Law: Income Tax Ordinance, 1979

Section: 13(1)(d),13(1)(d)(e),85,86,87,88,89,90,9 1,92,93,94,95,108,109,110,111,111(1),111 (2),111(2A),112,113,114,115,116

(a) Income-tax---Mens rea---Explanation of mens rea and its application on tax laws. (b) Income Tax Ordinance (XXXI of 1979)----Chaps. IX (Ss.85 to 95) & XI (Ss.108 to 116)---Recovery of tax--­Penalty---Nature of liability---Rule of mens rea---Applicability---Authority of imposing penalty by Assessing Officer, Appellate Additional Commissioner or the Appellate Tribunal is adjudicatory in nature and proceedings are quasi-civil---Proceedings and provisions providing for imposition of additional tax and penalties under Chaps. IX & XI of the Income Tax Ordinance, 1979 fell within the purview of civil liability to which the concept of mens rea could not be extended. (c) Income Tax Ordinance (XXXI of 1979)--- ----Ss. 111, 116 & 13(1)(d)(e)---Penalty---Concealment of income---Rule of mens rea---Application---Addition made under S. 13(1)(d) & (e) on account of investment in assets and suppressed personal expenses respectively by the Assessing Officer, which was confirmed by the First Appellate Authority--­Penalty proceedings were initiated after the additions were upheld in appeal and penalty was imposed under S.111, Income Tax Ordinance, 1979, equal to the amount of tax on the ground that concealment of income/furnishing of inaccurate particulars of income stood fully established against the assessee--­Assessee contended that there was no wilful default or deliberate concealment of income on his part and penalty proceedings ought to have been finalized immediately after the assessment was completed, without waiting for disposal of appeal and, therefore, penalty could not be warranted---First Appellate Authority accepted the contention of the assessee that mens rea was not established and annulled the order imposing penalty---Validity---Provisions pertaining to imposition of penalty under Chap. XI of the Ordinance and levy of additional tax under Chap. IX of the Ordinance were civil in nature while prosecutions and punishments provided in Chap. XII were criminal in nature---Liability created under S. 111 of the Income Tax Ordinance, 1979 was a civil liability which was mainly aimed at retrieving the loss caused to the State on account of concealment of…

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