1986 PLP (Trib (PTD)

FARHAT ALI KHAN (MEMBER).‑‑The appellant an individual, failed to file his wealth statement under section, 58(2) of Income‑tax Ordinance, 1979 (hereinafter referred to as the 'Ordinance') for assessment year 1980‑

81. The Income‑tax Officer, therefore, levied penalty something to Rs.9,750 under section 108 of the Ordinance, at the rate of Rs.50 per day from 6th November, 19810 to 19th May, 1981. The appellant was also warned that a further penalty of Rs.100 per day would be levied in case of default. The appellant felt aggrieved and went up in appeal and the learned Appellate Assistant Commissioner by his order, recorded on 8th September 1981 in Income‑tax Appeal No. AAC/F/(K)(W)/457, dismissed, the appeal after considering provisions of section 58(2), with the following observation: "It is manifest from the language of this provision that omission in filing of the required wealth statement was tantamount to omission in filing of the return of income. In other words, default of the provision of section 58(2) amounts to the same thing as default of the provisions of section 55 and would be liable to penalty in the same way. The Income‑tax Officer was, therefore, fully empowered under the law to penalise the appellant for not filing his wealth statement alongwith the return of income, as the default is not denied." Mr. M.... H.... in support of the second appeal invited our attention to section 108 of the Ordinance, which is as under:‑ "

108. Penalty for failure to furnish return of total income and certain statements. Where any person has without reasonable cause, failed 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 72 or subsection (3) of section 81; or (b) any certificate, statement accounts or information under section 51, 139, 140, 141, 142, 143, 143‑A or 144, the income‑tax Officer may impose upon such person a penalty not exceeding one hundred rupees for every day during which the default continues." Referring to various sections mentioned in aforesaid section the learned counsel for the appellant vehemently argued before us that as section 58 was not mentioned whereas both section 55 or 56 found place in clause (a) of section 108, it, therefore, necessarily follows that the legislature did not intend to levy any surcharge if default was committed under section 58(2) of the Ordinance. Mr. M.... H....therefore canvassed before us that the order of learned Commissioner of Income‑tax (Appeals) was not sustainable in law. Mr. M....F....the learned Departmental Representative stated at Bar that he had nothing to add than what has been said by both the Officer below.

2. We have heard both the learned counsel for the appellant as well as the learned Departmental Representative and have also perused both assessment as well as impugned orders. Before turning to the merits of the case we think it proper to reproduce hereinbelow the provisions of sections 55, 56 and

58. These sections are reproduced hereinbelow:‑ "

55. Return of total income.‑‑ (1) Every person,‑ (a) whose total income or the total income of any of any other person, in respect of which he is assessable under this Ordinance, for any income year (hereinafter referred to as the 'said income year') exceeds the maximum amount which is not chargeable to tax under this Ordinance; or (b) who has been charged to tax for any of the four income years immediately preceding the said income year, shall furnish a return of his total income or the total income of such other person, as the case may be, for the said income year. (2) The return of total income under subsection (1) shall be furnished: ‑ (a) in the case of a company, on or before the first day of August next following the income year or within fifteen days of the expiry of six months from the end of the income year, whichever is later; and (b) in every other case‑‑ (i) where the income year ends at any time between the first day of July and the 'thirty‑first day of December (both days inclusive), on or before the first day of August next following; and (ii) in other cases on or before the first day of October next following.

3. The Income‑tax Officer may, on sufficient cause being shown, extend the date for the delivery of the return so, however, that no extension of time for a period or periods amounting in all to more than fifteen days from the dates specified in subsection (2) shall be allowed except with the approval of the Inspecting Assistant Commissioner. "

56. Notice for furnishing return of total income.‑‑ The Income‑tax Officer may, at any time by notice in writing, require any person who, in his opinion, is chargeable to tax for any income year to furnish a return of total income for such year within thirty days. from the date of service of such notice or such longer or sorter period as may be specified in such notice or as the Income‑tax Officer may allow." "

58. Wealth statement.‑ ‑(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 (hereafter referred to as the 'wealth statement') in the prescribed form and verified in the prescribed mariner giving particulars of‑‑ (a) his total assets and liabilities as on the date or dates specified in such notice; (b) the total assets and liabilites of his spouse minor children and dependants 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 one hundred 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." From perusal of section 55 it appears that every person whose income exceeds the maximum amount which is not chargeable to tax under this Ordinance, or who has been charged to tax for any of the immediately four income years is required to file his return. The provision is mandatory as it has been laid down that such person shall furnish a return. Similarly, section 56 lays down that a person if was so required A shall file his return. Both the sections deal with the return, which is the first step in the direction of determination‑of tax liability of a person. However, subsection (2) of section 58 makes it obligatory on a person whose total income is not less than Rs.1,00,000 to file wealth statement alongwith his return. But section 58(1) vests the Income‑tax Officer with 'general power of requiring any assessee to furnish a wealth statement. Since the legislature gave the general power under subsection (1) of section 58 to the Income‑tax Officer irrespective or the amount of total income, it therefore, like sections 55 and 56 ensured that no default is made by an assessee if a notice is given to him under section 58(1) of the Ordinance. As such, while mentioning sections 55 and 56 in clause (a) of section 108, the legislature deliberately omitted to mention section

58. The reason was that it had provided by a separate section a provision for, penalty for non‑compliance with notice issued under section

58. Since the legislature has specially mentioned section 58 in section 110, therefore, it cannot be argued that it was a slop on the part of the legislature in omitting to mention it in clause (a) of section

108. Thus, the legal position which emerges out from above discussion is that if an assessee fails to flow the provisions of section 55 or section 56 of the ordinance, the Income‑tax Officer has power to impose penalty under section

108. Again, if an Income‑tax Officer requires an assessee to file his wealth statement under section B 58(1) of the Ordinance and he commits default, the Income‑tax officer can impose penalty under section 110‑of the Ordinance. But if an assessee fails to file his wealth statement alongwith his return, with due respect to learned Appellate Assistant Commissioner, no penalty care be imposed under section 108 of the Ordinance. Since section 108 is as penal provision. It is to be given strict iterpretation. In our judgment no penalty‑ can be imposed without a legislative authority which is not available to an Income‑tax Officer regarding default in filing wealth statement alongwith the return. We, therefore, agree with the contention of the learned counsel for the appellant and allow this appeal. The impugned orders of both the officers below are hereby vacated. M. Y. H. Appeal allowed.