ORDER: MR MUHAMMAD JAWED ZAKARIA (JUDICIAL MEMBER).--(1). These appeals have been filed by the taxpayer against the Order No. 22 dated 07.07.2014 recorded by the CIR (Appeals-II) Karachi as well by the department against the order No. 23 dated 7.7.2014 on the following grounds:-- Grounds of appeal I.T.A. No. 745/KB/2014
(i) "That the order of the learned Commissioner Inland Revenue (Appeal-II) Karachi, dated: 07-07- 2014, for the Tax year 2012, is illegal, contrary to facts and without any justification and jurisdiction.
(ii)That the CIR(A) is not justified in not deciding the appeal on its merits.
(iii)That the learned CIR(A) is not justified in rejecting the appeal.
(iv)That the learned CIR(A) is not justified in confirming the order passed u/s. 182(1)(8) of the Income Tax Ordinance, 2001, imposing penalty at Rs. 25,000/-."
Ground of Appeal.
I.T.A. No. 664/KB/2014 (i)"That the order passed by the Commissioner Inland Revenue (Appeal-II), is not correct in law and against the fact and circumstances of the case.
(v)On the Acts in circumstances of the case, the learned CIR (Appeal-11), Karachi is not legally correct and deleted the amount of penalty at Rs. 50,000/- which was correctly charged on.
(vi)The learned CIR (Appeal-II), Karachi has ignored the "explanation" added by the legislature in Sr. No. 01 of Table of Section 182(1) of the Income Tax Ordinance, 2001, which is not correct in law.
(vii) On facts and in circumstances of the case, the learned CIR (Appeals) failed to appreciate that penalty at Rs. 50,000/- was correctly charged on no submission of requisite details/ documents u/s. 177 of the Income Tax Ordinance, 2001.
(viii) It is prayed that order of the learned CIR Appeals-11, Karachi may be vacated and order passed by the OIR, Audit-I, Unit-06, Zone-IV, RTO-III, Karachi u/s. 182(1) of the Income Tax Ordinance, 2001 may kindly be restored"
2. Brief facts of the case are that the appellant is an individual. These appeal are against the appellate order passed u/s. 129 of the Income Tax Ordinance, 2001 dated 07-07-2014 confirming the order passed by the Officer Inland Revenue Unit -06, Zone-IV, RTO-III, Karachi u/s. 182(1) dated 06-05-2014, imposing penalty at Rs. 25,000/-. Vide another order dated 7.7.2014 , the CIR (A) deleted the penalty of Rs. 50,000/=. As per the orders passed u/s. 182(1) of the Income Tax Ordinance, 2001, by the Officer Inland Revenue, notice u/s. 177(1) dated 31-10-2013, 25-11-2013 and 09-01-2014 were issued but all remained un-complied for, as such the Officer Inland Revenue proceeded to impose penalty of Rs. 25,000/= and by another order imposed penalty of Rs.
50,000/= u/s. 182(1) of the Income Tax Ordinance, 2001, hence the instant appeals before this Tribunal.
3. The learned counsel for the Taxpayer vehemently contended that on the basis of which the penalty was imposed u/s. 182(1), the appellant being totally unaware regarding the said notices purportedly issued by the department, could not be treated as in-default for their non-compliance.
It is pertinent to bring on record that the appellant, after receiving the impugned penalty order, vide counsel's letter dated 30-05-2014, requested for the certified copies of the above discussed notices dated 31-10-2013, 25-11-2013 and 09-01-2014 but no certified copy is received, till to date of hearing this appeals. The fee for certified copy was also paid. He further submitted that strangely enough on the same cause of non-furnishing details two penalty orders were passed imposing penalties of Rs. 25,000/= and Rs. 50,000/=. However, one penalty of Rs. 50,000/= was deleted by the learned CIR (A) vide order No. 23 dated 7.7.2014 but penalty of Rs. 25,000/- vide order No. 22 dated 7.7.2014 was confirmed by the same CIR (A). He, therefore, contended once the learned CIR (A) has detected the penalty, he should not have confirmed the another penalty on same ground and basis. All the above discussed facts were brought on record before the learned Commissioner (Appeals-II), Karachi, however, the learned Commissioner without giving due consideration to the said facts confirmed the impugned order.
4. The learned D.R., on the other hand, supported the order of the learned CIR (A) levying penalty u/s. 182(1) of Rs. 25,000/=. However, he failed to as to how two orders were passed by the OIR on the same issue of non-filing of details.
5.Both the learned representatives have been heard and the case records have been perused. It would be advantageous to reproduce the relevant extract from both the orders of the learned CIR (A).
CIR Order No. 22 Dated 07-07-2014 Brief facts are the consequent upon selection of case for audit u/s. 214C by the Federal Board of Revenue, the ACIR issued notice u/s. 177(1) of the Income Tax Ordinance, 2001 dated 31-10-2013, 25-11-2013 and 09-01-2014 for compliance by 08-11-2013, 05-12-2013 and 15-01-2014 respectively requiring the appellant for furnishing the details/documents in support of the declared version.
Finding to compliance, this was followed by a show cause notice u/s. 182 for compliance by 18-04- 2014, confronting the appellant for levy of penalty u/s. 182(1)(8) of the Income Tax Ordinance, 2001, on account of noncompliance of notice u/s. 177. On the stipulated date, request for extension of time was placed, which was allowed till 05-05-2014. This notice remained un responded as well.
The Officer Inland Revenue passed the impugned order u/s. 182 of the Income Tax Ordinance, 2001, on 06-05-2014, thereby levying penalty at Rs. 25,000/- as confronted. Felt aggrieved, the appellant has preferred this appeal.
In this context, on going through the impugned order it is observed that the ACIR has mentioned that the notice u/s. 177 and 182 of the Income Tax Ordinance, 2001 remained un-compiled with.
Admittedly the appellant was required to furnish details/documents regarding its declared version. The learned AR has not been able to refute the findings of the AC1R. Therefore, the plea of the appellant's AR that the ACIR was not justified to impose penalty at Rs. 25,000/- u/s. 182(1)(8) is not well founded and is hereby rejected.
Therefore, in the circumstances mentioned supra, I hold that the Officer Inland Revenue acted strictly in accordance with law, to which no exception can be allowed. Hence no interference is warranted and the penalty levied at Rs. 25,000/- is found in order and is hereby confirmed.
CIR Order No. 23 Dated 07-07-2014 Brief facts are the consequent upon selection of case for audit u/s. 214C by the Federal Board of Revenue, the ACIR issued notice u/s. 177(1) of the Income Tax Ordinance, 2001 dated 31-10-2013, 25-11-2013 and 09-01-2014 for compliance by 08-11-2013, 05-12-2013 and 15-01-2014 respectively requiring the appellant for furnishing the details/documents in support of the declared version.
Finding to compliance, initial u/s. 182(1)(8) amounting to Rs.25,000 was levied on 06-05-2014. This was followed by another notice confronting the appellant for imposition of penalty u/s. 182 for 13- 05-2014 on account of second default for non-compliance of notice u/s. 177. On the stipulated date, request for extension of time was placed, which was allowed. However, no details were furnished on the due date. The Officer Inland Revenue passed the impugned order u/s. 182 of the Income Tax Ordinance, 2001, on 14-05-2014, thereby levying penalty at Rs. 50,000/- as confirmed.
Felt aggrieved, the appellant has preferred this appeal.
On going through the impugned order it is observed that the ACIR has mentioned that the notice u/s. 177 and 182 of the Income Tax Ordinance, 2001 remained un-complied with. Admittedly the appellant was required to furnish details/documents regarding its declared version. However, the ACIR held that compliance was not made in true letter and spirit. The impugned order is silent on the issue as to how compliance was not made in true letter and spirit. Hence in the absence of any cogent reasons, the contention of the appellant's AR that the ACIR was not justified to impose penalty at Rs. 50,000/- u/s. 182(1)(8) is well founded.
Therefore, in the circumstances mentioned supra, I hold that the penalty imposed amounting to Rs. 50.000/- is not found sustainable in the eves of law. It is hereby deleted.
6. From perusal of the above findings of the learned CIR(A), it can be seen that he on the same cause delivered contradictory findings vide orders Nos. 22 and 23 both passed on same dated i.e.: 07-07-2014. Even notices issued to the taxpayer are the same. The said notices as alleged by the taxpayer had not been issued to the taxpayer. The Taxpayer applied for the certified copies, but till- today no certified copy of notices issued were received by the taxpayer though paid the fee for certified copies. It seems that the authorities below had not applied their judicious mind rather they proceeded to pass the orders in arbitrary and whimsical manners which are not maintainable in the eyes of law. No order, particularly, a penal action can be taken in vacuum without any proof and order are nullity in the eyes of law. It may be observed approved. Hence, I vacate CIR(A)'s order No. 22 dated 7-7-2014 and uphold the order No. 23 dated 7-7-2014 passed by the learned CIR(A).
7. Before parting with this judgment, I may state that observance of rule law is of vital importance and is compulsory not only for those who are to obey the law but also for those who are to enforce, implement and administer the law.
8. Appeal disposed off accordingly.