Law: Income Tax Ordinance, 1979

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

Income Tax Ordinance (XXXI of 1979)----Ss. 13(1)(d) & 111---Unexplained investment---Imposition, of penalty---Scope---Where assessee agreed to addition after Authority having probed source of his investment, then, provisions of S.111 of Income Tax Ordinance, 1979 would certainly be attracted. JUDGMENT NASIM SIKANDAR, J.-----In this further appeal under section 136 of the late Income Tax Ordinance, 1979 an order of the Income Tax Appellate Tribunal, Lahore Bench, dated 2-2-1998 is assailed. 2. The appellant is an. assessee of the Income Tax Department. During the course of framing of an assessment for the year 1985-86 he agreed for an addition of Rs.80,000 under section 13(1)(d) of the Income Tax Ordinance, 1979. Thereafter he was served with a notice, dated 15-10-1997 seeking his explanation as to why penalty proceedings should not be initiated against him. Fin4lly through the order recorded under section 111 of the late Income Tax Ordinance, he was burdened with a penalty of Rs. 61,815 being 150% of the tax evaded. 3. Learned First Appellate Authority reduced the quantum of penalty to 100% of the tax evaded i.e. to Rs.41,210. The learned Tribunal by way of the impugned order, however, refused to interfere. Hence this further appeal. 4. On 18-1-2001 this appeal was admitted to consider the issue if in the given facts the provisions of section 111 of the Income Tax Ordinance, 1979 were not attracted inasmuch as the penalty had, in fact, been imposed on the addition which was made with reference to the provisions of subsection (2) of section 13 of the Income Tax Ordinance. 5. After hearing the learned counsel for the parties, we are of the view that learned counsel for the appellant has not been able to persuade us to agree that the addition in question was in fact made under subsection (2) of section 13 of the late Income Tax Ordinance, 1979. Mere fact that…

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