Law: Income Tax Ordinance, 1979

Section: 108,55

Income Tax Ordinance (XXXIX of 1979)----Ss. 108 & 55---Penalty for failure to file return of income by assessee---Contention of the assessees was that as it was first year of their business and they had sustained losses therefore, they were under the impression that in case of losses no return was to be filed---Validity---Held, S.55 of the Income Tax Ordinance, 1979 gave a discretion to the assessee that when his total income to which he was assessable for any' income year along with the return of wealth tax exceeds the maximum amount, which was not chargeable to tax, he shall furnish a return of his total income as the case may be for the said income year---If the total income did not exceed the maximum amount which was not chargeable to tax, the assessee had an option not to file the return for the respective year---Income Tax Appellate Tribunal, in view of such statutory relaxation, was justified in deleting the penalty imposed on the assessees---Reasonable and probable cause for exempting from the penalty was absence of deliberate intention of non-compliance by the assessee---Mala fide intention as alleged having not been proved, the reference was dismissed. Commissioner of Income Tax, Assam v. Assam Automobile and Accessories Agency (1978) 111 ITR 411; Commissioner of Income Tax v. N. Khan and Brothers (1973) 92 ITR 338 (All); (197'7) 107 ITR 214; The State v. Sardar Ataullah Khan Mangal PLD 1967 SC 78 and Messrs Elahi Cotton Mills Ltd. and others v. Federation of Pakistan through Secretary, Min. Finance, Islamabad and 6 others PLD 1997 SC 582 ref. JUDGMENT MRS. YASMIN ABBASEY, J.---In appeal presented before Income Tax Appellate Tribunal against order of Commissioner of Income Tax on 10-6-1986 the question for consideration was that:--- "Whether for imposing penalty under section 108 of Income Tax Ordinance, 1979 for not filing return for the year 1982-83 could be deleted on the ground taken by the respondent, that as it was first year of their business and also because respondent had sustained losses therefore, they were under the impression that in case of losses no return is to be filed. The Income Tax Appellate Tribunal vide its judgment, dated…

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