I.T.A. NO.3245/LB OF 1998, DECIDED ON 29TH APRIL, 1999. Versus I.T.A. NO.3245/LB OF 1998, DECIDED ON 29TH APRIL, 1999.
ORDER
SYED NADEEM SAQLAIN (JUDICIAL MEMBER). ---The present appeal at the instance of the assessee has been preferred against the order, dated 9-7-1998 passed by the learned CIT(s) Zone 1, Lahore. The assessee has objected to the setting aside of the penalty imposed under section 108(b) of the Income Tax Ordinance, 1979.
2. Briefly stated the facts of the case are that the Assessing Officer observed that the appellant was obliged to make deduction under section 50 and furnish statutory statements on monthly basis. As no such statement was furnished, the default for the period 15-8-1997 to 5-7-1998 has been established. After issuing the necessary notices under section 116 a penalty of Rs.3,30,400 was imposed. On appeal the learned lower Appellate Authority set aside the penalty order. Hence second appeal before the Tribunal.
3. Mr. A. H. Qamar, I.T.P. for the assessee has been heard together with Mr. Khalid Aziz Banth, D.R. for the department. The learned A.R. has vehemently contended that the penalty under section 108(b) cannot be imposed for .default of sections 50(1) and 50(4) as the assessee provides no services and not hired any service or executed any contracts or have received supplies of any type. So, the provisions of section 50(4) and Rule 61 are not attracted in this case. He further argued that no assessment year has been mentioned in the body of the order. The learned D.R. on the contrary opposed the arguments of the learned A.R. advanced at the Bar.
4. Having heard the arguments from both the parties we are of the considered view that the arguments advanced by the learned A.R. of the assessee carry weight since no penalty could be levied for non-filing of statement under sections 50(1) and 50(4) of the Income Tax Ordinance, 1979 and penalty could only be imposed under express provisions of law. In the case under review the penalty has not been imposed for default of any rules but for default of furnishing statutory statements for non -deduction of tax. The statements covered by section 108(b) are under section 139 to section 144. Even the Assessing Officer has not specifically mentioned under which section the statement was due. Perusal of judgment cited as 1998 PTD (Trib.) 3507, also is in support of the assessee on all fours. The relevant portion of the judgment cited above is reproduced as under:
"Thus on perusal of that amendments introduced by C.B.R. vide S.R.O. 1116(1)/95, dated 23-11-1995, it is clearly indicated that Wherever any statement was required to be furnished under a particular section the said section was specifically inserted in the marginal note and the body of rule. Conversely, it can be taken that if no section is inserted in the marginal note and body of a rule the statement or information is not required under any particular section but it is in the sort of general requirement. The result would be that in the absence of a particular section in any rule, it would not be deemed to be requirement of that particular section and when it is read with section 108(b) of the Income Tax Ordinance providing penalty for failure to furnish any certificate, statement, accounts or information specified in section 108, no penalty would be levied for default in furnishing of such statement. The penalty under section 108(b) shall be levied for default in furnishing of such statements which are specifically required to be furnished in the rules under the sections specified in section 108(b)."
5. Resultantly, the impugned order with regard to setting aside is vacated. The penalty order, dated 14-3-1998 is ordered to be cancelled, being illegal
6. The assessee's appeal stands accepted.
M.B.A./58/Tax(Trib.) Appeal accepted