Law: Income Tax Ordinance, 1979

Section: 52,86,108,143B,144(c)

The learned ITAT has disapproved penal action u/s 52/86 on mere guess work by the assessing officer where statement u/s 143B was filed. It is further held that failure to file information u/s 144(c) entails penalty u/s 108 and does not call for invocation of action u/s 52/86. FACTS/HELD 1. The appellant, a private Limited company, engaged in the business of supply of goods, filed statement u/s 1430-B. The department worked back purchases from supplies declared in the statement and initiated proceeding u/s 52/86 by seeking information u/s 144(c) regarding seller of goods. No information was filed by the assessee. The department proceeded ex parte and charged tax u/s 52 and additional tax u/s 86. 2. The learned ITAT has disapproved the action with the observation that tax under question cannot be levied on mere guess work. 3. After hearing the parties and going through the available record, we find that the views of the learned AR carry weight. Firstly, there was no column in the prescribed statement u/s 143-B, wherein the assessee could disclose the figures of purchases. Secondly, the statement u/s 143-B was different from the trading profit and loss account, therefore nondeclaration of purchases was not a default on the part of the assessee. Since, the declared receipts were covered under the provision of 80C, therefore no further information was required to be filed by the tax payer. If the assessee had not cooperated, independent inquiry could have been conducted by the assessing officer in order to find out the exact quantum of purchases attracting the relevant provisions of law. The tax under question cannot be levied on mere guess work. The department had shifted the onus of proving the default u/s 52/86 on the assessee. The failure to file information u/s 144(c) entails penalty u/s 108 and does not call for invocation of the provisions of sections 52/86. In view of above facts and circumstances of the case we find that the departmental action was not legally justified hence, we accept the assessee's appeals and vacate the orders of both the officers below. Appeals succeeded. ORDER CH. NAZIR AHMAD, ACCOUNTANT MEMBER. Through these appeal the tax payer has…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492