Law: Income Tax Ordinance, 1979

Section: 111,13(1)(d),116

(a) Income Tax Ordinance (XXXI of 1979)---Ss. 111 & 13(1)(d)---Penalty for concealment of income---Deletion of addition penalty---Validity---No justification was for the penalty order, which had been made by the Taxation Officer much after the deduction of additions. (b) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 111 & 116--Penalty for concealment of income---Imposition of penalty after four years from the date of issuance of notice under 5.116 of the Income Tax Ordinance, 1979---Validity---No order of penalty shall be passed after the expiration of two years from the end of financial year in which such notice was served---Admittedly, notice under S.116 of the Income Tax Ordinance, 1979 had been sent by the Taxation Officer as on 30-6-1998 but the penalty order under S.111 of the Income Tax Ordinance, 1979 had been passed on 29-6-2002 after obtaining approval of the Inspecting Additional Commissioner which was exactly four years after the issuance of notice---Taxation Officer was duty bound to pass the order before the expiration of two years from the end of the financial year in which such notice was served and after the expiry of two years, he had no jurisdiction to pass order in this regard--Order passed under S.111 of the Income Tax Ordinance, 1979 was cancelled by the Appellate Tribunal. ORDER Through this appeal, the Department has objected to the impugned order of the learned C.I.T (A) dated 3-5-2003 deleting the penalty imposed under section 111 of the repealed Income Tax Ordinance, 1979. It has been contended on behalf of the Department that the assessee is an individual deriving income from running a flour mills. Assessment for the year under review i.e. 1991-02 was completed under section 59 (1). Subsequently, the case was reopened and in the course of normal assessment, addition was made under sections 13(1)(d)/13(2) of the repealed Income Tax Ordinance, 1979 on account of building owned by the assessee value of which was understated. She has contended that the penalty proceedings were initiated by issuing notice under section 116 on 30-6-1998 as mentioned in the order of the Taxation Officer made under section 111 of the late Ordinance,…

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