Law: Income Tax Ordinance, 1979

Section: 111

Income Tax Ordinance (XXXI of 1979)----S.111---Penalty---Concealment of income---Agreed assessment---Assessee purchased properties for total declared value of Rs.12,00,000---Assessing Officer considered the value low and proposed to enhance the value to Rs.24,30,000---Assessee while explaining the source of investment of Rs.12,00,000 furnished fake FEBCs Encashment Certificate of Rs.4,00,000---Agreed assessment was, however, made without any prejudice to the penalty proceedings for concealment of income and furnishing of fake FEBCs Encashment Certificate---Penalty was imposed by the Assessing Officer---Penalty was challenged on the ground that same could not be imposed after agreed assessment---Commissioner of Income Tax (Appeals) rejected contention of assessee---Appellate Tribunal directed Assessing Officer to impose penalty in respect of the concealed income of Rs.4,00,000 only in circumstances. (1990) 184 ITR 288 distinguished. 1994 PTD (Trib.) 1266 and 1995 PTD (Trib.) 1183 ref. ORDER INAM ELLAHI SHEIKH (ACCOUNTANT MEMBER).---An individual assessee has filed this further appeal against an order, dated 19-8-1996 recorded by the learned C.I.T. (Appeals), Zone-5, Lahore to agitate the eligibility of the penalty imposed under section 111 of the Income Tax Ordinance (hereinafter called the Ordinance) which had been imposed as a result of agreed assessment. 2. The only plea of the assessee in this case is that no penalty under section 111 of the Ordinance could be imposed for concealment when the assessment had made on agreed basis. The relevant facts in this case are that the assessee had purchased two properties for total declared value of Rs. 12,00,000. This value was considered to be low and it was proposed to enhance the value to Rs.24,30,000 in respect of these two properties. The assessee declared the following source of investment:-- (1) FEBC encashment certificate Rs.4,00,000 (2) Loans received from various persons. Rs.3,70,000 (3) Cash gift. (Foreign Remittance) Rs.2,00,000 (4) Prize money on prize bonds. Rs.1,30,000 (5) Insurance receipt on maturity. Rs.30,540 (6) Savings. Rs.1,00,000 However, the department discovered that the declaration of FEBC…

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