I. BACKGROUND

1. This refers to the Important QCs in trail, blue, italic and after double line (a) 3268 of ------- about Delay in Filing Appeal by Govt - Condonation & Appeals dismissed (b) BFIC 318 of ------ about No Condonation Application & Limitation period elapsed - LHC

2. We also refer to several Other QCs including (a) TLQC2662 of ---------- about SOP for Time limit Condonation - FST S. 74 (b) CDQC256 of ------------ about Get Condonation of Import / Export Prohibitions, etc and KCR (c) TLQC1231 of ------------- about FBR letter re Condonation for TY 2014 may be ultra vires - LHC Interim relief (d) TLQC1215 of ----------- about Condonation Cases Quick Disposal u/s 74 SOP - FST Cir ---

II. EXECUTIVE SUMMARY

1. The main question was whether the ATIR was justified in dismissing the taxpayer's appeal as time-barred without confirming the valid service of the order, as required by Section 218(1) of the Ordinance 

2. An amended assessment order dated ----------- was finalized, creating a tax demand. The taxpayer argued that they only became aware of the amended assessment order on 18.9.24 when a notice for recovery was served, claiming the order was never served upon them in accordance with the prescribed procedure 

3. LHC found that the Tribunal committed a serious jurisdictional error by dismissing the appeal in limine (at the outset) without conducting any inquiry or seeking clarification from the Department regarding the service of the amended assessment order.

4. LHC emphasized that the right to appeal is a substantive right, and procedural requirements must not defeat substantive justice where delay is adequately explained.

5. The reference application was allowed by LHC; and the ATIR's impugned order dated 16.10.24 was set aside. The matter is remanded to the Tribunal with the following directions:

(a) Decide the applicant's application for condonation of delay afresh 

(b) Record a specific finding on the question of service and knowledge of the amended assessment order 

(c) Decide the application strictly in accordance with law within a period of 60 days from the date of receipt of the order 

(d) If the delay is condoned, the appeal shall then be decided on merits in accordance with law 

III. DETAILS

A. General & Reference

Further to KQU -----of ----------, being an important matter, we would inform you about -------------------------------- (Attachment 3334.1) in the ensuing paragraph, with emphasis in bold & Underline, heading ours for quick reading.

B. Question of Law

1. This reference application has been filed u/s 133 of the ITO, 2001 (hereinafter referred to as "Ordinance") against the impugned order dated ----------------, passed by the ATIR. Inter-alia, following question of law has been argued.

"A. Whether on the facts and in the circumstances of the case the learned ATIR was justified to dismissed the appeal of the taxpayer based on time-barred without valid services of order as per section 218(1) of the Ordinance read with Rule 74 of the Income Tax Rule 2002?

2. The applicant-taxpayer, being a private limited company, derived income from the business of manufacturing parts and accessories for motor vehicles. In this regard, a return of income for the TY ----- was filed, declaring "NIL" income, which was deemed to have been finalized u/s 120(1) of the Ordinance.

3. Subsequently, the assessment record was examined, wherein discrepancies were found regarding the concealment of local purchases and sales. In light of these discrepancies, proceedings for amendment of assessment were initiated, and a notice u/s 122(9), read with Sections 122(5) and 111, was issued to the applicant for compliance by 17.1.24.

4. On the stipulated date, no compliance was made by the applicant taxpayer. As a result, the assessing officer finalized the order dated -------------- and created a tax demand. Being aggrieved, the applicant challenged the same before the Appellate Tribunal by filing an appeal, however, the same was dismissed through the impugned order. Hence, this reference application is before this Court.

C. Learned counsel Applicant Submissions

1 to 3

C. LHC Observations and Findings

1 to 6

D. --HC Decision

1. In view of the foregoing, this reference application is allowed. Consequently, the impugned order passed by the learned Appellate Tribunal dated -------------- is set aside. The matter is remanded to the Tribunal with a direction to decide the applicant's application for condonation of delay afresh, after affording proper opportunity of hearing to both parties, and to record a specific finding on the question of service and knowledge of the amended assessment order.

2. The Tribunal shall decide the application strictly in accordance with law within a period of 60 (sixty days) from the date of receipt of this order. If the delay is condoned, the appeal shall then be decided on merits in accordance with law.

 IV. FURTHER DETAILS & SERVICES

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Statement, Advisory, Return Filing or Review services, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com, asif.s.kasbati@professional-excellence.com.

Best regards for Here & Hereafter

Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc Quick Commentary Service Provider and High Level 440+ Tax & Levies Laws Consultants)