Penalty

At its core, the principle of proportionality requires that when an administrative authority exercises discretionary power, it must strike a fair balance between the adverse effects of its decision on the rights, liberties, or interests of individuals and the legitimate aim or purpose the decision seeks to achieve

A more refined version of the principle of proportionality analysis adopts a structured, four-stage test, requiring courts to address the following questions to determine whether an impugned measure is constitutionally or legally justifiable, which includes: (i) Legitimacy: Does the action pursue a legitimate objective recognized by law? (ii) Suitability (Rational Connection): Is the measure capable of achieving that objective, i.e., is there a rational nexus between the means employed and the aim pursued? (iii) Necessity: Could the same objective have been achieved through a less restrictive or less onerous alternative? and (iv) Proportionality stricto sensu (Balancing): Does the measure maintain a fair balance between the severity of its impact on the individual and the importance of the public interest it serves?

Moreover, Articles 4, 14 and 25 of the Constitution collectively impose a duty upon the courts to ensure that executive or disciplinary measures not only pursue lawful objectives but do so in a manner that is just, fair, and proportionate

In disciplinary jurisprudence, proportionality maintains a delicate balance between public and private rights

While civil servants are entitled to procedural fairness and protection from arbitrary sanctions, these rights must be balanced against the compelling public interest in maintaining the integrity and accountability of public institutions

The principle of proportionality at its most functional level ultimately hinges on a singular, decisive question: whether the interference with private rights is justified by a corresponding and weighty public interest

This balancing offers a structured framework for assessing the sustainability of disciplinary penalties

The penalty imposed must be evaluated not in isolation, but in relation to the degree of harm caused to the public interest and the severity of intrusion upon the private rights of the officer

A constitutionally and administratively sustainable penalty is one that serves a legitimate public objective without inflicting excessive or unnecessary harm upon individual rights

The test is not merely whether discipline is warranted, but whether the measure adopted strikes a fair and reasonable equilibrium between the legitimate aims of the institution and the human dignity of the individual

Accordingly, the principle of proportionality, in its clearest form may be said to rest on the following standard: The action taken achieves a necessary public goal without causing disproportionate harm to private interest

Furthermore, while proportionality strengthens constitutional adjudication when properly employed, its misuse can undermine the very values it seeks to uphold

A disproportionate decision may also violate the rule of law.

At its core, the principle of proportionality requires that when an administrative authority exercises discretionary power, it must strike a fair balance between the adverse effects of its decision on the rights, liberties, or interests of individuals and the legitimate aim or purpose the decision seeks to achieve

A more refined version of the principle of proportionality analysis adopts a structured, four-stage test, requiring courts to address the following questions to determine whether an impugned measure is constitutionally or legally justifiable, which includes: (i) Legitimacy: Does the action pursue a legitimate objective recognized by law? (ii) Suitability (Rational Connection): Is the measure capable of achieving that objective, i.e., is there a rational nexus between the means employed and the aim pursued? (iii) Necessity: Could the same objective have been achieved through a less restrictive or less onerous alternative? and (iv) Proportionality stricto sensu (Balancing): Does the measure maintain a fair balance between the severity of its impact on the individual and the importance of the public interest it serves?

Moreover, Articles 4, 14 and 25 of the Constitution collectively impose a duty upon the courts to ensure that executive or disciplinary measures not only pursue lawful objectives but do so in a manner that is just, fair, and proportionate

In disciplinary jurisprudence, proportionality maintains a delicate balance between public and private rights

While civil servants are entitled to procedural fairness and protection from arbitrary sanctions, these rights must be balanced against the compelling public interest in maintaining the integrity and accountability of public institutions

The principle of proportionality at its most functional level ultimately hinges on a singular, decisive question: whether the interference with private rights is justified by a corresponding and weighty public interest

This balancing offers a structured framework for assessing the sustainability of disciplinary penalties

The penalty imposed must be evaluated not in isolation, but in relation to the degree of harm caused to the public interest and the severity of intrusion upon the private rights of the officer

A constitutionally and administratively sustainable penalty is one that serves a legitimate public objective without inflicting excessive or unnecessary harm upon individual rights

The test is not merely whether discipline is warranted, but whether the measure adopted strikes a fair and reasonable equilibrium between the legitimate aims of the institution and the human dignity of the individual

Accordingly, the principle of proportionality, in its clearest form may be said to rest on the following standard: The action taken achieves a necessary public goal without causing disproportionate harm to private interest

Furthermore, while proportionality strengthens constitutional adjudication when properly employed, its misuse can undermine the very values it seeks to uphold

A disproportionate decision may also violate the rule of law.

Appellant (Insurance Company, being authorized to undertake non-life insurance business and to carry on Window Takaful Operations /WTO), was penalized by the Commission

Argument of the appellant, relying on case titled Takaful Pakistan Limited reported as 2016 CLD 840, was that the Commission may take a lenient view and set aside the penalty imposed for contravention of the Takaful Rules, 2012

Validity

Appellate Bench had perused the case law relied upon by the appellant i.e. Takaful Pakistan Limited [2016 CLD 840), however, said case law was not binding on the Appellate Bench because it had been passed by a Commissioner in the course of the Commission's original jurisdiction

Appellate Bench was an appellate forum of the Commission, therefore, orders passed by a subordinate or lower authority were not binding for the Bench

Appellate Bench found no reason to interfere in the merits of the impugned order

Appeal was dismissed.

Notion of proportionality requires that the punishment ought to reflect the degree of moral culpability associated with the offence for which it is imposed.

Notion of proportionality requires that the punishment ought to reflect the degree of moral culpability associated with the offence for which it is imposed.

Perusal of relevant clause of the "Master Murabaha Finance Agreement" (having been relied upon by the plaintiff/bank itself to justify late payment charges) showed that where amount payable by the customer under the principal documents was not paid by a specific date or within a week of the demand, the said amount be paid by the customer as charity @ 18% to the bank for donation by the bank on behalf of the customer for charity purposes

Such amount of charity claimed by the bank/plaintiff was not covered under the finance facility under S.2(d) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance 2001 ') as said amount was merely a penalty, which was not permissible under the law

Charity or gift is something the doner gives or grants with his free will and can not be recovered as compulsion

Thus, the amount claimed as late payment charges / charity by the bank/plaintiff was declined

After excluding the amount claimed as late payment charges by the bank / plaintiff , suit was decreed in favour of plaintiff / bank and against defendants jointly and severally together with costs and cost of funds as contemplated by S.3 of the Ordinance, 2001.

Division Bench of High Court while proceeding in appeal observed that the appellant, a Qazi, had acted in aid of accomplishing voracious whims of parties to plunder the property of public exchequer, as such, a show cause notice was issued to the appellant wherein almost thirty cases were noted to have been mishandled on judicial side by the appellant

Enquiry officer concluded that the appellant was careless, had decided cases in haste without adhering to the prevailing law, which proved negligence, misconduct and illegality on his part

Major penalty of compulsory retirement from service was imposed on the appellant vide impugned notification

Validity

Appellant had failed to justify the circumstances which had compelled him to decide suit(s) hastily, without recording evidence and giving reasons in deciding the cases

Conduct of the appellant besides being perfunctory was also tainted with mala fide and showed extraneous consideration on his part

Appellant had failed to justifiably rebut the allegation leveled against him rather had pleaded the same as mistake

Such could not be considered a valid excuse by a judicial officer

When ignorance of law is considered as no excuse in the matter of a layman, how can it be taken as a valid ground in the matter of a judicial officer, who was vested with the power to exercise the original jurisdiction of Qazi Court and decide the fate of the cases amongst the general public

Appeal was dismissed.

Although compulsory retirement has been prescribed in the Balochistan Civil Servants (Efficiency and Discipline) Rules, 1992, as a major penalty yet it differs from dismissal and removal from service as it does not stipulate penal consequences, inasmuch as, a person retired compulsorily is entitled to pension and other retiral benefits proportionate to the period of service standing to his credit.

Plea of the appellant (registered person) was that S.11 of the sales Tax Act, 1990, for being related to short payment of tax , could only be invoked for assessment purposes and not for penalty

Held, that 'sales tax' included the tax, additional tax, default charge, a fine, penalty of any other sum payable under the provisions of the Sales Tax Act, 1990, or the Rules made thereunder

Sales tax (including penalty) could only be assessed and recovered under S. 11 of the Sales Tax Act, 1990, hence the contention of the appellant (registered person) was turned down

Tribunal upheld the impugned orders passed by both authorities below for having been passed in accordance with law

Appeal filed by the taxpayer (registered person) was dismissed, in circumstances.

Plea of the appellant was that invoices-in-question could not be issued in prescribed manner due to some connectivity problem of the software with the internet in the computerized system at relevant time ; and that the same were duly shown in monthly sales tax returns, hence no violation of law and tax evasion had been committed

Validity

Record revealed that appellant had also been penalized for similar default on issuing invoices on different dates, which showed the regular involvement of the appellant in issuing invoices outside POS system

Every person integrated with the FBR system was required to conduct transactions in the prescribed manner and was liable for penal consequences in case of committing default

Issuance of invoices outside the POS system had not been denied by the appellant, rather had contested the default by raising the ground / plea of internet connectivity problem, which amounted to an admitted position that the appellant was habitual in committing such default as penalty was also imposed on appellant (registered person ) against other invoices of different dates

Record also showed that the appellant had not pursued the matter with due diligence before the authorities below rather had avoided the proceedings there

Plea / ground taken by the appellant appeared to be an afterthought, which was neither convincing nor substantial

Commissioner Appeals had rightly confirmed the penalty order, which was nether arbitrary nor fanciful

Tribunal upheld the impugned orders for having been passed in accordance with law

Appeal filed by the taxpayer(registered person) was dismissed , in circumstances.

Section 38 subsection 1(b) of the Competition Act, 2010 provides that an undertaking can be penalized, after the undertaking concerned has been given an opportunity of being heard, if it is determined that the undertaking has failed to comply with an order of the Commission made under the Competition Act, 2010.

Such is only possible when undertakings comply with the orders given by the Commission in matters where violation of the Act have taken place.

Commissioner (Appeals) while dismissing the appeal, declared the appellant to be a maintenance and cleaning service provider

Validity

Job of appellant comprised of lifting, transportation and disposal of all types of garbage/solid waste from different areas to landfill sites and not to provide janitorial , maintenance or cleaning services

Taxable service, as per S. 3 of Sindh Sales Tax on Services Act, 2011, was a service listed in the Second Schedule of the Act

Lifting and transportation of garbage from one place to the other was not listed in the Second Schedule as a specific service

Commissioner (Appeals) had erroneously held that 'specialized cleaning services' duly covered the economic activities was performed by the appellant

Commissioner (Appeals) by enlarging the scope of definition of 'maintenance or cleaning' could not include lifting and transportation of garbage into the same

Penalty and default surcharge could be imposed by revenue department where any person had committed or caused to commit tax fraud and department through convincing evidence established that the same had been done knowingly, dishonestly or fraudulently and without lawful excuse

Orders passed by forums below were set aside

Appeal filed by tax payer was allowed and that of department was dismissed.

Appellant was an Indenter against whom order of compulsory registration under S.24-B of Sindh Sales Tax on Services Act, 2011 was passed and penalty for a sum of Rs.100,000/- was also imposed upon him

Appellate Authority maintained order-in-original passed by authorities

Validity

Appellant was a resident person and was providing and rendering service of Indenter within Province

Appellant having failed to get registration, it was rightly registered compulsorily under S.24-B of Sindh Sales Tax on Services Act, 2011

When two types of penalties were provided under law, Assessing Officer was duty-bound to justify imposing of maximum penalty

Two types of penalties were provided to cater different situations but it was not mentioned as to under which situation lesser penalty could be imposed and under what situation maximum penalty could be imposed

Both order-in-original and order-in-appeal to the extent of imposing maximum/higher penalty of Rs.100,000/- suffered from legal infirmities and were not tenable under law

High Court set aside penalty imposed in order-in-original by Assessing Officer

Appeal was allowed accordingly.

Trustees of the appellant (Trust) were imposed upon penalties for having breached the provisions of S. 227 of the Companies Ordinance, 1984, by maintaining huge amount of funds in the form of cash and cash equivalent whereas they were bound to deposit the fund amount in the special savings account

Validity

Trust had breached the provisions of S. 227 of the Companies Ordinance, 1984 by maintaining substantial amount of funds in the form of cash and cash equivalent when they were duty bound to deposit the fund amount in the special savings account

Contention of appellant that the violation was unintentional and that all funds were subsequently deposited in the Bank had no merit as no evidence was provided to that effect

Impugned order was upheld.

Meaning.

Only a "manufacturer" could be punished and directed to pay compensation for violation of S. 19.

Penalty was to be imposed when there existed a guilty mind present with an element of mens rea and penalty disproportionate to gravity of an offence was as much illegal as the act calling for imposition of the same.

Provisions of Rr.4 and 29 of Private Educational Institutions (Registration and Fee Determination) Rules, 2016, provided fine of Rs.3000/- and 2000/- respectively for each day during the period of offence

Validity

Provisions of S.19 of Islamabad Capital Territory Private Educational Institutions (Registration and Regulation) Act, 2013, provided that whoever violated provisions of the Act or Private Educational Institutions (Registration and Fee Determination) Rules, 2016, would be liable to be punished with imprisonment which could extend to one year or with fine which could extend to Rs.5000/- for each day during the period of offence

High Court set aside the provisions of R.4(6) and 29 of Private Educational Institutions (Registration and Fee Determination) Rules, 2016, as the same were ultra vires S.19 of Islamabad Capital Territory Private Educational Institutions (Registration and Regulation) Act, 2013.

Question before the High Court was whether Appellate Tribunal could have reduced the mandatory penalty imposed on taxpayer

Validity

Penalty had to be imposed in compliance with provisions of law and quantum of the same must be proportionate to the gravity of default committed by a person and the forums below had rightly found that levy of extreme amount of penalty was not justified

Penalty could be reduced/remitted /waived by the authority in exercise of jurisdiction conferred upon it by a statute

Keeping in view the facts of the present case, there was no mens rea or mala fide on part of taxpayer or loss to the Revenue caused by the taxpayer and such findings arrived at by the Appellate Tribunal were findings of fact which were based on appreciation of facts and correct application of law

No question of law was therefore made out requiring interference by the High Court in its jurisdiction under S.47 of the Sales Tax Act, 1990

High Court declined to exercise jurisdiction under S.47 of the Sales Tax Act, and reference was dismissed, accordingly.

Clause 11 of the Higher Education Commission Plagiarism outlined the penalties for plagiarism for teachers, researchers, staff and students

Penalty of 'ban on foreign travel relating to research' had not been provided in Cl.11

Constitutional petition was allowed and notification imposing penalty of ban on foreign travel was set aside accordingly.

Inquiry Officer recommended major penalty of recovery of Rs.108,536 and reduction to a lower post and pay scale from the current post for a period of two years but competent authority imposed major penalty of removal from service and recovery of said amount

Validity

Competent authority was not bound by the recommendations, of Inquiry Officer qua the award of penalty to the accused officer

If competent authority was not inclined to agree with the recommendations of Inquiry Officer then it had to give notice to the accused officer and had to pass a reasoned order for disagreeing with the recommendations of Inquiry Officer and for enhancement of punishment with conscious application of mind

Competent authority had not made any specific reference to the evidence or material which was found favour with the same to award major penalty of dismissal from service

Major penalty of dismissal from service did not appear to be in conformity with the evidence on record

Impugned orders were declared to be illegal and without lawful authority

Authority was directed to re-consider the matter and decide same afresh keeping in view the entire evidence available on record and after affording an opportunity of hearing to the employee in accordance with law within a stipulated period

Constitutional petition was disposed of in circumstances.

Penalty proceedings being criminal one, it was mandatory for department that specific amount of penalty and default surcharge imposed against taxpayer must be properly confronted in show-cause notice.

Complainant was selected for audit under S. 72B of the Sales Tax Act, 1990 and per contention of Department after issuing of three notices to complainant, he failed to provide sales tax record for audit and thus violated previsions of S. 25 of the Sales Tax Act, 1990 and therefore, penalty under S. 33(9) of the Sales Tax Act, 1990 was imposed and thereafter assessment was made

Contention of complainant was that notice was issued on 18.03.2015 and assessment was completed on 26.03.2015 and that per Department's own Circular, at least 15 days were required for compliance of the same

Federal Tax Ombudsman observed that passing of assessment order without providing sufficient time to complainant, being against Department's own instructions, tantamount to maladministration under S. 2(3)(i)(a) of the Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000

Federal Tax Ombudsman recommended that Department direct concerned Commissioner to revisit the impugned assessment order under S. 45-A of the Sales Tax Act, 1990 and pass fresh order after affording opportunity of hearing to the complainant and considering complainant's viewpoint

Complaint was disposed of, accordingly.

In case of violation of S. 10 of Competition Act, 2010, Competition Commission is empowered to impose penalty on violating party under S. 38 of Competition Act, 2010

Under S. 31(1)(c) of Competition Act, 2010, Commission may require undertaking concerned, to take such actions as may be necessary to restore previous market conditions and not to repeat prohibitions specified in S. 10 of Competition Act, 2010.

Normal penalty for qatl-i-amd is death but when there are extenuating circumstances leading to commit murder of deceased then courts are reluctant to award normal penalty and rather have inclined to award life imprisonment.

Imposition of penalty to perform a statutory obligation or to indulge into glaring, blatant and grave violation of statutory provision was exercised under relevant provision of law and under doctrine of detoriant punishment

Imposition of penalty needed to be exercised judicially keeping in view all relevant circumstances entailing a particular case.

Respondent claiming that Director General of Lahore Development Authority (LDA) had passed an order requiring respondent to pay a penalty before issuance of completion certificate

Lahore Development Authority (LDA) denied such claim of respondent

Whether Lahore Development Authority (LDA) had approved any penalty for issuance of completion certificate was a factual controversy, which could not be decided by the High Court under its constitutional jurisdiction

Question of whether such penalty was imposed or approved by the competent authority was disputed, therefore, High Court could not have passed an order under its constitutional jurisdiction directing LDA to issue challan for the penalty and thereafter issue completion certificate on its payment

Supreme Court set aside the order of the High Court and directed that constitutional petition filed before the High Court should be treated as a suit filed before the civil court, where the parties may raise all legal and factual objections

Appeal was allowed accordingly.

Where the public authority was at fault in delaying the collection of penalty, the defendant could not be burdened with any additional liability by calling upon him to pay penalty at the present rate (instead of the rate applicable at the time of imposing of penalty).

Survey was carried out by an official of LDA, who noted minor violations of the approved construction plan, which were compoundable upon payment of penalty

Director, LDA passed an order requiring respondents to pay a penalty of Rs. 33,992 for issuance of completion certificate

Respondents were willing to pay the said penalty, however the challan for payment of penalty was not issued by LDA on one pretext or another, and the matter remained pending for over three decades

Validity

Deviation/violations of the approved building plan were minor

Plot in question was commercial and could be used for commercial purposes, thus conversion of some flats in the building into shops was not a change in the use of building, but simply a violation of the construction plan, which was compoundable

Director, LDA had also accorded approval for regularization of violations of the approved building plan upon payment of penalty

No justified reason existed for LDA not to issue the challan for payment of penalty

High Court had rightly directed LDA to issue completion certificate to respondent upon payment of penalty

Appeal was dismissed accordingly. [Minority view].

Civil servant/accused, who was serving as Fuel clerk, was proceeded against for misconduct as he allegedly maintained a bogus record on the asking of his superiors/co-accused

Competent authority awarded civil servant penalty of reduction by two steps in time scale for two years

General Manager of Railways/Appellate authority during hearing of appeal of some of the co-accused issued suo motu notice of enhancement of penalty to civil servant and thereafter enhanced the penalty to removal from service

Service Tribunal allowed appeal of civil servant and restored original penalty of reduction by two steps in time scale for two years

Validity

Nature of misconduct on part of civil servant/accused was distinct from that of the co-accused person, who were his immediate superiors and on whose asking he had made bogus entries

General Manager Railways/Appellate authority had to give prior notice to the civil servant in terms of Paragraph 1725(a) of Pakistan Railways Personnel Manual and such notice had to specify the reasons for the proposed enhancement in penalty

Show-cause notice issued to civil servant did not explicitly give reasons for enhancement of penalty and merely mentioned that penalty originally awarded did not commensurate with the gravity of the offence

Finding of Service Tribunal were not arbitrary, against the record or the law declared

Railway authorities/petitioners had not raised any question of public importance within the meaning of Art.212(3) of the Constitution

Petition for leave to appeal was dismissed in circumstances and leave was refused.

No allegation of counterfeit / fake was mentioned in the show cause notice and as such the original order and subsequent appellate order passed on the ground which was not mentioned in such notice was illegal and void

Consequently, confiscation, auction of cigarettes and imposition of penalty under R.210 of the Central Excise Rules, 1944 were also illegal, void and without lawful authority.

Only counterfeit / fake goods could be confiscated outrightly along with the machinery used in manufacturing thereof.

Penalty was imposed under R.210 of the Central Excise Rules, 1944 whereas show cause notice was issued under provision of S.36(1) of the Sales Tax Act, 1990 without invoking penal provision of S.33 of the Sales Tax Act, 1990 applicable at the relevant time

Since no penal provision of Sales Tax Act, 1990 was mentioned in show cause notice, the penalty imposed under R.210 of the Central Excise Rules, 1944 without issuing show cause notice under R.10 of the Rules was beyond the jurisdiction of the adjudicating officer

Penalty imposed was without jurisdiction and the same was illegal, void an without lawful authority.

Disqualification clause under S. 99(cc) of Representation of the People Act, 1976, entails penalty which is attracted only if it is established that the degree secured by returned candidate was forged one and does not extend to attract degrees which have secured validly after passing examination

Passing of examination in deviation of some rules of the university like the one by appearing in both parts of the examination in the same year, in no way, invalidate a degree.

Cheque issued by accused to the complainant having been dishonoured due to insufficient funds, complainant had lodged F.I.R. against accused under S.489-F, P.P.C.; however accused was acquitted under S. 249-A, Cr.P.C.

Validity

Dispute between the parties was in respect of property

Complainant, in his statement under S.154, Cr.P.C. had not stated reason for which the cheque had been issued and had admitted that he had received a pay order in lieu of the cheque in question

Complainant, therefore, did not have any case to complain

Held, it was not every instance of a cheque being dishonoured which could attract penal consequences of provision of S.489-F, P.P.C.; only when a cheque was issued towards repayment of a loan or fulfilment of an obligation; and if such cheque was dishonoured on presentation, would attract consequences envisaged by S.489-F, P.P.C.

In the present case, cheque was issued because accused had received money from the complainant and complainant received back the amount of cheque over and above; there was no repayment of loan and no fulfilment of an obligation any more

In any case provisions of S.489-F, P.P.C. could not be attracted to the case against accused

No ground for interference with the order passed by court below had been made out, in circumstances.

Petitioner filed constitutional petition, in the year 2008 for correction of his date of birth, which was dismissed in limine, on the ground that the petitioner had not moved within two years, prescribed on the date on which his service book was opened, for correction of his date of birth

Petitioner filed application to the Registrar of High Court for change of his date of birth suppressing the fact of dismissal of his earlier constitutional petition

Chief justice of the High Court allowed said application

Petitioner prayed for implementation of the Chief Justice's order

Validity

Government being the appointing authority, the matter regarding correction of date of birth of the petitioner in term of R.4 of the Sindh Judicial Service Rules, 1994, could only be decided by the Government

Chief Justice of High Court had no power of changing the date of birth of a judicial officer except that he might send his recommendations to the Government which apparently would become binding unless for some reason not brought to the knowledge of the Chief Justice, recommendations might not be accepted rather such aspect of the matter would have to be brought to the knowledge of Chief Justice for consideration

Administrative orders were always subordinate to the judicial orders

By obtaining administrative order merely that of recommendatory nature, the petitioner could not be allowed to overreach or nullify the decision in his own earlier petition

Petitioner had been seeking implementation of the order of Chief Justice knowing fully well that there existed already a judicial decision disallowing his request for changing his date of birth which decision apparently had not been challenged by the petitioner rather the petitioner had embarked upon a journey which was totally uncalled for and illegal

High Court dismissed the constitutional petition with cost of Rs. 20,000.

No penalty should be imposed in case of absence of mala fides.

Where there was a case of confusion rather than wilful evasion, penalty can be remitted.

No penalty should be imposed where there is no wilful evasion.

Imposition of penalty is illegal where the evasion of duty was not wilful.

No person can be penalized on basis of suspicion.

Negligence on the part of civil servant, who during whole period of his service, had earned no adverse remarks except the one on account of negligence

Imposition of major penalty did not commensurate with the kind of the act of negligence committed by the civil servant and his case was that of imposition of minor penalty which was modified by the Supreme Court accordingly.

[CIT v. P.M. Shah (1993) 203 ITR 792-(Bom.) and CIT v. Dharamchand L. Shah (199'3) 204 ITR 462 (Bom.) overruled]

Indian Income Tax Act, 1961, S.273A.

Indian Income Tax Act, 1961 S.282.

Indian Income Tax Act, 1961, Ss. 271(1)(c) & 274.

Indian Income Tax Act, 1961, S.271(1 )(c).

Assessee, on the one hand had been allowed to claim exemption from tax in respect of any item of receipt ii it genuinely felt that exemption was available to him in law and even ii the exemption was disallowed, assessee had been provided protection from levy of penalty for concealment of income or furnishing of inaccurate particulars of income and on the other hand the Revenue had been allowed to levy penalty under S.111 of the Income Tax Ordinance, 1979, provided the burden was discharged by the Revenue by proving that an assessee had deliberately claimed exemption from tax in respect of any item of receipt which was not genuine.

Presumption of concealment 'where assessee offers explanation in respect of credit which Assessing Officer considers to be false

Revised return filed after books of account had been impounded for scrutiny

Revised return could not be treated as a voluntary one under S.139(5)

Penalty could be imposed for concealment of income

India Income Tax Act, 1961, Ss. 139 & 271.