What is the penalty for concealment of income?


  1. Where, in the course of any proceedings under this Ordinance, the Commissioner, Commissioner (Appeals), or the Appellate Tribunal is satisfied that any person has either in the said proceedings or in any earlier proceedings relating to an assessment in respect of the same tax year concealed income or furnished inaccurate particulars of such income, the Commissioner, Commissioner (Appeals), or the Appellate Tribunal, as the case may be, may, by an order in writing, impose upon the person a penalty equal to the amount of tax which the person sought to evade by concealment of income or the furnishing of inaccurate particulars of such income.
  2. For the purposes of subsection (1), concealment of income or the furnishing of inaccurate particulars of income shall include –
    • the suppression of any income or amount chargeable to tax;
    • the claiming of any deduction for any expenditure not actually incurred; or
    • any act referred to in sub-section (1) of section 111.
  3. Where any income or amount declared by a taxpayer is claimed by the taxpayer to be exempt from tax or any expenditure declared by a taxpayer is claimed by the taxpayer to be deductible, the mere disallowance of such claim shall not constitute concealment of income or the furnishing of inaccurate particulars of income unless it is proved that the taxpayer made the claim knowing it to be wrong.
  4. Where a Commissioner (Appeals) or the Appellate Tribunal makes an order under sub-section (1), the Commissioner (Appeals) or the Appellate Tribunal, as the case may be, shall immediately serve a copy of the order on the Commissioner and thereupon all the provisions of this Ordinance relating to the recovery of penalty shall apply as if the order were made by the Commissioner.
  5. Where, in consequence of any order under this Ordinance, the amount of tax in respect of which any penalty imposed under subsection (1) is reduced, the amount of the penalty shall be reduced accordingly.

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