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Civil Petition for Special Leave Appeal No. 99 of 1977, decided on 9th March, 1980.

(On appeal from the judgment and order of the Lahore High Court dated 7-3-1975 in T. R. 391 of 1972).

S. 46(1)-Penalty imposed for failure of assessee to comply with demand notice-Appeal against such penalty on ground that Central Board of Revenue had permitted assessee to pay income-tax in installments allowed by Tribunal-Held, Tribunal cannot be said to have acted illegally in allowing assessee's appeal, in circumstances of case.

Bawany Violin Textile Mills Ltd., Karachi v. Commissioner of Income-tax 1967 P T D 622 ref.

S. Abdul Haq, Senior Advocate, T. Riazul Haq, Advocate and Iftikharuddin Ahmad, Advocate-on-Record for Petitioner.

Nemo for Respondent.

Date of hearing : 9th March, 1980.

.-The Income-tax Officer had imposed a penalty on the respondent under section 46(1) of the Income-tax Act, because the respondent had failed to comply with the demand notice served by the Income-tax Officer with regard to the assessment made by the Income-tax Officer for the charge year 1971-72. The respondent had challenged the impugned order in an appeal before the Income-tax Appellate Tribunal which was pressed by the respondent on the ground, inter alia, that the Central Board of Revenue had allowed its application to pay the income-tax due from it in installments. This objection was accepted on 'the basis of the judgment reported in Bawany Violin Textile Mills Ltd., Karachi v. Commissioner of Income-tax (1), and as the Tribunal thus set aside the penalty imposed on the respondent, the petitioner referred, the following question to the Lahore High Court

"Whether on the facts and circumstances of the case the Appellate Tribunal was justified in holding that the penalty imposed by the Income-tax Officer under section 46(1) of the Income-tax Act was not exigible under the law "

As the petitioner's application was rejected in limine by the Lahore High Court on 7-3-1973, the petitioner has filed this petition for leave.

Mr. Abdul Haque challenged the validity of the view taken by the Karachi Seat of the West Pakistan High Court in Bawany Violin Textile Mills Ltd.'s case and submitted that the observations of the learned Judges were too wide. We find however that it is not necessary for us to examine this submission, because the fact that the Central Board of Revenue had permitted the respondent to pay its income-tax lit installments was a circumstances relevant to the question whether appeal of the respondent against the penalty imposed on it should be allowed or not. Therefore, it cannot be said that) the Tribunal had acted illegally in allowing the respondent's appeal against the penalty imposed on it and, therefore, it is not a fit case for the grant of special leave.

In these circumstances, we would leave open the question of the validity of the observation in Bawany Violin Textile Mills Ltd.'s case and dismiss the petition on the ground that the Tribunal had acted within its jurisdiction, in allowing the respondent's appeal.

Petition dismissed.

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