2010 P T D (Trib.) 1394(2)

 
[Income-tax Appellate Tribunal Pakistan]
 
Before Munsif Khan Minhas, Judicial Member and Istataat Ali, Accountant Member
 
I.T.A. No.327/IB of 2010, decided on 16th April, 2010.
 
Income Tax Ordinance (XLIX of 2001)---
 
----Ss. 182(1), 114, 115(4) & 153---Penalty for failure to furnish a return or statement---Late
filing of return---Penalty was imposed by working formula which lay down at one-tenth of one per
cent of the tax payable for the late payment of tax on the plea that return was filed late by 16 days---
Assessee contended that he had filed statement under S.115 (4) of the Income Tax Ordinance, 2001
and the tax payable had already been deducted/collected at source under S.153 of the
Income Tax Ordinance, 2001; and when no tax was due, there was no
question of imposition of penalty---Validity---Levy of penalty was contingent to tax payable---No
tax was payable with the return there was no question of levying penalty because it was not provided
in the law, which was a lacuna in law---Legislature was urged to examine the necessity of enacting
an express provisions for the purpose---No error or infirmity having been found in order passed by
the First Appellate Authority as no tax was payable, order passed by the First Appellate Authority
was upheld and maintained by the Appellate Tribunal and departmental appeal being devoid of any
merit was dismissed.  
 
1971 SCMR 128 rel.
 
Sardar Ali Khawaja, D.R. for Appellant.
 
Asad Azam, FCA for Respondent.
 
 
ORDER
 
The Department has filed this appeal against the order dated 15-1-2010 passed by CIR(A-I)
Islamabad for the tax year, 2008 on the following ground:
 
"That the Commissioner (Appeals) was not justified to delete penalty under section 182(2) on
the ground that no tax was payable by the taxpayer company, as being contractor the entire
responsibility was discharged notwithstanding the legal and factual position that the return
was filed late by 16 days."
 
2. Brief facts leading to this appeal are that the taxpayer a Private Limited Company, derives income
from running a business of road construction. That the appellant filed its return for the tax year,
2008 on which an amount of Rs.63,924,144 was withheld. The taxation officer by invoking
provisions of section 182(1) of the Income Tax Ordinance, 2001 charged penalty of Rs.1,022,786 by
working formula which lays down at one-tenth of one per cent of the tax payable for the late
payment of tax on the plea that return was filed late by 16 days.
 
3. Feeling dissatisfied Taxpayer filed first appeal before CIR(A), who deleted the penalty with the
following observation.
 
"I have perused the assessment orders and contention of the appellant and agree with the
appellant that when the appellant has already discharged the tax liability through tax suffered
at source and no tax was payable with the return and further it was not informed of the
refusal in extension until very late i.e. on January 27, 2009 when already 12 days were
elapsed, therefore, the taxation officer is directed to delete impugned penalty".
 
4. The learned DR supported the order passed by learned Taxation Officer under section 182(i).
 
5. The learned A.R. states that the taxation officer (Enforcement-III), Large Taxpayers Unit,
Islamabad has erred in invoking the provisions of section 182(1) of the Income Tax Ordinance, 2001
alleging late filling of return under section 114, although the appellant had filed statement under
section 115(4) of the Income Tax Ordinance, 2001 and the tax payable had already been
deducted/collected at source under section 153 of Income Tax Ordinance, 2001. When no tax was
due from the appellant, there is no question of imposition of penalty on the basis of the above
formula. Hence levy of penalty is not legally maintainable."
 
6. We have heard the arguments and perused the relevant record available on file. For ready
reference section 182(1) of Income Tax Ordinance 2001 is hereby reproduced as under:
 
"Any person who, without reasonable excuse, fails to furnish, within the time allowed under
this Ordinance, [return of income [or a statement as required under subsection (4) of section
115 or wealth statement] for any tax year] as required under this Ordinance shall be liable for
a penalty to one-tenth of one per cent of the tax payable for each day of default subject to a
minimum penalty of five hundred rupees and a maximum penalty of twenty-five per cent of
the tax payable in respect of that tax year".
 
Needles to mention here that levy of penalty is contingent to tax payable. In this case there is no tax
payable with the return. Definitely there is no question of levying penalty because it is not provided
in the relevant law. In this connection golden principle is:
 
Casus omissus not to be inferred.
 
"Casus omissus is application of a principle that where a matter which should have been
provided for in a statute but has not been provided. It is a corollary of the general rule of
literal construction that nothing is to be added to a statute unless there are adequate grounds
to justify the inference that the legislature intended something which it omitted to express. It
was held in Hansraj Gupta v. Dehra Dun Mussourie Electric Tramway Co. Ltd. AIR 1933 PC
63 that Casus omissus cannot be supplied by the Courts. It was again held in Hira Devi v.
District Board of Shahjahanpur that "no doubt it is the duty of the court to try and harmonize
the various provisions of the Act passed by the legislature ……..But it is certainly not the
duty of the court to stretch the word used by the legislature to fill in gaps and omissions in
the provisions of an Act".
 
I am also fortified by the judgment of honourable apex Court reported as 1971 SCMR 128 which
says that:--
 
"In interpreting a taxing statute Courts must look to the words used in the statute and
interpret it in the light of what is clearly expressed. It cannot imply any thing which is not
expressed and cannot import provisions in the statute so as to support the assumed
deficiency".
 
There is a lacuna in the law. Legislature may examine the necessity of enacting an express provision
for this purpose.
 
7. So nutshell of the above mentioned discussion is that there is no error or infirmity in order passed
by the learned first appellate authority because no tax is payable in this case. Therefore we uphold
and maintain the order passed by learned CIR(A). The departmental appeal being devoid of any
merit hereby stands dismissed.
 
C.M.A./74/Tax(Trib.)                                                               Appeal dismissed.