Law:

Section:

(a) Income Tax Ordinance (XLIX of 2001)--- ----Ss.182(1) & 114---Penalty for failure to furnish a return or statement---Tax payable---Imposition of penalty for late filing of annual income tax return---Validity---Provisions of S.182(1) of the Income Tax Ordinance, 2001 clearly established the imposition of penalty linked with the tax payable---Absence of tax payable was fatal for imposition of penalty---Penalty for default of S.114 of the Income Tax Ordinance, 2001 would only become leviable when there was a "tax payable" but when there was no tax payable by the taxpayer, levy of penalty was not justified---No error or infirmity in the order of First Appellate Authority was found which was upheld and maintained by the Appellate Tribunal ---Appeal of the department was dismissed being devoid of any merit. (b) Income Tax Ordinance (XLIX of 2001)--- ----Ss.182 (1) & 144---Penalty for failure to furnish a return or statement---Tax payable ---Penalty had been prescribed in Sub-Cl. (i) of S.182 of the Income Tax Ordinance, 2001---Said clause had specified that penalty should be imposed on the basis of tax payable, whereas in the present case, no tax had become payable even on assessment--Restriction imposed on calculation of penalty was one tenth of one per cent of tax payable and maximum limit was 25% of the tax payable---Base point was the tax payable, resultantly second part of clause (i) came into operation only when initial calculation of penalty had been made on the basis of tax payable---For imposing penalty for default under S.114 of the Income Tax Ordinance, 2001, the pre-requisite was the tax payable by such assessee---Fulfilment of basic ingredient of "tax payable" thus was a condition precedent for levying the penalty. (c) Interpretation of statutes--- ----Tax statute is to be interpreted strictly and to be followed as per its language without stretching the meanings of the same. (d) Interpretation of statutes--- ----In the matter of taxation, literal approach had to be followed provided it did not lead to manifest absurdity. ORDER MUNSIF KHAN MINHAS, JUDICIAL MEMBER.---This appeal has been filed by the department against the order, dated…

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