Law: Income Tax Ordinance, 2001

Section: 122(5A),129,221,221(1),221(2)

SUMMARY;  This judgment by the Appellate Tribunal Inland Revenue accepted the taxpayer's appeal and annulled the rectification order passed under Section 221 of the Income Tax Ordinance, 2001, along with the Commissioner (Appeals)' order affirming it, on jurisdictional grounds. The core issue was that the original assessment order sought to be rectified had been passed by the Additional Commissioner Inland Revenue under Section 122(5A), but the rectification was undertaken by a subordinate Inland Revenue Officer, who lacked statutory competence under Section 221—which expressly limits rectification power to the authority that passed the original order ("passed by him") unless expressly delegated. The Tribunal held that no evidence of delegation under Section 210 was produced, and a subordinate officer cannot review, amend, or rectify an order passed by a superior authority without explicit statutory authorization. Consequently, the rectification order was declared void ab initio and coram non judice, and the appeal was accepted without adjudicating the merits of the disallowed tax credits. ORDER: M. M. AKRAM, JUDICIAL MEMBER:---.--- The appellant has preferred the instant appeal assailing Order-in-Appeal No. 300/2018 dated January 01, 2018, passed by the learned Commissioner Inland Revenue (Appeals-I) [“CIR(A)”], LTU Islamabad, under section 129 of the Income Tax Ordinance, 2001 (“the Ordinance”) for Tax Year 2015. The appeal has been instituted on the grounds articulated in the memorandum of appeal. Briefly stated, the appellant is a banking company deriving income from the business ofbanking and the provision of financial services. Its original assessment for Tax Year 2015 was amended vide order passed under section 122(5A) of the Ordinance (DCR No. 06/51 dated 29.04.2016), wherein the taxable income was determined at Rs. 4,176,309,751 and tax payable at Rs.1,628,760,803. The assessing officer extended credit for taxes paid during the relevant year, amounting to Rs.1,397, 323,713, subject to verification from the record. Upon scrutiny, the Inland Revenue Officer (“IRO”) observed that the…