ATIR can't reverse relief to taxpayers without valid reasons: LHC

Lahore High Court (LHC) has ruled that the relief given to taxpayers by the forum of Commissioner (Appeals) cannot be reversed by the Appellate Tribunal without applying judicious mind and giving elaborate necessary valid reasons.
It is learnt that LHC has recently ruled in the income tax reference filed by the defunct Ghee unit of public sector that reasons given by the Commissioner (Appeals) were required to be disclosed to form any different opinion by Appellate Tribunal that has merely observed that undue favour was given to taxpayer and the Tribunal vacated the Commissioner (Appeals) order, which is not sufficient to reverse the finding of Commissioner Appeals.
When contacted tax lawyer Waheed Shahzad Butt who represented the cases of Ghee unit before the LHC, stated that verdicts of higher/superior judiciary on the issue are very clear and unambiguous but some learned members of the Appellate Tribunal are openly flouting the verdicts of binding nature without any lawful logical excuses. He said it was tantamount to contempt of court.
Appellate Tribunal Inland Revenue (ATIR) is the last fact finding forum in hierarchy of Taxation Laws, therefore, it is bound to discharge its functions, diligently. Any opinion, on law, by ATIR would lose credence for consideration by High Court in the advisory jurisdiction if its findings of fact are not trustworthy. In case true facts are not ascertainable from available record; the ATIR is vested with vast powers under Section 132(1) of the Income Tax Ordinance, 2001 to call for any particulars relating to appeal or cause further enquiry to be made by the Commissioner during the appeal proceedings.
The rationale behind more than one Appellate Forums under fiscal statutes is to cross check the exercise of powers by the taxation authorities and ensure proper taxation under the statute, lawyer opined.
LHC order stated: "Besides the proposed questions, it is pointed out by learned counsel for the applicant taxpayer that Appellate Tribunal has not applied its independent mind while deciding the case. In support of his assertions, he has read paragraphs from the Appellate Tribunal's order. Learned counsel for the respondent department was confronted with the objection. He has attempted to justify the impugned order but could not convince us.
"Two issues were addressed i.e. one was about bad debts and other was regarding expenses relatable to other income. Perusal of Commissioner (Appeals) order shows that elaborate reasons for allowing expenses were given, however, Appellate Tribunal has merely observed that undue favour was given to taxpayer to vacate the Commissioner (Appeals) order, which in our opinion, is not sufficient to reverse the finds of Commissioner Appeals. In paragraph No. 6 of the impugned order, Appellate Tribunal has observed that it had valid reason but no reason has been disclosed.
"Needless to say that reasons given by Commissioner (Appeals) were required to the disclosed to form any different opinion by Appellate Tribunal. Since the impugned order is passed without applying judicious mind and without giving elaborate necessary reasons, therefore it set aside. Office shall send a copy of the said order under seal of the Court to the Appellate Tribunal," LHC ordered.