1995 PLP (Trib (PTD)

MUHAMMAD MUSHTAQ (ACCOUNTANT MEMBER).

This appeal has been filed on behalf of the Income Tax Department challenging the order of the learned A.A.C., E-Range, Lahore vide A.O. No.172, dated 14-6-1986. 2.It is pertinent to mention here that in spite of service of call notice, no one has attended on behalf of, the respondent, hence, this appeal is being decided ex parte on merits. 3.The brief facts leading to this appeal are that the respondent in this case M/s. Al-Mumtaz Fertilizer Corporation, hereinafter also referred to as the assessee, is an individual earning his income from sale of fertilizer. For the assessment. year under consideration original assessment was completed. In this case under section 59(1) of the Income Tax Ordinance, 1979 at an income of Rs.18,

300. In the computation of income furnished by the assessee the assessee declared purchases to the extent of Rs.17,57,000 but subsequently the I.T.O. received the information that the assessee had actually made purchases to the extent of Rs.33,26,

638. On the basis of this information assessment already made was reopened under section 65 of the Income Tax Ordinance and re-assessment was completed in agreement with the assessee at Rs.66,000. 4.In furtherance of these proceedings the I.T.O. also imposed a penalty of Rs.16,722 under section 111 of the Income Tax Ordinance, 1979 for concealment of income. 5.Aggrieved by this imposition of the penalty, the assessee preferred first appeal. The learned AAC on the basis of case decided by the ITAT reported as 1986 PTD (Trio.) 129 deleted the penalty. 6.The Income Tax Department feels aggrieved by the relief allowed by the learned A.A.C. as above. As per grounds of appeal the contention of the Income Tax Department is as under: "(a) The learned A.A.C. is not justified in deleting the penalty imposed by the I.T.O. under section 111 of the Income Tax Ordinance, 1979. As per his own admission assessee is guilty of furnishing of inaccurate particulars of income arid not declaring the true particulars of income due to ignorance of Income Tax Law. (b) The offer of the assessee for the assessment year 1984-85 was restricted to the computation of total income. The I.T.O. did not enter into any agreement in respect of imposition of penalty for concealment."

7. The learned D.R. appearing on behalf of the Income Tax Department vehemently contended that the learned A.A.C. was not justified in deleting the penalty because the assessee committed concealment which attracted imposition of penalty. The learned D.R. further argued that the learned AA.C. has deleted the penalty on the ground that in this case assessment was made on agreed basis. The learned D.R. continued that agreement made with the assessee was only to the extent of computation of income and that the I.T.O. did not enter into any agreement with the assessee regarding imposition of penalty.

8. The question whether a penalty can be imposed where an agreed assessment has been made came under consideration of the I.TA.T. earlier. In the case reported as 1986 PTD (Trio.) 129 it has been decided that where an agreed assessment has been made, imposition of penalty is not exigible. Following the earlier decision of the I.TA.T. we are not inclined to interfere in the order of the learned A.A.C. 9.The appeal of the Income Tax Department fails. M.BA./110/T Appeal dismissed.