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Civil Petition for Special Leave to Appeal No. 581 of 1976, decided on 9111 March 1980.

(On appeal from the judgment anti order of the Lahore High Court dated 13‑1‑1975 in T. R. 178 of 1971).

-----Ss. 46 & 66‑Constitution of Pakistan (1973), Art. 185 (3)‑Penalty, setting aside of‑Question whether penalty imposed be set aside or not‑N1 within discretion of Income‑tax Appellate Tribunal while hearing appeal‑‑Tact of assessment order passed by Income‑tax Officer being ser aside in appeal‑A circumstance very relevant to exercise of Tribunal's discretion in setting aside penalty‑Tribunal; held, cannot in circumstances be said to have exercised its discretion illegally or perverse]y, hence no interference with such order called for.

S. Abdul Haq, Senior Advocate, S. Riazul Haq, Advocate and Iftikharud din Ahmad, Advocate‑on‑Record for Petitioner.

Nemo for Respondent.

Date of hearing : 9th March 1980.

‑‑The respondent is an assessee. As it failed to pay the income‑tax due from it for the assessment year 1963‑64 by the date prescribed by the Income‑tax Officer in his assessment order, the Income‑tax Officer imposed a penalty under section 46 of the Income‑tax Act. The respondent challenged his assessment in an appeal, and as the Appellate Assistant Commis sioner allowed the appeal, he also set aside the penalty imposed on the respon dent, Therefore, the petitioner filed an appeal against the Appellate Assistant Commissioner's order, but as the appeal was dismissed by the Income‑tax Appellate Tribunal the petitioner referred the following question to the Lahore High Court :‑‑‑

"Whether on the facts and in the circumstances of the case the Tribunal was justified in cancelling the penalty amounting to Rs. 5,835 imposed under section 46(1) of the Income‑tax Act "

As the High Court answered this question in the affirmative the petitioner has filed this petition for leave.

Mr. Abdul Haq submitted that merely because the assessment order of the Income Tax Officer was set aside this did not by itself justify the cancellation of the penalty imposed on the petitioner.

The question whether the penalty imposed on the respondent should be set aside or not was within the discretion of the Income‑tax Appellate Tribunal and the fact that the assessment order passed by the Income‑tax Officer had been set aside in appeal was a circumstance which was very relevant to the exercise of the Tribunal's discretion in the respondent's favour. Therefore, it cannot be contended that the Tribunal had exercised its discretion illegally or perversely in allowing the respondent's appeal. Accordingly, on this ground we would not interfere with the impugned order and dismiss this petition for leave.

Petition dismissed.

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