2005 PTD 307

W.T.A. No.90/LB of 2001, decided on 27th September, 2003. Versus W.T.A. No.90/LB of 2001, decided on 27th September, 2003.

Citation2005 PTD 307

CourtIncome Tax Appellate Tribunal

ORDER

This appeal by Revenue arises out of order of the CIT(A), Zone-I, Lahore, dated 10-10-2000.

2. It is the Departmental contention that deletion of penalty levied under section 12(7) of the Finance Act, 1991 was unjustified and reliance placed by CIT(A) on ITA No. 1872/LB/97 (Assessment Year 1992-93), dated 26-5-1998, is misconceived in law.

3. According to the DR, the case of the assessee/respondent is not "on all fours" with the case dealt with in I.T.A. No. 1872/LB of 1997 (Assessment year, 1992-93), dated 26-5-1998. That being so, it is contended that levy of penalty under section 12(7) is consistent with statutory stipulation and should therefore be upheld.

4. Assessee/respondent is not present and no adjournment has been sought. The appeal will be decided in assessee's absence on merits.

5. We have looked into the matter and we find that the rationale for deletion of penalty under section 12(7) in I.T.A. No. 1872/LB of 1997 (Assessment year, 1992-93), dated 26-5-1098 was that the C.B.R. having issued multiple circulars on matter pertaining to filing of CAT return only confused and confounded the Corporate assessee's and for, that reason it would not be proper to levy penalty under section 12(7) for default on their part. In the case of the present assessee, however, we find that it should have been abundantly clear given the assessments, made under CAT in a large number of cases that there was indeed a legal requirement for filing of Corporate Assets Tax return vide section 12(4) of the Finance Act, 1991 in the case of all those corporate assessee's whose assets exceeded the stipulated threshold. Morel importantly, even the precise composition of the assets envisaged under CAT law had become quite clear as a result of the judgments recorded by the ITAT. Not only have many CAT assessments been made and appeals decided by the ITAT but furthermore even the vires of levy of Corporate Assets Tax had been challenged before the Hon'ble Supreme Court of Pakistan and judgment had been passed by the apex Court (2001) 84 Tax 117. The apex Court had unequivocally rejected the legal challenge to levy of Corporate Assets Tax and had held that the Assessing Officer was competent to make Corporate ' Assets Tax assessments and also to impose additional tax and penalty in case of statutory default. Under these "changed circumstances" therefore, we hold that it would not be correct to say that the present assessee was not clear in its mind regarding the statutory obligation under CAT law. "Much water has thus flowed under the bridge" since the Tribunal pronounced judgment in I.T.A. No. 1872/1_13 of 1997 (A.Y. 1992-93), dated 26-5-1998. The failure of the present assessee to file CAT return and not to respond to show-cause notices issued under section 12(7) has therefore rightly resulted in levy of penalty under section 12(7). Importantly the Tribunal in W.T.A. No. 1230/LB of 2000 (Assessment Year, 1992-93), dated 15-4-2002, has upheld the levy of penalty under section 12(7) as the circumstances then indicated that there was no confusion regarding the legal requirement for filing of CAT return, as in the case of the present assessee . We will accordingly vacate the order of the CIT(A) and reinstate the order of the DCIT.

6. Resultantly, the departmental appeal is accepted.

H.B.T./324/Tax (Trib.) Appeal accepted.