Law: Income Tax Ordinance, 1979

Section: 55,56,108,134&136

Income Tax Ordinance (XXXI of 1979)-----Ss. 55, 56, 108, 134 & 136---Return of total income---Failure to furnish return---Imposition of penalty---Reduction in amount of penalty---Appeal against of Appellate Tribunal---Assessee who derived income from manufacturing and sale of spare parts, was burdened with a penalty of Rs.36,200 on account of his failure to have filed return under S.55 of Income Tax. Ordinance, 1979---Commissioner of Income Tax (Appeals) finding said amount of penalty to be excessive and on the higher side, directed its reduction to Rs.5,430---Said order was maintained by Income Tax Appellate Tribunal on the ground that assessee was a small businessman and that he had returned nil income for the year under consideration as he was under the impression that no taxable income was earned by him during that year---Assessee, on notice under S.56 of Income Tax Ordinance, 1979, did file a statement of sales and expenses on a plain paper on the ground of non-availability of prescribed income tax return---Such fact was sufficient to support the first appellate order of reduction in amount of penalty---Appellate Commissioner and Appellate Tribunal had jurisdiction to reduce the fixed amounts of penalties provided for in Income Tax Ordinance, 1979--Both forums were competent to grant relief of reducing the amount of penalty. Commissioner of Income Tax, Special Zone, Lahore v. Musarat Textile Mills Ltd., Faisalabad 2005 PTD 2270 ref. ORDER The Commissioner of Income Tax and Wealth Tax, Sialkot Zone, Sialkot claims that the order recorded by a Division Bench of the Income Tax Appellate Tribunal, Islamabad Bench on 23-11-1999 gives rise to the following question of law to be considered and answered by this Court:--- "Whether on the facts and in the circumstances of the case, the learned ITAT was legally justified in maintaining the order of the C.I.T.(Appeals) whereby penalty imposed under section 108 at Rs.36,200 was reduced to Rs.5,430 whereas the provisions of the said section do not permit airy discretion with regard to the quantum of penalty leviable and the amount of penalty levied by the Assessing Officer was in conformity with the prescriptions of…

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