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I.T.A No. 2650/LB of 1985-86, decided on 28th September, 1986.
---S. 59(1) & First Sched., Part III--Income-tax Appellate Tribunal Rules, 1981, R. 12--Appeal--Procedural and technical lapse in filing appeal does not affect merits of appeal--While sending copies of Memorandum and Grounds of Appeal Department did not strictly adhere to provisions of R.12 of Income-tax Appellate Tribunal Rules 1981 although copies were duly delivered to assessee immediately after filing of appeal and before date when appeal came up for hearing before Tribunal--Interest of assessee had not in any way been prejudiced as he had become fully aware of grounds--Appeal, held, could not be rejected because of procedural or technical lapse which did not affect merits of appeal.
Muhammad Akram v. Capt. C.A. Saeed, Deputy Commissioner and Election Tribunal, Gujrat P L D 1965 (W.P.) Lah. 703; Malik Abdul Aziz v. West Pakistan Publishing Company P L D 1985 (W.P.) Lah. 82; Mian Abdul Majid v. The Chief Administrator of Auqaf, West Pakistan, Lahore P L D 1972 Lah. 66; Chairman, Evacuee Trust Property, West Pakistan, Lahore v. Muhammad Din and another P L D 1971 Lah. 217; Atta Muhammad Qureshi v. The Settlement Commissioner, Lahore Division, Lahore P L D 1971 S C 61 and Mrs. Dino Manekji Chinoy v. Muhammad Matin P L D 1983 S C 693 ref.
(1965) 12 Tax 25 (Trib .) ; Zain Nurani v . Secretary of National Assembly of Pakistan P L D 1957 S C 46; Tariq Transport Co. v. Sargodha Bhera Bus Service P L D 1958 S C (Pak.) 437; Imtiaz Ahmad v. Ghulam Ali P L D 1963 S C 382; Manager, Jammu and Kashmir State Property v. Khuda Yar & Co. P L D 1975 S C 678 and Mrs. Dino Manekji Chinoy v. Muhammad Matin P L D 1983 S C 693 rel.
--- When provision of law is clear, Courts are not required to interpret same to give it altogether a different meaning nor ancilliary circumstances need to be looked into--Interpretation of a Statute is not to be collected from any notions which might be entertained by Court as to what was just and expedient--Words are not to be construed contrary to their meaning as embracing or excluding cases merely because no good reason appeared why they should not be embraced or excluded--Duty of Court is to expound law as it stood and to leave remedy if one be resolved upon to others.
Maxwell on the Interpretation of Statutes (Twelfth Edition) ref.
---First Sched., Part III--Word 'including' used in Part III of First Sched. to Ordinance is all embracing--Term expresses an enlargement and have meaning of and or in addition to, or merely specify particular thing already included within general 'words'--'Including' within a statute is interpreted as a word of enlargement or of illustrative application as well as word of 'limitation'
Commissioner of Agriculture, Income-tax, East Bengal v. Abdul Rehman 1973 S C M R 445 and Black's Law Dictionary-Fifth Edition) rel.
---S. 59(1) and First Sched. , Part III--Assessment--Each year's assessment is an independent unit and Income-tax authorities are within their competence to take a different view in subsequent years--Such order of Income-tax Officer does not debar appellate authorities to take different view of matter particularly when there as there can be no estoppel against a statute.
---S. 59(1) and First Sched., Part III--Surcharge on sale of gold- Expression 'including' used in Part III of First Sched. to Income Tax Ordinance, held, made sale and purchase of gold or bullion in form of solid mass or used in jewellery or ornaments subject to levy of surcharge as specified therein--Order of Appellate Assistant Commissioner holding that surcharge was not leviable on sale of gold vacated and order of income-tax Officer levying surcharge on sale of gold upheld.
Muhammad Munir Qureshi, D.R. for Appellant.
Siraj-ud-Din Khalid for Respondent.
-The Department has brought this appeal assailing the order of the Appellate Assistant Commissioner of Income-tax, XXX dated the 13th October, 1985, passed in Appeal No. 8211 of 1983-84, by virtue of it he had held the sales of gold not liable to surcharge.
2. The brief facts leading to the appeal are that the assessee's firm of jewellers had filed the return for the charge year 1983-84 disclosing income of Rs.36,200 under the Self-Assessment Scheme. The declared income was accordingly accepted in pursuance of the provisions of section 59(1) of the Income-tax Ordinance, 1979. The Income-tax Officer while making the said assessment, however, levied surcharge of Rs.2,580 on the declared income. This levy of surcharge was opposed by the assessee before the learned Appellate Assistant Commissioner who agreeing with the assessee's plea accepted its appeal with the following observations:--
"The contentions of the appellant is correct. No surcharge is levied on the sale of Gold. The I.T.O. has himself rectified the mistake for the years 1979-80 and 1980-81. In the assessment year 1984-85 also no such charge has been levied on the income from sale of gold. Considering facts and circumstances of the case, the Income-tax Officer is directed to accord the treatment to the appellant within the provisions of Part III of First Schedule of the Income-tax Ordinance, 1979."
3. The Department is aggrieved of the aforesaid findings of the Appellate Assistant Commissioner and has, therefore, preferred the present appeal on the ground that the surcharge was correctly levied in accordance with the provisions of the Part III of the First Schedule to the Income-tax Ordinance, 1979. Hence, it is prayed that the order of the Income-tax Officer may be restored.
4. At the time of hearing of appeal, an objection was raised on behalf of the assessee challenging the maintainability of the present appeal because of failure of the Department to supply a copy of the memorandum and grounds of appeal by the Department to the assessee by registered post as required under rule 12 of the Income-tax Appellate Tribunal Rules, 1981. For facility of reference the said rule 12 is reproduced below:--
"12.
--The appellant shall before sling o appeal, send a copy o memorandum and grounds of appeal to the respondent by registered post. A certificate to this effect shall be appended with the appeal."
5. From the record, it appears that at the time of filing of the present appeal, the Income-tax Officer, XXX had filed a certificate therewith in the following words:--
"This is to certify that a copy of Memo. of appeal alongwith grounds of appeal has been sent to the Messrs XXX assessee in respect of second appeal filed by the department in this case for the assessment year, 1983-84."
6. In reply to the assessee's objection, Mr. M.M.Q. the learned Departmental Representative contended that the aforesaid certificate was rightly submitted as before filing of the appeal, a copy of the grounds of appeal was duly sent to the assessee through a process server and the same was delivered to Mr. F.M.M. a partner of the assessee's firm, on the 14th December, 1985. In support of these contentions, an 'acknowledgement slip' was also produced showing the receipt of the copy of the grounds of appeal by Mr. F.M.M. For facility of reference, the contents of the said 'acknowledgement slip' are reproduced as under:-----
Messrs S.J. XX Assessment Year 1983-84
Pleased find enclosed copies of grounds of second appeal filed.
14-12-1985
W.M. (Sd.)
N.S. F. M. M.
7. The assessee has not denied the receipt of the grounds of appeal through the said 'acknowledgement slip'. But it was claimed on its behalf that since copies of the memorandum and grounds of appeal were not sent by the Department through registered post as envisaged under rule 12 of the Income-tax Appellate Tribunal Rules, 1981, the delivery of copies of grounds of appeal to F. M. M. through process-server cannot be considered as compliance of the Rules and section 134(5) of the Income-tax Ordinance, 1979, whereunder the form and manner for filing of appeals before it were prescribed by the Appellate Tribunal. Mr. Siraj-ud-Din Khalid, Advocate, the learned counsel for the assessee, contended that the compliance of the provisions of rule 12 ibid was mandatory as the expression "shall" has been used therein and consequently failure to comply wish the said provisions renders the very appeal as invalid. In support of his contentions, the learned counsel referred to Muhammad Akram v. Capt. C.A. Saeed, Deputy Commissioner and Election Tribunal, Gujrat P L D 1965 (W.P.) Lah. 703, wherein the erstwhile West Pakistan High Court had held that requirement of rule 36 of Electoral College Rules, 1964, which requires the Election Tribunal inter alia to give at least one week's notice to all the respondents of the election petition filed before it, was mandatory and demands absolute obedience with the result that if the notice falls short of the minimum of seven days, the whole proceedings before the Tribunal are vitiated.
8. In this context, the learned counsel has relied upon Malik Abdul Aziz v. West Pakistan Publishing Company P L D 1985 (W.P.) Lah. 82 and Mian Abdul Majid v. The Chief Administrator of Auqaf, West Pakistan, Lahore P L D 1972 Lah. 66, wherein it was laid down that when the Legislature intends a thing to be done in a particular manner the thing must be done in that manner only. Likewise, in Chairman, Evacuee Trust Property, West Pakistan, Lahore v. Muhammad Din and another P L D 1971 Lah. 217, the Lahore High Court had held that 'whenever a statute limits a thing to be done in a particular form, it necessarily includes in itself a negative, viz. that the thing shall not be done otherwise'. In the case of Atta Muhammad Qureshi v. The Settlement Commissioner, Lahore Division, Lahore P L D 1971 S C 61, cited by the learned counsel for the assessee, their lordships of the Supreme Court had held that 'as a general rule, statutes which enable persons to take legal proceedings under certain specified circumstances demand that those circumstances must be accurately obeyed, notwithstanding the fact that the provisions thereof are expressed in merely affirmative language.'
9. The learned counsel for the assessee also referred to the case of Mrs. Dino Manekji Chinoy v. Muhammad Matin P L D 1983 S C 693, wherein their Lordships of the Supreme Court while interpreting the provisions of sub-rule (2) of rule 3 of Order XLIII of the Code of Civil Procedure had held that where the appellant does not provide proof for supplying copies of appeal to the respondent or his Advocate the appeal should not be entertained. It would be pertinent to reproduce below the relevant extracts of the said order:--
"16. The purpose of this provision obviously is to avoid the delay that is occasioned in issuance of notices to and having service effected on the respondent in a case where the main suit is still pending adjudication and only the legality or correctness of some interlocutory order is under question. Hence intimation to the respondent of the fact that an appeal is being preferred and on the grounds on which this is being done, to avoid taking him by any surprise, has been prescribed as a conditions precedent to the entertainability of the appeal.
17. Sub-rule (2) of rule 3 provides that on receipt of the notice referred to in sub-rule (1), the respondent may with the permission of the Court, appeal before it and contest the appeal with a view to getting it dismissed in limine, in case he succeeds in doing so he may even be awarded costs.
18. The above provision highlights the fundamental importance of issuance of the notice to the respondent by the appellant before presentation of the appeal. Not only does he become aware of the fact that an interlocutory order issued in his favour has been challenged by an appeal but a right has been conferred on him to contest the appeal at the limine stage with the permission of the Court, with a view to getting the appeal dismissed at that very stage and, thus, bring to a close the litigation directed against an order passed pendente lite favourable to him. This would not be possible unless notice before presentation of that appeal was given to the respondent, the said valuable right conferred upon him would be lost and resultantly the provisions of sub-rule (2) of rule 3 would be rendered futile, inutile and negatory. Hence, we think that issuance of a notice to the respondent before presentation of an appeal preferred against an order passed during the pendency of a suit is obligatory and no appeal can be entertained without issuance of the requisite notice. It would, therefore, be entirely appropriate, with a view to ensuring that the provisions of this beneficial rule are given effect to in letter and spirit that the officers responsible for inter alia receiving and scrutinising appeals preferred against the interlocutory orders made during the pendency of a suit of all the Courts concerned, do require the appellant or his Advocate to submit, alongwith the other documents required for filing an appeal, an affidavit that he has given notice of such appeal to the respondent or his Advocate by delivering him a copy of the memorandum and grounds of appeal alongwith a copy of the order appealed against and shall also attach with the said affidavit a copy of the acknowledgement receipt obtained from the respondent or his Advocate, as the case may be. Any appeal, which is not accompanied by such an affidavit and a copy of the acknowledgement receipt should not be entertained."
10. There is no doubt that while sending the copies of memorandum and grounds of appeal, the Department had not strictly adhered to the provisions of rule 12 of the Income-tax Appellate Tribunal Rules, 1981. Nevertheless, we are of the opinion that because of this lapse on the part of the Department, it should not be denied the right of appeal. In a case reported at (1965) 12 Tax 25 (Trib.), the Appellate Tribunal had held that where the Appellate Tribunal does, not dispose of a reference application within the statutory period of ninety days as provided under section 66(1) of the repealed Income-tax Act, 1922, the said application does not become redundant, notwithstanding the use of word "shall" in that provision. For facility of reference, the relevant extract of the said order is reproduced below:--
"It was argued that the use of the word 'shall' in the Act is open to only one construction, namely, the case can only be stated within the prescribed period of 90 days and not thereafter. We are, however, unable to accept this contention since the provisions contained in section 68 referred to above requiring the Appellate Tribunal to state the case within 90 days of the receipt of the application is only directory and not mandatory. The precise question came up for consideration before the Calcutta High Court in the case reported as Commissioner of Income-tax West Bengal v. Duncan Brothers & Co. Ltd. 7A(1955) 28 I T R 427 and it was held that a reference made by the Tribunal to the High Court is not incompetent merely because it was made after the expiry of 90 days from the date of receipt of the application made by an assessee or the Commissioner of Income-tax requiring the Tribunal to make a reference to the High Court. It has been observed in that case that the distinction between a provision which is directly and a provision which is mandatory is that in the former case disregard of the provision does not by itself invalidate the act done, whereas in the latter case it does. "
11. In Zain Nurani v. Secretary of National Assembly of Pakistan PLD 1957 S C (Pak.) 46, it was laid down by their Lordships that the non-performance of a statutory duty within the prescribed period does not effect the validity of the duty performed after the lapse of time. In Tariq Transport Co. v. Sargodha Bhehra Bus Service P L D 1958 SC (Pak). 437, the Supreme Court had also held that the violation of a procedural rule regulating the hearing, if it results in an error so minor as not to amount to the denial of a fair hearing, cannot be a ground for quashing the proceedings if, in fact, by the irregularity no prejudice has been caused to the petitioner for a writ'.
12. Similarly, in Imtiaz Ahmad v. Ghulam Ali P L D 1963 S C 382, his Lordship of Mr. Justice B.Z. Kaikaus had observed that proper place of procedure in any system of administration of justice is to help and not thwart the grant to the people of their rights. It would be beneficial to reproduce hereunder the relevant observations of his Lordship made in the said case:--
"All technicalities, have to be avoided unless it be essential to comply with them on grounds of public policy. The English system of administration of justice on which our own is based may be to a certain extent technical but we are not to take from that system its defects. Any system, which by giving effect to the form and not to the substance defeats substantive rights is defective to that extent. The ideal must always be a system that gives to every person what is his."
13. In Manager Jammu and Kashmir State Property v. Khuda Yar & Co. P L D 1975 S C 678, their Lordships had also held that mere technicalities unless offering an unsurmountable hurdle should not be allowed to defeat the ends of justice'. It was laid down by their Lordships as follows: --
"The proposition could hardly be disputed that the principle object behind all legal formalities is to safeguard the paramount interest of justice. In fact while considering the importance of legal technicalities and rules of procedure in the administration of justice, it is inevitable to recall the various evolutionary stages in the transition from justice without law of primitive society to justice in accordance with law of modern society and the conflict between equity and law in judicial history. It cannot be denied that legal precepts were devised with a view to impart certainty, consistency and uniformity to administration of justice and to secure it against arbitrariness, errors of individual judgment and mala fide. "
14. Relying upon these two later pronouncements their Lordships had finally concluded in Mrs. Dino Manekji Chinoy v. Muhammad Matin P L D 1983 S C 693, the case cited by the learned counsel for the assessee, that the provisions of Rule 3, Order XLIII of the Code of Civil Procedure should not be applied to thwart the obtaining of justice. It would be thus pertinent to reproduce below the following observations of the Supreme Court:--
"In the instant case, we observe that the learned Division Bench had issued a pre-admission notice to Advocate of the respondents (the petitioners herein) and their Advocate Mr. Akhtar Mahmood was present on pre-admission notice. Thus, he could contest the admission of the appeal and seek its dismissal in limine. No grievance furthermore, was made by him to the effect that any document to which reference was being made during the hearing of the appeal had not been supplied to him or that he was otherwise taken by surprise. Thus, in this case, all the objects for which rule 3 was inserted in Order XLIII of the C.P C. were satisfied in substance. Since the proper place of procedure is to help and not to thwart the obtaining of justice and procedural laws, as pointed out by Mr. Sharifuddin Pirzada, should be utilised as "stepping stones" rather than we might add, as stumbling block, the right of a party in this case to have his appeal heard, cannot be allowed to be defeated for failure to comply with the form where the substance has, in fact, been complied with."
15. In the instant case as well, the copies of memorandum and grounds of appeal were duly delivered to the assessee immediately after the filing of the appeal and before the date when the appeal came up fore hearing before the Appellate Tribunal. Therefore, the interest of the assessee had not in any way been prejudiced as he had become fully aware of the grounds on which the Department had challenged the findings of the learned Appellate Assistant Commissioner. Therefore, we do not deem it proper to reject the appeal because of or procedural or technical lapse when does not effect the merits of the appeal.
16. Coming to the merits of the appeal, it may be observed at outset that the learned Appellate Assistant Commissioner had not properly dealt with the controvercy in issue. Although he had observed that the surcharge was not leviable on the sale of gold, but he failed to give a clear cut findings on the questions raised before him. Instead, he simply directed the Income-tax Officer -'to accord treatment to the appellant with the' provisions of Part III of the First Schedule' to the Income-tax Ordinance, 1979. By virtue of this finding, in fact, the learned Appellate Assistant Commissioner had left the matter open for a decision by the Income-tax Officer in accordance with the provisions of Part III of the First Schedule to the Ordinance. In this respect, we have no hesitation to say that the law on this particular issue is very clear and contains no ambiguity. For facility of reference, the relevant extract of Part III of the First Schedule ibid as it was applicable for the year under consideration is reproduced below:--
"In the case of every person deriving income from the business of manufacture, purchase or sale of jewellery, including gold, silver, precious metals, stones and ornaments or other articles made thereof, the surcharge shall be payable as under:--
| | < [if supportMisalignedRows]> ||
| (a) Where such income does not exceed Rs 21,000. | 6 percent of such income. | < [if supportMisalignedRows]> |
| (b) Where such income exceeds Rs.21,000 but not exceed Rs.31,000 | Rs.1,260 plus 8 percent of the amount exceeding Rs.21,000. | < [if supportMisalignedRows]> |
| (c) Where such income exceeds Rs.31,000 | Rs.2,060 plus 10 per cent of the amount exceeding Rs.31,0000 | < [if supportMisalignedRows]> |
Provided that the surcharge shall not be payable by any person, not being a company, whose total income does not exceed Rs.18,000."
17. The learned counsel for the assessee tried to establish that the word 'including' used in the aforesaid provision does not envisage the levy of surcharge on gold, but it connotes that the same was leviable on the manufacture, sale and purchase of jewellery only. In this respect, he supported his contentions by referring to the dictionary meaning of the 'jewellery'. But it is a basic principle of law that when a provision of law is clear, the Courts are not required to interpret the same to give it altogether a different meaning. It has been stated in Maxwell on the Interpretation of Statutes (Twelfth Edition) that 'where, by the use of clear and unequivocal language capable of only one meaning, anything is enacted by the Legislature, it must be enforced however harsh or absurd or contrary to common sense the result may be. The interpretation of a statute is not to be collected from any notions which may be entertained by the Court as to what is just and lex0edienf, words are not be construed, contrary to their meaning, as embracing or excluding cases merely because no good reason appears why they should not be embraced or excluded. The duty of the Court is' it expound the law as it stands, and to leave the remedy if one be resolved upon to others'.
18. In Commissioner of Agriculture, Income-tax, East Bengal v. Abdul Rehman 1973 S C M R 445, it was held by the Supreme Court that while construing fiscal statutes the Courts should only look into the letter of law, howsoever, great hardship may thereby be involved. In the instant case, the word 'including' used in Part III of the First Schedule to the Income Tax Ordinance is quite significant and all embracing. According to ordinary dictionary meaning, this term expresses 'an enlargement and have the meaning of and or in addition to, ox' merely specify particular thing already included within general words'. Thus, "including" within a 'statute is interpreted as a word of enlargement or of illustrative application as well as a word of limitation' (Black's Law Dictionary-Fifth Edition).
19. The learned counsel for the assessee further contended that the intention of Legislature in levying surcharge should also be kept in view while interpreting the charging provisions. But as we have observed earlier, in view of the very plain language used in Part III ibid, ancillary circumstances need not to be looked into. Nor for that matter, the Budget Speech of the Finance Minister for the year 1972-73, being the year when certain proposals for further taxing the income of jewellers came under discussion, to which the learned counsel referred during his arguments, would be of any help for interpreting the provisions of the Income-tax Ordinance, 1979, which was apparently came into force at a much later date. Therefore, when a provision of law is absolutely clear, it would not be justified to import a meaning, which may change its very context and applicability.
20. It was also claimed by the learned counsel that for the assessment year 1983-84, the Income-tax Officer had, initially, levied the surcharge on the sale of gold but on an application moved by the assessee, the said order was rectified. Hence, it was urged that on the same analogy, the Department was estopped to raise a contrary plea. At this stage we cannot comment on any action of the Income-tax Officer taken by him in respect of the assessment for the charge year 1983-84 as the sale is not before us in appeal. It will, however, not be out of place to point out that each years assessment is an independent unit and the income-tax authorities are within their competence to take a different view in subsequent years. Similarly, such order of the Income-tax officer does not debar the appellate authorities to take different view of the matter. Particularly, when it is settled principle that there cannot be any estoppal against a statute.
21. Hence, we are of the considered opinion that the expression "including" as used in the aforesaid Part III of the First Schedule, to the Income-tax Ordinance, 1979, does make the sale and purchase of gold or bullion in the form of solid mass or used in jewellery or ornaments subject to levy of surcharge as specified therein. Therefore, the learned Appellate Assistant Commissioner had erred in observing that the surcharge was not leviable on the sale of gold. Hence, vacating the impugned order passed by him, we restore the order of the Income-tax Officer levying surcharge on the sale of gold.
22. The appeal succeeds accordingly.
M.Y.H. Appeal accepted.
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