| Case ID |
037c22ce-a8e9-49f5-bf76-63f353c6a05b |
| Body |
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| Case Number |
Appeal No. 1481 of 1957-58 |
| Decision Date |
May 04, 1959 |
| Hearing Date |
|
| Decision |
The appeal was allowed, and the penalty imposed on the dissolved firm was set aside. The Income Tax Appellate Tribunal determined that a penalty under section 28(1)(c) cannot be imposed on a firm that has ceased to exist. The Tribunal found that the Appellate Assistant Commissioner's order to uphold the penalty was not sustainable, as the firm had been dissolved prior to the imposition of the penalty. The Tribunal referred to previous rulings that established the principle that penalties cannot be applied to a defunct entity. |
| Summary |
This case revolves around the Income Tax Act, 1922, specifically addressing the legality of imposing a penalty on a firm that had been dissolved. The Income Tax Appellate Tribunal, Lahore, ruled on May 4, 1959, that the penalty of Rs. 2,000 under section 28(1)(c) was invalid as the firm in question had ceased to exist prior to the imposition of the penalty. The Tribunal highlighted the importance of the legal principle that penalties cannot be imposed on entities that no longer legally exist. The case references notable previous judgments and clarifies the legal interpretations surrounding sections 44 and 28 of the Income Tax Act. This ruling reinforces the understanding of tax liabilities and penalties in the context of dissolved partnerships, ensuring that defunct entities are not subjected to penalties that they cannot contest. The decision emphasizes the necessity for the proper application of tax law and the implications for firms undergoing dissolution, providing clarity for future cases involving similar circumstances. |
| Court |
Income Tax Appellate Tribunal, Lahore
|
| Entities Involved |
Not available
|
| Judges |
S. A. Mirza
|
| Lawyers |
Javaid Hashmi,
Mohd Afzal
|
| Petitioners |
Javaid Hashmi
|
| Respondents |
Mohd Afzal
|
| Citations |
1959 SLD 150,
(1959) 1 TAX 50,
1959 PTD 108
|
| Other Citations |
Mareddi Krishna Reddy v. Income-tax Officer Tenali [(1957) 31 I.T.R. 681],
S. V. Veerappan Chattiar and another v. Commissioner of Income-tax, Madras [(1957) 32 I.T.R. 411],
I.T.A. No. 1018 of 1957-58
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
22,
23,
25A,
28,
28(1)(c),
44
|