The Commissioner of Income Tax and Wealth Tax, Sialkot Zone, Sialkot claims that the order recorded by a Division Bench of the Income Tax Appellate Tribunal, Islamabad Bench on 23.11.1999 gives rise to the following question of law to be considered and answered by this Court:-- "Whether on the facts and in the circumstances of the case, the. Learned ITAT was legally justified in maintaining the order of the CIT (Appeals) whereby penalty imposed u/S. 108 at Rs, 36,200/- was reduced to Rs. 5,430/- whereas the provisions of the said section do not permit any discretion with regard to the quantum of penalty leviable and the amount of penalty levied by the Assessing Officer was in conformity with the prescriptions of the section."
2. The respondent, an individual and an assessee of the Income Tax Department derived income from manufacturing and sale of spare parts. For the assessment year 1994-95 he was burdened with a penalty of Rs. 36,200/- on account of his failure to have filed return under Section 55 of the late Income Tax Ordinance, 1979. The CIT (Appeals) on 6.7.1996 finding the amount of penalty to be excessive and on the higher side directed its reduction to Rs. 5,430/-. That order was maintained by a Division Bench of the Income Tax Appellate Tribunal, Islamabad on the ground that the assessee was a small businessm an and that he had returned nil income for the year under consideration as he was under the impression that no taxable income was earned by him during that year. Further that on being served with a notice under Section 56 of the late Income Tax Ordinance, 1979, the assessee did file a statement of sales and expenses on a plain paper, on the ground of nonavailability of the prescribed income tax return. These facts, when taken together according to the Tribunal, were sufficient to support the first appellate order of reduction in the amount of penalty.
3. Heard the learned counsel for the appellant. The issue if a penalty imposed with reference to the provisions of law providing for fixed amount in terms of period of default in days could be reduced by the appellate forums stands settled as far this Court is concerned, It is not denied by the learned counsel for the revenue that the same question of jaw was earlier considered by a Division Bench comprising both of us in WTA No. 31/2003, decided on 23.1.2003. The operative part of that order as contained in para-6 thereof reads as under:- ^'However, we will not agree, In the first instance the question as framed is more in nature of an argument rather than posing a legal question. Secondly in a number of cases we have observed that the amount of penalties prescribed in law fixed with reference to days of default both on income as well as wealth tax side are at best mandatory and require to be followed by the Assessing Officer. These provisions do. Not derogate from the powers of the appellate forums both the Commissioner of Appeals as well as the learned tribunal. The penalty provisions do not in any manner control or govern the powers of the Tribunal while disposing of appeals under Section 24 of the Wealth Tax Act, 1963 or Section 135 of the late Income Tax Ordinance, 1979. In case the interpretation of the revenue that the fixed amount of penalties cannot be interfered with by the Commissioner of Appeals or the Tribunal is accepted then the provisions providing for appeal against such penalties will become redundant. That can never be the intention of law."
4. In yet another case re: Commissioner of Income Tax, Special Zone, Lahore v. Musarat Textile Mills Ltd., Faisalabad' (2006) 93 Tax 7 (H.C., Lah.), a Division Bench of this Court comprising one of us (Muhammad Sair Ali, J.) held that Appellate Commissioner and the ITAT had the jurisdiction, to reduce the fixed amounts of penalties provided for in the late income Tax Ordinance, 1979.
Therefore, the question both the forums were competent to grant relief in reducing the amount of penalty was answered in the affirmative.
5. Accordingly since the legal issue already stands resolved we will refuse to admit the question and decide this appeal in the light of the said judgments.
6. Disposed of.