Law: Income Tax Ordinance, 1979

Section: 55,56,108

Income Tax Ordinance (XXXI of 1979)---Ss. 55, 56 & 108---Failure to furnish return in time ---Notice---Penalty--¬Once a notice under S.56 of the Income Tax Ordinance, 1979 is issued and served on the assessee then period of default under S.55 of the Ordinance ends and from the date on which the assessee is required to file income tax return by notice under S.56 of the Ordinance the default of the assessee starts if the assessee does not file income tax return---Two penalties under S.55 and under S.56 cannot be imposed simultaneously for the same period. Penalty can be imposed for default under section 55 of the Income Tax Ordinance, 1979 or for default under section 56 of the Ordinance. But the two penalties cannot be imposed simultaneously for the same period. The provisions of sections 55 and 56 of the Income Tax Ordinance are quite clear if the assessee does not file any return as provided under section 55 of the Income Tax Ordinance, 1979, the penalty will be imposed for default under section 55. The same is true for default under section 56 but there is no question of overlapping of the period of penalty. Once a notice under section 56 is issued and served on the assessee then period of default under section 55 ends and from the date on which the assessee is required to file income tax return by notice under section 56 the default of the assessee starts if the assessee does not file income tax return. In the present case the period which had been taken into consideration for calculating the penalties was almost the same. Because of these reasons two penalty orders were set aside and the I.T.O. was directed to calculate the penalty for default under section 55 from the date on which the Income tax return was due to the date of service under section 56 and the penalty for default under section 56 will be calculated from the date on which assessee was required to file the income tax return by notice under section 56 to the date on which income tax return was filed by the assessee or assessment was completed by the I.T.O. ORDER These two appeals have been filed on behalf of Mian Liaqat Ali c/o VIP Centre, hereinafter also referred to as the assessee,…

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