Law: Income Tax Ordinance, 2001

Section: 221, 122, 133

Tagline Rectification is not review; Tribunal cannot re-adjudicate or consider fresh evidence under the guise of correcting mistakes.  Summary The case arose from reference applications under Section 133 of the Income Tax Ordinance, 2001, challenging an order of the Chairman, Appellate Tribunal Inland Revenue (ATIR), who acted as a referee member due to a split decision. Facts: Taxpayer’s assessment was amended under Section 122 on grounds of: Unexplained income Non-deduction of withholding tax Appeals before Commissioner (Appeals) and ATIR were dismissed. Taxpayer filed rectification applications under Section 221. Division Bench differed: One Member allowed rectification Other rejected it Matter referred to Chairman ATIR, who allowed rectification by: Entertaining fresh evidence Allowing detailed arguments The High Court held: Section 221 permits only correction of mistakes apparent on the face of record. It does not allow: Reappraisal of evidence Admission of fresh material Re-adjudication of case Chairman ATIR exceeded jurisdiction by effectively reviewing earlier decision. Proper remedy against Tribunal’s order was reference under Section 133, not rectification. Taxpayer attempted to bypass statutory appellate mechanism. Held: Reference allowed; impugned rectification order set aside. ORDER; JAWAD HASSAN, J. This reference application as well as reference application No.06 of 2018 in terms of Section 133 of the Income Tax Ordinance, 2001 (hereinafter referred to as “Ordinance”) has arisen out of same order dated 12.01.2018 whereby the Chairman, Appellate Tribunal Inland Revenue, acting as referee member, (hereinafter referred to as “Chairman ATIR”) proceeded to decide applications regarding difference of opinion between  the  Members  of  Division  Bench  through order dated 28.12.2016 in M.A.(Rect.)No.72/IB/2016 and M.A.(Rect.)No.73/IB/2016 in ITA No.638 and 639/IB/2015 for the Tax Years 2013 and 2014. These reference applications are being dealt with and decided together as common question of law arises for an opinion of this Court.…