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صرف 1000 روپے میں 10 وکلاء تک کی براہِ راست رابطہ تفصیلات حاصل کریں اور کال یا واٹس ایپ کے ذریعے موزوں قانونی ماہر سے رابطہ کر کے اپنا معاملہ پورے اعتماد کے ساتھ آگے بڑھائیں۔
I.T. A. No. 3919/LB of 1984-85 heard on 1st October, 1986.
---Ss. 108(a), 58(2), 55 & 63--Failure to furnish wealth statement under S.58(2), held, would lead to imposition of penalty under S.108(a) 1986 P T D (Trib.) 190 overruled].
Subsection (2) of section 58 of Income-tax Ordinance, 1979 makes it obligatory on every assessee, whose total income is not less than fifty thousand rupees, to furnish a wealth-statement alongwith his return of total income notwithstanding the fact that by virtue of subsection (1) of section 58 the I.T.O. has been vested with an authority to require any assessee to furnish, on a date to be specified in the notice, wealth-statement in the prescribed form and verified in the specified manner giving particulars as mentioned therein. It is further provided in subsection (2) of section 58 that" all the provisions of this Ordinance shall, so far as may be, apply to the wealth statement as they apply to a return of total income. " The legislature has thus specifically and explicitly cast a duty on every assessee, whose total income is not less than fifty thousand rupees, 'to furnish a wealth statement alongwith his return. Subsection (2) of section 55 specifies period within which the return is to be furnished by a company and by other assessees. Subsection (3) of section 55 confers the discretion on the I.T.O. to extend the date for the delivery of the return, on sufficient cause being shown up to 15 days from the dates specified in subsection (2) with the approval of the I.A.C. section 63(a) lays down that where any person fails to furnish a return of total income required to be furnished by him under section 56 etc., the I.T.O. may, by an order in writing, assess the total income of the assessee to the best of his judgment and determine the amount of tax payable by him. Non-filing of return, without reasonable cause, has been made punishable with a levy of penalty under section 108(a). By laying down in subsection (2) of section 58 that all the provisions of the Ordinance shall, so far as may be, apply to the wealth statement as they apply to a return of total income, the legislature has clearly provided that where an assessee is under an obligation to rile wealth statement under subsection (2) of section 58, he shall furnish it within the period as laid down in subsections (2)(a) and (b) of section 55 and that the I.T.O. is empowered to extend the time for filing of wealth statement for periods as mentioned in subsection (3) of section 55. Likewise, the failure to file wealth statement under section 58(2) may entail the making of a best judgment assessment under section 63 of the Ordinance. The penalty prescribed for failure to furnish return of total income under section 55 shall be exigible for not filing the wealth statement under subsection (2) of section 58 where it was required to be furnished by an assessee under subsection (1) of section 58, the I.T.O. hats been empowered to require any assessee to furnish, on a date to be specified in the notice, wealth statement in the prescribed form and verified in the prescribed manner giving the particulars mentioned therein. The failure to furnish the wealth statement in compliance with a notice issued under section 58 has been made punishable under section 110 and so also it has been provided in section 63(b) that where any person fails to comply with any of the terms of notice issued under section 58, I. T.O. may, by an order in writing, assess the total income of the assessee to the best of his judgment and determine the amount of tax payable by him. The legislature has, therefore, manifestly made the default of subsection(2) of section 58 and failure to furnish wealth statement in compliance with a notice under subsection (1) of section 58 punishable separately. For default of subsection (2) of section 48, the same consequences have to follow which are prescribed for failure to file a return of total income whereas the failure to comply with any notices issued under subsection (1) of section 58 have been specifically made punishable under section 110 and section 63(b) of the Ordinance. The insertion and inclusion of section 58(1) in section 108(a) was manifestly unnecessary and uncalled for when it has been specifically laid down in section 58(2) that all the provisions of the Ordinance shall, so far as may be, apply to the wealth statement as they apply to return of total income. Subsection (2) of section 58 will thus, be read in all the provisions where the default of section 55 is provided. If the legislature would have chosen to provide specifically in all the relevant provisions of section 58(2), then there was obviously no necessity for it to have mentioned in section 58(2) that "all the provisions of his Ordinance shall, so far as may be, apply to the wealth statement as they apply to a return of total income." Held that the I. T. O. has legally levied the penalty under section 108(a) and his order has validly been upheld by the First Appellate Authority.
1986 P T D (Trib.) 69 approved.
1986 P T D (Trib.) 190 overruled.
Muhammad Nawaz for Appellant.
Muhammad Munir Qureshi, D. R. for Respondent.
Date of hearing: 1st October, 1986.
.--The assessee, who is a director of limited company derives income from salary and also shares income from a registered firm. He filed return of income for the assessment year 1982-83 declaring an income of Rs.54,756 on 10th October, 1980. He did not, however, in contravention of subsection (2) of section 58 of the Income-tax Ordinance, 1979 (for short the Ordinance, 1979",) furnish the wealth statement alongwith his return of total income. The Income-tax officer, by notice in writing, required him to furnish the wealth statement. In compliance thereto, the assessee filed the wealth statement on 27th February, 1983. The Income-tax Officer initiated penalty proceedings by issuing a notice under section 116 of he Ordinance. In reply to the said notice the assessee vide his letter, dated 17th March, 1983 came out with a plea that the wealth statement had been filed alongwith the return. No documentary evidence in support of this plea was adduced. The Income-tax Officer, therefore, vide his letter dated 7-5-1983 called upon him to furnish proof of his contention of having filed the wealth statement alongwith return. The assessee, however, did not avail of the opportunity ignored the letter and in fact failed to give any reply to this letter. The Income-tax officer, therefore, inferred that the assessee had no proof to furnish in support of his plea and hence he came to the conclusion that the default was established. Consequently, the Income-tax Officer, with the prior approval of the Inspecting Assistant Commissioner, Range-1, Central Zone, Lahore levied a penalty of Rs.2,000 under section 108 of the Ordinance. It may be mentioned here for clarification that the amount of penalty of Rs.2,000 was mistakenly typed out as Rs.8,000. It was, however, later on, rectified.
2. Being aggrieved by the penalty imposed by the Income-tax officer, the assessee carried the matter in appeal to the Appellate Assistant Commissioner, E-Range, Lahore. The assessee, however, without any intimation, failed to appear before the Appellate Assistant Commissioner and hence he dismissed the appeal with the following observation:
"On the date of hearing none attended on behalf of the appellant neither any application for adjournment was received Perusal of record shows that the appellant has not furnished any documentary evidence which may support his contention and negate the findings of the I.T.O. in respect of the above penalty. Since the appellant has failed to rebut the inference drawn by the I. T.O. hence no interference is needed in this context and penalty imposed is hereby maintained"
3. The assessee has, therefore, filed this further appeal before the Tribunal on the following grounds:
"(i) that the assessment is bad in law and against the facts of the case."
"(ii) that the learned A. A. C. is not justified to maintain the penalty and also overlooked the record as Rs.8,000 instead of Rs.2,000 which is mistake as rectified by the I.T.O. vide his order, dated 25-10-1983. Same was pointed out at the time of hearing of appeal."
4. This appeal came up for hearing before our learned brother, Mian Abdul Khaliq, sitting singly, on 20th April, 1986 when he adjourned it after recording the following note on the order-sheet:-
"In this appeal legality of levy of penalty under section 108 of the Income-tax Ordinance, 1979 for default of non-filing of wealth statement under section 58(2) of the Ordinance is being challenged. While sitting in Single Bench, I had decided that issue against the assessee vide decision reported as 1986 PTD (Trib.) 69. A Division Bench of Karachi, decided that very issue in favour of the assessee as per decision reported as 1986 P T D (Trib.) 190. At the time of decision, neither the Single Bench nor the Division Bench Members knew the contradictory views. Both the decisions having been reported, it is desirable that this appeal be placed before the Chairman for referring the matter to a Full Bench."
5. It has thus, come up for hearing before this Full Bench.
6. Firstly, the counsel for the appellant argued that the assessee had in fact submitted the wealth statement alongwith return notwithstanding the fact that no such specific ground was taken in the Memorandum of Appeal. He was, however, not allowed to urge it. Both the officers below, it may be added, had disbelieved this plea of the assessee for want of proof. The counsel for the appellant submitted that the failure to submit wealth statement under section 58(2) of the ordinance has not been made punishable under section 108 ibid and hence authorities below acted improperly in levying the penalty He strongly placed reliance on the Division Bench decision of the Appellate Tribunal since reported as 1986 P T D (Trib.) 190. The learned Departmental Representative, on the other hand, strenuously argued that in section 58(2) it is specifically provided that "all the provisions of the Ordinance shall, so far as may be, apply to the wealth statement as they apply to a return of total income", and hence all the consequences, including the levy of penalty that flow from the non-filing of return, shall ensue for failure to furnish wealth statement. He, therefore, contended that it is for this reason that the legislature devisedly omitted to mention section 58(2) in clause (a) of section 108. He further drew our attention to the definition of "return of total income" as contained in section 2(41) of the Ordinance and submitted that the return of total income was to be submitted in prescribed Form and that it was also to be accompanied by, inter alia, the wealth statement. The Income-tax Officer, according to him did not treat the return having been filed by the assessee-appellant. In short, the sheet-anchor of the contention of the learned D.R. has been the decision of the Single Bench of the Tribunal reported a3 1986 P T D (Trib.) 69.
7. On the aforesaid rival contentions, the following short out important, question arises for consideration:-
"Whether failure to furnish wealth statement under section 58(2) of the Ordinance would lead to imposition of penalty under section 108(a), ibid '11"
8. Before adverting to the contentions of the parties representatives it seems appropriate if we reproduce hereunder the relevant provisions of law as contained in sections 108 and 110, upon the construction whereof the fate of this appeal would lie.
--Where any person has, without reasonable cause, ailed to furnish, within the time allowed for the purpose:-
(a) any return of total income under section 55 or 56, subsection (1) of section 65, subsection (3) of section 81; or
(b) any certificate, statement, accounts or information under section 51, 139, 140, 141, 142, 143 (143-A) or 1-14.
The Income-tax Officer may impose upon such person a penalty not exceeding one hundred rupees for every day during which default continues. "
.--Where any person has, without reasonable cause, failed to comply with any notice issued under section 58, or 61, the Income-tax officer may-impose on him a penalty not exceeding (an amount equal to the amount of tax which would have been avoided if the income as returned by such person had been accepted as the correct income).
9. We also deem it expedient to reproduce section 58 as it stood at the relevant time. It is in the following terms:-
-(1) The Income-tax Officer may, by notice in writing, require any assessee to furnish, on a date to be specified in the notice, a statement (hereinafter referred to as the 'wealth statement') in the prescribed form and verified in the prescribed manner giving particulars--
(a) his total assets and liabilities as on the date or dates specified in such notice;
(b) the total assets and liabilities of his spouse, minor children and dependents as on the date or dates specified in such notice; and
(c) any assets transferred by him to any person during the period or periods specified in such notice and the consideration therefor.
(2) Notwithstanding anything contained in subsection (1), every assessee, whose total income is not less than fifty thousand rupees, shall furnish a wealth statement alongwith his return of total income and all the provisions of this Ordinance shall, so far as may be, apply to the wealth statement as they apply to a return of total income. "
10. It is an undisputed proposition of law that subsection (2) of section 58 makes it obligatory on every assessee, whose total income is not less than fifty thousand rupees, to furnish a wealth statement alongwith his return of total income notwithstanding the fact that by virtue of subsection (1) of section 58 ibid the I.T.O. has been vested with an authority to require any assessee to furnish, on a date to be specified in the notice, wealth statement in the prescribed form and verified in the specified manner giving particulars as mentioned therein. It is further provided in subsection (2) of section 58 that "all the provisions of this Ordinance shall, so far as may be, apply to the wealth statement as they apply to a return of total income. " The legislature has thus specifically and explicitly cast a duty on every assessee, whose total income is not less than fifty thousand rupees, to furnish a wealth statement alongwith his return. Subsection (2) of section 55 specifies period within which the return is to be furnished by a company and by other assessees. Subsection (3) of section 55 confers the discretion on the I.T.O. to extend the date for the delivery of the return, on sufficient cause being shown up to 15 days from the dates specified in subsection (2) with the approval of the I.A.C. Section 63(a) lays down that where any person fails to furnish a return of total income required to be furnished by him under section 56 etc. the I.T.O. may, by an order in writing, assess the total income of the assessee to the best of his judgment and determine the amount of tax payable by him. Non-filing of return, without reasonable cause, has been made punishable with a levy of penalty under section 108(a). By laying down in subsection (2) of section 58 that all the provisions of the ordinance shall, so far as may be, apply to the wealth statement as they apply to a return of total income, the legislature has clearly provided that where an assessee is under an obligation to file wealth statement under subsection (2) of section 58, he shall furnish it within the period as laid down in subsections 2(a) and (b) of section 55 and that the I. T. O, is empowered to extend the time for filing of wealth statement for periods as mentioned in subsection (3) of section 55. Likewise, the failure to file wealth statement under section 58(2) may entail the making of a best judgment assessment under section 63 of the Ordinance. The penalty prescribed for failure to furnish return of total income under section 55 shall be exigible for not filing the wealth statement under subsection (2) of section 58 where it was required to be furnished by an assessee. Under subsection (1) of section 58, at already stated, the I.T.O. has been empowered to require any assesses to furnish, on a date to be specified in the notice, wealth statement in the prescribed form and verified in the prescribed manner giving the particulars mentioned therein. The failure to furnish the wealth statement in compliance with a notice issued under section 58 has been made punishable under section 110 and so also it has been provided in section 63(b) that where any person fails to comply with any of the terms of notice issued under section 58, the I.T.O. may, by an order in writing, assess the total income of the assessee to the best of his judgment and determine the amount of tax payable by him. The legislature has, therefore, manifestly made the default of subsection (2) of section 58 and that failure to furnish wealth statement in compliance with a notice under subsection (1) of section 58 punishable separately. Fox default of subsection (2) of section 58, the same consequences have to follow which are prescribed for failure to file a return of total income whereas the failure to comply with any notice issued under subsection (1) of section 38 has been specifically made punishable under section 110 and section 63(b) of the Ordinance. The insertion and inclusion of section 58(1) in section 108(a) was manifestly unnecessary and uncalled for when it has been specifically laid down in section 58(2) that all the provisions of the Ordinance shall, so far as may be, apply to the wealth statement as they apply to return of total income. Subsection (2) of section 58 will thus be read in all the provisions where the default of section 55 is provided. If the legislature would have chosen to provide specifically in all the relevant provisions of section 58(2), then there was obviously no necessity for it to have mentioned in section 58(2) that "all the provisions of this Ordinance shall, so far as may be, apply to the wealth -statement as they apply to a return of total income. For the foregoing reasons we have not the least hesitation in reaching the conclusion that the I.T.O. has legally levied the penalty under section 108(a) and his order has validly been upheld by the First Appellate Authority.
11. From the discussion as made above it is evident that the decision recorded by the Single Bench of the Tribunal in I. T. A. No. 3496/LB of 1984-85 since reported as 1986 P T D (Trib.) 69 has correctly understood and interpreted the relevant provisions of law. Consequently, the decision of the Division Bench recorded in I.T.A. No. 391-A of the Karachi Bench of 1981-82 dated 8-5-1985 published in 1986 P T D (Trib.) 190 does not lay down the correct law. It is accordingly overruled, so far as it interprets subsection (2) of section 58.
12. In the result the appeal fails and is hereby dismissed.
M. B. A. /350/ Appeal dismissed.
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