(a) Income Tax Ordinance (XXXI of 1979)---

----S.91---Penalty for non-payment of tax---Reduction in---Assessing Officer imposed certain penalties on assessee for his default in payment of tax which on appeal were reduced to half by Appellate. Authority---Revenue objecting to such reduction---Held, action of A.A.C. in reducing the penalty was in accordance with merits and facts of the case calling for no interference.

(b) Income Tax Ordinance (XXXI of 1979)---

----S.32(3)---Estimate of income---No evidence was furnished by assessee in support of the declared income---Assessing Officer determining income at certain figure which was reduced by A.A.C. on appeal on the ground that it was bald estimate in support of which no evidence was brought on record---Tribunal while observing that order had no basis or material in support of estimate of income, confirmed the relief allowed by A.A.C. in appeal.

Mrs. Fiza Muzaffar, D.R. for Appellant.

Nemo for Respondent.

Date of hearing: 19th December, 1996.

ORDER

In the year under consideration, the Revenue is in appeal against the consolidated decision of the first appellate authority, A.A.C. Range-IV, Faisalabad, passed on 22-11-1991 wherein the penalty imposed under section 91 (1) of the Income Tax Ordinance, 1979 by the assessing officer has been reduced from 10% to 5% (Rs.1,460 to Rs.730) and 5% to 2.5% (Rs.730 to Rs.365) respectively.

2. The learned DR was present. Neither the assessee nor its Authorised Representative was present at the time of hearing in spite of service. The case is being disposed of by resorting to provisions of Rule 20(2) of the ITAT Rules, 1981.

3. The DR arguing on behalf of the Revenue pleaded that the first appellate authority was not justified in reducing the penalties imposed by the assessing officer. It was pleaded that the assessee was in default and the penalties imposed were reasonable as such the order of the ITO should be restored. The action of the learned AAC, I find, is according to the facts of the case and warranted on merit. The Revenue has not been able to make out a case. The two appeals are dismissed.

1989-90:

4. In the assessment year under consideration, income was declared as under:- ---

5. The declared income was accepted in case of interest and salaries. Share income from the Firm was adopted as determined in case of the Registered Firm. In case of the "Aziz Atta Chakki", it was determined at Rs.40,000, after it was observed that no evidence was furnished in support of the declared version.

6. The AAC reduced the same to Rs.18000 observing that the same was a bald estimate and no evidence has been brought on record in support of the estimate. Similarly, no enquiries had been conducted to ascertain the extent of business. It was accordingly reduced to Rs.18000.

7. The DR maintains that this relief is without any justification. III support of the plea of the Revenue it was pleaded that the declared version could not be substantiated by the assessee. It stood rejected and therefore, the relief allowed by the first appellate authority was not called for.

8. I have considered and also examined the record before me. The assessment order has no basis or material in support of the estimate of income. These deficiencies have also been observed by the AAC and he has reduced the amount keeping in view the facts of the case. The Revenue has E not been able to substantiate its point of view. No convincing or cogent reason has been brought on record. The relief allowed by the AAC is confirmed. The Revenue fails.

9. The three appeals preferred by the department being devoid of any merit or fact are accordingly dismissed.

C.M.S./371/Trib. Appeal dismissed.