 1979 the income year shall be deemed to include the period, if arty, comprised into previous year, as defined in clause (11) of section 2 of the repealed Act, for which the assessment would have been made if this Ordinance had not come into force and where such income year exceeds period of twelve months, the total income and the tax pay able shall be prorated on the basis of - the average income of a period of twelve months;

(f) in making any assessment for any year beginning on or before the first day of July, 1979, the provisions of section 18-A and section 26-A of the repealed Act, shall apply as if this Ordinance bad not come into force ;

(g) any proceedings for the imposition of a penalty or prosecution in respect of any assessment completed before the first day of July, 1979, may be initiated and any such penalty may be imposed or prosecution proceedings continued as if this Ordinance had not come into force ;

(h) any proceedings for the imposition of a penalty or prosecution in respect of any assessment for any year ending on or before the thirtieth day of June, 1979, which is completed on or after the first day of June 1979, may be initiated and any such penalty may be imposed or prosecution proceedings continued as if this Ordinance had not come into force;

(i) any proceeding pending on the commencement of this Ordinance before any income-tax authority, the Appellate Tribunal or any Court or Tribunal by way of appeal, reference, revision or prosecution, shall be continued and disposed of as if this Ordinance had not come into force ; .

(j) where the period prescribed for any application, appeal, reference or revision under the repealed Act, had expired on or before the com mencement of this Ordinance, nothing contained in this Ordinance shall be construed as enabling any such application, appeal, reference or revision to be made under this Ordinance by reason only of the fact that a longer period therefor is prescribed or provision is made for extension of time in suitable cases by the appropriate authority."

The assessee's appeal were pending before the learned Appellate Assistant Commissioner. (C) Range---on the date of coming into force of the Ordinance. These were, therefore, in terms of clause (i) of subsection (2) of section 166 of the Ordinance to be continued and disposed of as if the Ordinance had not come into force. The learned Appellate Assistant Commissioner decided these appeals for the charge years 1974-75 to 1976-77 by a combined order, dated 11-1-1979. The assessee filed further appeal against the said order of the learned Appellate Assistant Commissioner before the Appellate Tribunal on 4th March, 1980. The Tribunal vide its order dated 1st November 1980, disposed of these appeals. In appeals relating to the years under reference inter alia a ground against levy of surcharge at the rate of 10% on the amount of tax liability was also raised. In this connection it was contended on behalf of the department that no such plea had been taken before the two officers below and hence it could not be for the first time, entertained by the Tribunal in second appeal. The Tribunal repelling the department's objections held that issue could be taken up in appeal before it even for the first time. The Tribunal, however, in appreciation of the Act, that since the matter was not examined by the authorities below, considered it fit, in the interest of justice to remit the case to the Income-tax Officer with the direction to examine the issue and decide it according to law. It is in respect of the above finding of the Appellate Tribunal that the Commissioner of Income-tax has presented these applications requiring the Appellate Tribunal' to refer a certain common question of law said to arise out of the Tribunal's order.

2. From the above-noted facts it is evident that the assessee's appeals for these two years which were pending before the Appellate Assistant Commissioner at the commencement of the Ordinance were to be continued and decided by him under the provisions of the Act, as if the Ordinance had not come into force. The second appeals against the combined order of the Appellate Assistant Commissioner, dated 12-12-1979, therefore, obviously lad under section 33 of the Act. These were decided by the Tribunal under the provisions of the Act, on 1-11-1930 and the consolidated order of the Tribunal was communicated to the applicant in terms of clause (g) of subsection (4) of the section. It is a well-established proposition of law that the commencement of Its carries with it the implication that all rights of appeals then in force remain available to the parties thereto until the final disposal of the lis. It is also an undisputed proposition that an appeal and. second appeal etc. are nothing but steps in furtherance of the Its and are, therefore, to be regarded as one legal proceedings. A right of appeal, is vested by the law as exists on the day of commencement of the lis and it is to be governed by the then prevailing law and not be the law that prevails at the date of filing the appeal, unless it is so expressly provided in the subsequent legislation or it is taken away by necessary implication or intendment. In the instant case, however, the legislature has on the contrary, specifically provided that any proceedings pending on the commencement of the Ordinance before any Income-tax Authority, the Appellate Tribunal or any Court or Tribunal by way of appeal, reference, revision or prosecution, shall be continued and disposed of as if this Ordinance had not come into force. We would, therefore, even at the cost of repetition mention that in view of the clear provisions of law as contained in clauses (a) and (i) of subsection (2) of section 166 of the Ordinance, we face no encounter to reach the conclusion that the orders passed by the Appellate Assistant Commissioner on appeals pending before the commencement of the Ordinance, were passed under section 31 of the Act, as if the Ordinance had not come into force. Consequently, the Tribunal admitted and decided the second appeals under the provisions of the repealed Act. Upon being served with a notice of the order under subsection (4) of section 33 the assessee or the Commissioner could make an application in the prescribed Form requiring the Appellate Tribunal to refer to the High Court any question of law arising out of such order under the provisions of section 66(I) of the Act. The provisions of section 136 of the Ordinance were not attracted to the years under considera tion. The period for filing the reference application under the Act, is 60 days from the date the order of the Tribunal is communicated to the applicant; whereas these applications have been presented as already stated on the 89th day of the said date. They are thus time-barred by 29 days. No application for condonation of delay either accompanied the reference applications or has been made at any subsequent stage upto the date hereof showing sufficient cause for not filing them in time. The mere fact that the applications have been shown to have been filed under section 136 (1) of the Ordinance would not save the applicant from the legal consequences. At any rate, we are clearly of the opinion that the making of the application under section 136 is on account of lack of due care and caution inasmuch as the legal provisions, as already stated, are absolutely clear and free from ambiguity.

3. In the result, the applications are dismissed hereby, in limine, as barred by limitation.

M. Z. M. Application dismissed.

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