Tax Explanation Reply
Tax Explanation Reply
SUBJECT: NOTICE UNDER SECTION 182(2) FOR DEFAULT OF SECTION 114 OF THE
INCOME TAX ORDINANCE, 2001
Dear Sir,
(1.) This refers to your notice bearing bar code number 100000087058768 dated as December 13, 2020
whereby I have been asked to justify as to why penal provisions may not be invoked for late filing of the
Income Tax return for the Tax Year 2020.
(2.) In this connection, I would like to inform you that the delay in filing of the Income Tax return for the
Tax Year 2020 was neither willful nor intentional. I had to go urgent domestic business because one of
my family members felt severely ill and I had to give proper time to this issue mentioned above.
Moreover, due to excessive load on the e-FBR portal, IRIS remained inaccessible during working hours
from December 3 till the last date of filing i.e. December 8, 2020.
(3.) In view of the above issues as well as compressed working hours owing to Covid-19 outbreak, it was
not practically possible for the undersigned to file income tax return within the due date of December, 8,
2020. Late filing of the income tax return is merely a procedural lapse, which, as per plethora of
judgements cited below, is condonable: a) 2010 PTD 1515 (ATIR) - Procedural lapse was not culpable
b) 2017 PTD 846 (ATIR) - Procedural lapse and no loss of revenue
c) 2007 PTD (Trib.) 728
d) 2010 PTD (Trib.) 975 e) 2007 PTD 2286 (ATIR) - Procedural lapse and no loss of revenue
(4.) I want to state further that there is a well-known legal maxim "Lex non cogit ad impossibilia", which
means that the law cannot compel a man to do what he cannot possibly do. If there is an impossibility on
the part of a person to perform an obligation, law would not expect the person to do that impossible thing.
It is a settled legal position that a person cannot be constrained to do something which is impossible. This
maxim specifies the general rule that where the law creates a duty or charge, and that party is disabled to
perform it without any default in him and has no remedy over them, the law in general excuses him.
(5.) Without prejudice to the above, I would like to further submit that an essential element to be
considered in penal proceedings is “mens rea” which is essential for invoking penal proceedings. There
are various ingredients to invoke penal provisions, which are:
(a) penalty proceedings being criminal or quasi-criminal, establishment of mens rea is an essential
ingredient and as such the statutory obligation is on the revenue to prove that the assessee has acted
deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious
disregard of his obligation.
(b) mens rea is an essential ingredient of penalty proceedings; the revenue should establish mens
rea or the guilty mind of the assessee.
(5.1) In support of my contention, I would like to draw your attention to the following decisions:
(i) in the Supreme Court of Pakistan case reported as P.L.D 1967 (S.C.) (1) the late Hamood-ur-
Rahman, J., observed that “even in the case of statutory offence the presumption is that mens rea is an
essential ingredient”.
(ii) In the case of Mohammad Muslim V. CIT Karachi (1980) 42 Tax 129, the Sind High Court,
Karachi held that penalty could be imposed only when the revenue establishes a case indicating dishonest
motive of an assessee.
(iii) in the case of Kamran Steel Rolling Mills Vs. Commissioner of Income Tax, Lahore Zone,
Lahore reported as 60 Tax 13, the Lahore High Court held that penal proceedings are criminal in nature
and, therefore, have to be established independently on the basis of cogent evidence, as is required in
criminal proceedings. For imposition of penalty, it is not sufficient that the assessee’s explanation was not
satisfactory or even false and that evidence independent of the assessee’s explanation should be recorded
before penalty could be imposed.
(5.2) Further, I consider it pertinent to draw your attention to a decision of the Customs, Excise and Sales
Tax Appellate Tribunal. The Karachi Bench of the Tribunal in the case of Appeal no. 1650/99 dated
October 27, 2000 has held that penalty is to be levied in cases where the element of mens rea is
established. The relevant extract is reproduced below:
“However, in the matter of additional tax and penalty, we find that there is no mens rea
is this case, and the appellant has not willfully tried to evade the tax liability, and therefore,
remit the additional tax and penalty imposed on the appellant. Reliance is placed in
PLD 1967 SC 1, PLD 1991 SC 963, (1980) 42 tax 129 Karachi and 60 Tax 13 Lahore”.
(6) Last of all, I would like to state that under-mentioned is a noble Pakistani citizen. He is genuine tax
payer and has never defaulted his payment of tax nor he ever performed such a misconduct to file the tax
return. I hope that not only you will give me favour and will consider my case appropriately.
Yours Truly
TANVEER AHMED
(37101-2853963-7)
House No. BXII 114, Mohallah
Karbalah, Attock
CC:
1. Personal File