128. Penalty for concealment of income.

128.  Penalty  for  concealment  of  income.- 

(1)  Where,  in  the  course  of  any proceeding  under  this  Ordinance,  the  Deputy  Commissioner  of  Taxes,  the

Appellate  Joint  Commissioner, ¹[the  Commissioner  (Appeals)]  or  the Appellate  Tribunal  is  satisfied  that  any  person  has,  either  in  the  said proceeding or in any earlier proceeding relating to an assessment in respect of the same income year,-

(a)  concealed  particulars  of  his  income  or  furnished  inaccurate particulars of such income; or
(b)  understated  the  value  of  any  immovable  property  in  connection with  its  sale  or  transfer  with  a  view  to  evading  tax, ²[he  or  it  shall  impose  upon  such  person  a  penalty  of ³[fifteen  per cent]  of  tax  which  would  have  been  avoided  had  the  income  as returned  by  such  person  or  as  the  case  may  be,  the  value  of  the immovable property as stated by him been accepted as correct:

⁴[Provided that if concealment referred to in clause (a) and (b) of this sub-section or sub-section (2) is detected after a period of more than one year from the year in which the concealment was first assessable to tax, the amount of penalty shall increase by an additional ⁵[fifteen per cent] for each preceding assessment year.]

⁶[[Provided that where concealment referred to in  this sub-section or sub-section is in a case where the assessment of tax was made by the assessee himself in accordance with any rule made in this behalf and accepted by the Deputy commissioner of tax as correct, the words "two and a half times" occurring in this sub section shall be read as "five times.]
(2) For the purpose of sub-section (1), concealment of particulars of income or furnishing of inaccurate particulars of income shall include-

(a) the suppression of any item of receipt liable to tax in who le or in part, or
(b)  showing  any  expenditure  not  actually  incurred  or  claiming  any deduction therefor.

 

⁷[(2A) Notwithstanding anything contained in sub-sections (1) and (2), in a case where a certificate is issued by a chartered accountant as to the correctness of the total income of an assessee under the first proviso to section 82 it is subsequently discovered by the Deputy Commissioner of Taxes, the Appellate Joint Commissioner, the Appellate Additional Commissioner, the Commissioner (Appeal) or the Appellate Tribunal that the chartered accountant willfully or knowingly withheld any information relating to the particulars of such income,he or it may  impose upon such chartered accountant a penalty of a sum not exceeding two and a half times the amount of tax which would have been avoided had the total income as certified by such chartered accountant been accepted as correct.]

⁸[(2A)   Notwithstanding anything contained in sub-sections (I) and (2), in a case where a certificate is issued by a chartered accountant as to the correctness of the total Income of an assessee under the ⁹[first or the second proviso] to section 82 it is subsequently discovered by the Deputy Commissioner of Taxes, the Appellate Joint Commissioner, the Appellate Additional Commissioner, the Commissioner (Appeal) or the Appellate Tribunal that the chartered accountant willfully or knowingly withheld any information relating to the particulars of such income, he or it may impose upon such chartered accountant penalty of a sum not exceeding two and a half times the amount of tax which would been avoided had the total income as certified by such chartered accountant been accepted as correct.]

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¹Ins by F.A. 1991
²Subs. for "he or it may impose upon such person a penalty of a sum not exceeding two and a half
times the amount" by F.O. 2008
³Subs. for ten percent by F.A. 2014

⁴Ins by F.A. 1999 and subs. by F.O. 2008
⁵Subs. for " ten per cent" by F.A. 2014
⁶Proviso omitted by F.A 1995
⁷Ins by F.A. 1998, omitted by F.A. 1999
⁸Ins. by F.A. 1991, omitted by F.A. 1993

⁹ Subs. for "second proviso" by F. A. 1992

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