111. Penalty for concealment of income, etc.-

(1)   Where, in the course of any proceedings under this Ordinance, the Deputy Commissioner, the Appellate Additional Commissioner 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 income year, concealed his income or furnished inaccurate particulars of such income, he or it may impose upon such person a penalty equal to the the amount of tax which the said person sought to evade by concealment of his income or furnishing of inaccurate particulars of such income, as aforesaid.

(2)   For the purposes of sub-section (1) and section 119, concealment of income or the furnishing of inaccurate particulars of income shall include-

(a)    the suppression of any item of receipt liable to tax in whole or in part or failure to disclose income chargeable to tax,

(b)    claiming any deduction for, or showing, any expenditure not actually incurred; and

(c)    any act referred to in clauses (aa), (b), (e), (d) and (e) of subsection (1) of section 13.

(2A) Notwithstanding anything contained in sub-section (1) or subsection (2), where any item of receipt declared by the assessee is claimed by him as exempt from tax, or where any deduction in respect of any expenditure is claimed by him, 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 assessee deliberately claimed exemption from tax in respect of the aforesaid item of receipt or claimed deduction in respect of such expenditure not actually incurred by him.

(3)   An Appellate Additional Commissioner or the Appellate Tribunal, on making an order under sub-section (1), shall forthwith send a copy thereof to the Deputy Commissioner and thereupon all the provisions of this Ordinance relating to the recovery of penalty shall apply as if such order were made by the Deputy Commissioner.