| Case ID |
4340f951-7bb6-4e17-81cf-9c67c0494e86 |
| Body |
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| Case Number |
I.T.R. No. 82 of 1993 |
| Decision Date |
Apr 25, 2008 |
| Hearing Date |
Apr 09, 2008 |
| Decision |
The Income Tax Appellate Tribunal determined that the imposition of a penalty for failing to file a return was not justified due to the absence of deliberate intention to evade tax. The Tribunal noted that the respondents, having just started their business and incurred losses in their first year, reasonably believed they were not required to file a return. The High Court upheld the Tribunal's decision, emphasizing that the burden of proof lies with the appellant to establish that the respondents acted mala fide in failing to file their return. The reference application by the Commissioner of Income Tax was dismissed, maintaining the Tribunal's order. |
| Summary |
This case revolves around the interpretation of the Income Tax Ordinance, 1979, particularly sections 108 and 55, regarding the imposition of penalties for non-filing of income tax returns. The Sindh High Court examined whether the respondents, who had not filed their return due to their understanding of their financial situation in the first year of business, could be penalized. The court found that the respondents had a reasonable cause for their actions, as they sustained losses and believed they were not obliged to file a return. The decision highlighted the importance of assessing the bona fides of the taxpayer's belief regarding their tax obligations. This case serves as a pivotal reference for understanding the application of penalties in tax law, particularly in instances where taxpayers may genuinely misunderstand their obligations due to unique circumstances such as starting a new business. |
| Court |
Sindh High Court
|
| Entities Involved |
Not available
|
| Judges |
MRS. YASMIN ABBASEY,
PIR ALI SHAH
|
| Lawyers |
Aqeel Ahmed Abbasi,
Muhammad Fareed
|
| Petitioners |
COMMISSIONER OF INCOME TAX
|
| Respondents |
Messrs SKY PAK INTERNATIONAL (PVT.)
|
| Citations |
2008 SLD 163,
2008 PTD 1233,
(2008) 98 TAX 98
|
| Other Citations |
Commissioner of Income Tax, Assam v. Assam Automobile and Accessories Agency (1978) 111 ITR 411,
Commissioner of Income Tax v. N. Khan and Brothers (1973) 92 ITR 338 (All),
(1977) 107 ITR 214,
The State v. Sardar Ataullah Khan Mangal PLD 1967 SC 78,
Messrs Elahi Cotton Mills Ltd. and others v. Federation of Pakistan through Secretary, Min. Finance, Islamabad and 6 others PLD 1997 SC 582
|
| Laws Involved |
Income Tax Ordinance, 1979
|
| Sections |
108,
55
|