Law: Income Tax Ordinance, 2001

Section: 133, 111, 114, 122, 122C

SUMMARY OF THE CASE

Court: Lahore High Court
Judge: Hassan Nawaz Makhdoom, J.
Case Type: Reference Application under Section 133 of the Income Tax Ordinance, 2001
Judgment Date: 24.10.2025 (Dictated), 05.11.2025 (Signed)
Subject: Limitation and condonation of delay in filing a Reference Application

1. FACTS OF THE CASE

• Applicant: Department of Income Tax
• Respondent: Dealer/distributor of M/s Ismail Industries Ltd.
• Tax Year: 2013
• Dispute arose over unexplained purchases of Rs.21,033,395/-.
• Assessing Authority issued notice under Sections 114 and 122C → Provisional assessment on 15.05.2014.
• Respondent filed returns declaring nominal income → amended assessment 27.02.2015, tax demand: Rs.5,093,098/-.
• Respondent appealed → CIR(A) dismissed appeal → Tribunal allowed appeal 27.02.2017, ruling procedural and jurisdictional defects existed.
• Applicant filed Reference Application before High Court (under Section 133, Income Tax Ordinance, 2001) → initially challenged Tribunal order.

Chronology & Limitation Issue:

• Tribunal order communicated: 09.03.2017
• Reference filed (incomplete) on 29.05.2017 (within 90-day limitation period, which ended 07.06.2017)
• Office objections raised → required re-filing within 3 days
• Reference re-filed: 15.06.2017 → 8 days beyond limitation period
• Applicant sought condonation of delay under Section 5, Limitation Act, 1908 (CM No.1 of 2019).

2. PETITIONER’S ARGUMENTS

• Delay was technical/non-substantive, due to office registry procedures.
• Delay only 8 days, bona fide, no prejudice.
• Reference Application was initially filed within limitation.
• Justice demands condonation to decide the case on merits.

3. RESPONDENT’S ARGUMENTS

• Reference barred by statutory limitation under Section 133(1), Income Tax Ordinance, 2001 (90 days).
• Office objections removal after expiry cannot validate filing.
• Section 5 of Limitation Act requires day-to-day explanation, affidavit, supporting record.
• Limitation creates vested rights → cannot be waived on equity.

4. ISSUE FOR DETERMINATION

• Whether the Reference Application filed after expiry of limitation period due to office objections can be condoned under Section 5 of Limitation Act, 1908.

5. LAW & SECTIONS REFERRED

Income Tax Ordinance, 2001

• Section 133(1): Filing of Reference Application within 90 days of Tribunal order.
• Section 133(8): Copy of judgment to be sent to Tribunal.

Limitation Act, 1908

• Section 5: Court may condone delay for “sufficient cause”.

Key Precedents

• Asad Ali & 9 others v. Bank of Punjab (PLD 2020 SC 736) → defective filing not cured after limitation period is time-barred.
• Saleem Khan v. Mst. Zeenat (2023 CLC 1217) → objections must be removed within limitation period.
• Regional Police Officer v. Riaz Hussain Bukhari (2024 SCMR 1021) → administrative delays do not justify condonation.
• Other supporting cases: Deputy Collector of Customs v. Muhammad Tahir (PLD 1989 SC 627), Muhammad Bashir v. Punjab (2003 SCMR 83), Government of Balochistan v. Muhammad Ali (2007 SCMR 1574).

6. COURT’S FINDINGS

• Incomplete Reference Application on 29.05.2017 → not valid filing.
• Re-filing on 15.06.2017 → after limitation period (8 days late).
• Office objections period cannot extend limitation.
• CM No.1 of 2019 (condonation of delay) → dismissed: vague reasons, no day-to-day explanation, no supporting affidavit.
• Statutory limitation applies strictly to both Government and private parties.
• Delay cannot be condoned in absence of sufficient cause → Reference Application is time-barred.

7. CONCLUSION / ORDER

• CM No.1 of 2019 (condonation of delay) → dismissed
• Reference Application → dismissed (barred by limitation)
• Copy to be sent to Tribunal (Section 133(8), Ordinance).

8. KEY PRINCIPLES

• Filing within limitation but materially defective → time-barred if defects cured after expiry.
• Administrative/procedural delays do not justify condonation.
• Government functionaries no special privilege regarding limitation.
• Limitation periods vest rights in opposing party, cannot be relaxed lightly.

ORDER;