Law: Income Tax Ordinance, 1979

Section: 108(b),132(l)(b),135(4),135(5),103(b),12 9,132

ORDER Through this order, we propose to dispose of P.T.R. 4-2003, 400-2003, 426-2003, 20-2004, 21-2004, 22-2004, 328-2004 and 338-2004 wherein almost identical question(s) of law have been referred to this Court. In the instant case (PTR 4-2003), the Assessing Officer imposed a penalty under section 103(b) of the Income Tax Ordinance, 1979. The assessee filed an appeal before the Appellate Additional Commissioner who reduced the penalty, but still dissatisfied, the assessee invoked the jurisdiction of the ITAT which after considering the explanation offered by the assessee, further reduced the penalty. Through this Reference Application, it is contended that the following question of law arises requiring the expression of opinion by this Court:- "Whether under the fact and circumstances of the case, the Income Tax Tribunal was justified to reduce the penalty under section 108(b) against the mandatory quantum prescribed in the Income Tax Ordinance, 1979?" That the contention raised on behalf of the Department is that section 108 of the ITO specifically quantifies the penalty to be imposed. The word "shall" has been incorporated thereby through an amendment thereby it is the intention of the legislature to denude the DC Income Tax and the Department of any discretion in the matter of imposing the penalty order than the amount specified in the said provision of law. Hence, the penalty could not be reduced. In the instant case, the penalty has been reduced by the Additional Appellate…

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