Law: Income Tax Ordinance, 1979

Section: 111,116

Income Tax Ordinance (XXXI of 1979)]...... S. 111 Penalty of concealment of income Agreed assessment -First Appellate Authority confirmed the penalty on the ground that agreement for imposition of penalty was duly signed by the authorized representative of the assessee while the assessee vehemently contended that he had never agreed for imposition of penalty and words of penalty were written by the Assessing Officer behind his back and without his consent Validity No penalty under S.111 of the Income Tax Ordinance, 1979 could be imposed without service of notice under S.116 of the Income Tax Ordinance, 1979 which should clearly mention the charge on which the penalty was proposed to be imposed Was clear from the provision of S.111 of the Income Tax Ordinance, 1979 that the Deputy Commissioner had to be satisfied that in the said proceedings or in earlier proceedings relating to an assessment in respect of the same income year, concealment of income had taken place and such satisfaction about the concealment should clearly be indicated in the assessment proceedings which in effect culminate when assessment order is passed Intention to impose penalty for concealment had to be given in the assessment order itself On examination of the assessment orders passed under S.62 of the Income Tax Ordinance, 1979 it was found that nothing had been said in these orders regarding intention of the Assessing Officer for initiating penalty proceedings under S.116 of the Income Tax Ordinance, 1979 Condition precedent for penalty proceedings not been fulfilled penalties imposed were set aside. 1994 PTD (Trib.) 688 rel. ORDER MUHAMMAD AKHTAR NAZAR MIAN (ACCOUNTANT MEMBER), These two appeals are filed by the assessee against the order of the learned CIT(A) Zone V, Karachi made by him on 20 1 1996 and impugned the confirmation of penalties under section 111 of the Income Tax Ordinance, 1979 (hereinafter referred to as the Ordinance). Representatives of both the parties have been heard and the orders of the authorities below perused. 2. The facts so far as relevant for the disposal of these appeals are that assessments for the assessment years 1984 85 and 1988 89 are stated to have…

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