Law: Income Tax Ordinance, 1979

Section: 111,13(1)(aa),138E

(a) Income Tax Ordinance (XXXI of 1979)-----Ss. 111, 13(1)(aa) & 138E---Penalty for concealment of income etc.--­Addition---Settlement---Addition made under S.13(1)(aa) of the Income Tax Ordinance, 1979 was reduced by the Income Tax Settlement Commission with the consent of the assessee---Assessing Officer initiated penalty proceedings for concealment ---Assessee contended that settlement was an agreement with the Department and in view of the agreement between the Department and assessee, the right of Department to impose penalty was automatically waived off---Validity---Penalty was rightly imposed on the admitted amount of deemed income under S.13(1)(aa) of the income Tax Ordinance, 1979 settled at the level of Income Tax Settlement Commission---Nothing in the order of the Settlement Commission was available to show that besides reducing the quantum of deemed income, there was any settlement on the question of penalty under S.111 of the Income Tax Ordinance, 1979---Proceedings for assessment of income which included addition under S.13(1)(aa) were independent in their nature and could not be equated with the penalty proceedings---Settlement reached with the Income-tax Settlement Commission had not placed any bar on the penalty proceedings to spite of the agreement of the assessee on the quantum of deemed income as terms of settlement did not include the penalty to question in the order of the Settlement Commission---No agreement existed with the Income Tax Department or with any competent Income-tax Authority about the quantum of deemed income---Penalty for concealment of income was required to be considered independently under S.111 of the Income Tax Ordinance, 1979 in circumstances. (1998) 42 Tax 87 (Trib.) distinguished. (b) Income Tax Ordinance (XXXI of 1979)--- ----S.138-E---Disposal of applications by the Settlement Commission--­Settlement---Agreement----Settlement reached by the assessee at the level of the Income-tax Settlement Commission could not be treated as an agreement with the Income-tax Department. THIS ORDER PASSED BY : JAMEEL AHMED BHUTTO (ACCOUNTANT MEMBER).--­The above captioned appeal at the instance of the assessee is directed…

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