Penalty Section 182 Cannot Be invoked when No Loss of Revenue
Penalty Section 182 Cannot Be invoked when No Loss of Revenue: This blog discusses that in case no tax is payable along with return by the taxpayer, then provisions of section 182 of the Ordinance shall not be applicable on the taxpayer.
Facts in brief leading to the instant appeal are that the withholding agent was under legal obligation to monthly withholding statements u/s 165 of the Income Tax Ordinance, 2001 (hereinafter called the Ordinance) for the months of July 2015 to June, 2016.
Therefore, in order to know the compliance level, proceedings were initiated by way of issuance of show cause notice, which culminated in passing of order u/s 182(2) of the Ordinance dated 20.11.2017, wherein penalty amounting to Rs.10,000/- was imposed for the tax period July, 2015 to June, 2016.
Feeling aggrieved, the taxpayer preferred appeal before CIR(Appeals-III), Lahore, who vide appellate order dated 27.05.2019 upheld the treatment meted out by the assessing authority, against which the taxpayer has come up in further appeal before this Tribunal.
Mr, S.M. Raheel, learned counsel is present on behalf of the taxpayer, whereas none has tendered appearance on behalf ,of the department in-spite of proper service of notice. Therefore, exparte proceedings are conducted by way of disposal of instant appeal on merits,
The learned counsel appearing on behalf of the taxpayer has apprised the court that there is no loss of revenue involved in the instant case, therefore, penalty imposed by the taxation office and further confirmed by the learned CIR(Appeals) is quite unjustified. In support of his stance, he has furnished before us computer generated copies of the acknowledge slips in respect of filing of statements u/s 165 of the Ordinance showing no deduction of tax meaning thereby that there is no loss of revenue.
Therefore, in such like eventuality, I am inclined to penalty for the tax year under consideration by Nance on a reported judgment of Honourable Sindh High Court as 2013 PTD 387, wherein it has been held in an unequivocal manner that in case no tax is payable along with return by the taxpayer, then provisions of section 182 of the Ordinance shall not be applicable.
Therefore, the orders passed by both the authorities below are hereby vacated by way of acceptance of instant appeal. I order accordingly.
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