STATUS: RESIDENT SALARIED INDIVIDUAL
ADDRESS: HOUSE# 1577, SECTOR M3 EXTENSION, LAKE CITY, LAHORE
TAX YEAR: 2019
TAX DEMAND: 15,637,534
AMENDED UNDER SECTION: 122(1)
SUBJECT: WRRITEN ARGUMENTS ALONG WITH DOCUMENTARY
EVIDENCES IN SUPPORT OF INCOME TAX APPEAL FILED U/S
127 OF THE INCOME TAX ORDINANCE, 2001 FIXED FOR
HEARING ON 23.02.2022.
That the assumption of jurisdiction by learned officer u/s 122(1) of The Income
Tax Ordinance, 2001 without obtaining definite information within meaning of
122(5) read with section 122(8) of the Income Tax Ordinance, 2001 is illegal and
beyond jurisdiction.
In the instant case, the learned officer has made amendment the assessment in original u/s
122(1)/5 of the Income Tax Ordinance, 2001 for the tax year 2019 on assumption,
presumption and self-alleged definite information on account of sales of properties by the
appellant to Rs. 54,627,200/- and created the amended Income Tax demand of Rs.
15,637,534/- for the said tax year 2019.
At the outset, it is contested that the learned officer has not acquired any definite information
within in meaning of sub section 8 of section 122 of the Ordinance, 2001 for the purpose of
invoking the sub section 5 of section 122 of the Income Tax Ordinance, 2001 for the tax year
2019.
The whole proceedings were initiated by the learned officer vide showcause notice dated
11.01.2022 stated at Page 1 of the impugned assessment order wherein the learned officer
mentioned the source of alleged definite information as;
“Quoted”
Later on, a definite information u/s 122(8) of the Income Tax Ordinance,
2001 was received to the effect that the taxpayer has sold
plots/properties by making 25-transactions during the year valuing Rs.
55,830,050/- on which tax was paid at Rs. 558,301/- in terms of section
236C of the Income Tax Ordinance, 2001. However, neither any
adjustable tax in terms of section 236C of the Income Tax Ordinance,
2001 was claimed in the respective income tax return nor the value of
such property was declared in the previous wealth statements
Copy of Showcause notice dated 11.01.2022 -Annex-A
Page 1 of 4
“Unquoted”
In compliance of supra showcause, the AR of the taxpayer submitted the reply dated
24.02.2022, the relevant part of reply explaining the alleged non-declaration of the said
properties in the wealth statements of the taxpayer for the tax years 2018 and 2019 was duly
declared and were available on record which by means do not constitute “definite information”
as alleged by the learned officer in the showcause notice stated supra.
The relevant part of the reply submitted by the AR on behalf of taxpayer which is incorporated
at second last para of page no. 3/10 of the impugned order which is reproduced here asunder
for your kind attention and perusal ;
“Quoted”
For more make stronger our legal argument that it has also been
declared as Capital Gain in[code no. 4000] in the Income Tax return u/s
114 of the Income Tax Ordinance, 2001 for tax year 2019 which holds
that the legitimacy of transactions for the sale of above mentioned
property. Furthermore, the capital gain was not taxed because the said
property is inherited from the family.”
Underlined for emphasis
Copy of Reply dated 24.02.2022 –ANNEX-B
“Unquoted”
The appellant has properly and duly declared the alleged sold properties in the Income tax
return for the tax year 2019 and prior years and which itself evident that the learned officer had
no source of definite information and has not acquired definite information vide audit or
otherwise.
Copies of ITR and WS- 2018-2019 –ANNEX-C
The so-called definite information was the information which was already available and self-
declared by the taxpayer. Therefore, the whole proceedings initiated by the learned officer
were void-ab-initio and illegal and consequent super structure built thereupon is not
sustainable in the eyes of law.
The stance of the appellant is further fortified through the judgment titled as ‘Commissioner
Inland Revenue, RTO, Peshawar versus M/s
Sabrina Tent Services by the Apex court of Pakistan reported as 2019 PTD 2001,
relevant excerpts are reproduced here asunder for your kind attention and perusal;
“Quoted”
“By subsequently changing their opinion in relation to the information
provided or on the basis of further information collected in respect of the
said bank account, the requirements of the law under section 122(8) of
the Ordinance with respect to the essential ingredients of 'definite
Page 2 of 4
information' are not met in this case. `Definite information' does not
mean a reanalysis of existing information or an analysis of further
information that was previously accessible but had not been taken into
account. Reliance in this respect is placed Central Insurance Co. v.
Central Board of Revenue (1993SCMR 1232), Inspecting Assistant
Commissioner v. Pakistan Herald Ltd. (1997 SCMR1256) and Income-
tax Officer v. Chappal Builders (1993 PTD 1108). The learned High
Court in the impugned judgment dated 15.07.2014 has agreed with the
view taken by the learned Tribunal.
It was held by the Apex court of Pakistan;
“Quoted”
“What has been done by the appellant is to collect further information from
a source that was already available, which they never demanded from the
respondent at the relevant time and to use such information to come to a
different conclusion. To our minds such an exercise does not amount to
receipt of 'definite information' within the meaning of section 122(8) of the
Ordinance.”
“Unquoted”
IT is further contested that the term "Definite Information" has elaborately been discussed in
the judgment reported as 2013 PTD 884, "The Hon’ble Lahore High Court, Lahore in the
case law reported as CIR v. Messrs Khan CNG and Filling Station 2013 PTD 884 has
explained the scope of the term "definite information" with special reference to section 122(5)
in the following words:
“Quoted”
“Any information which is incomplete or requires further
processing falls outside the domain of definite information and
can best pass for a departmental opinion, judgment,
guesstimate, approximation or estimate.”
“Unquoted”
The principles settled by the higher courts of Pakistan regarding the term “Definite
Information” within the meaning of sub section 8 of section 122 of the Income Tax Ordinance,
2001 are squarely applicable in the instant case and the learned officer did not pass the test of
acquisition of definite information rather it was fishing and roving query conducted by the
learned officer vide showcause notices against the alleged properties.
It is worthwhile to brought on record that the learned officer changed its stance from definite
information vide addendum showcause dated 12.05.2022 issued u/s 122(9) of the Income Tax
Ordinance, 2001 and confronted with the new observation, the relevant part of the showcause
notice is reproduced here as under for your kind attention and perusal;
Page 3 of 4
Last Para of page no. 4/10 of the impugned order
“Quoted”
From the above facts it is evident that you have developed the land by
dividing it into plots for sale with the object of earning profit which was
resultantly declared it as exempt gains at Rs. 68,284,000/- from the sale of
plots. Your treatment of exempt gain derived from sale of plots as declared
in the income tax return is not only repugnant to the law but also constitutes
an adventure in the nature of trade. In such situation, the undersigned
intends to reject your claim of exempt gains from capital assets declared at
Rs. 68,284,000/- and deem it as taxable profits and gain of the business
which is assessable in terms of section 18(1)(a) of the Income Tax
Ordinance, 2001. Hence, the same is intended to be taxed accordingly This
notice may be treated as integral part of the earlier notice.
Copy of Addendum dated 12.05.2022 –ANNEX-D
“Unquoted”
The AR of the appellant submitted the reply dated 14.06.2022 along with documentary
evidences in compliance of addendum which included;
1-Copy of Income Tax Return for tax year 2019
2-Copy of Wealth statement for tax year 2018
3-Copy of Gift deeds from mother
4-Copies of Power of Attorneys in favor of taxpayer
5-Copies of complete set of sales deeds executed in favor of buyers
Copy of reply with agreements dated 14.06.2022 –ANNEX-E
The perusal of the showcause notices and the impugned assessment order based on facts and
circumstances of the case, it is evident that the whole impugned order including the showcause
notices were hopelessly based on self-conjecture basis and without any definite information
and once the it was established that the appellant has properly declared the properties in
question in his wealth statements for prior years and in the instant year, the proceedings which
were initiated on the basis of non-declaration of alleged properties should have been closed as
no definite information was available with the learned officer.
In the light of above factual and legal submission, it is contested that the learned had no
definite information u/s 122(8) of the Ordinance, 2001 to invoke section 122 of the Income
Tax Ordinance, 2001 for amendment in deemed assessment in original. Therefore, the
assumption of jurisdiction without obtaining definite information is unlawful and illegal.
Hence, impugned order is not sustainable in the eyes of law, liable to be cancelled.
PRAYER:
Page 4 of 4
In the light of above submission, it is humbly prayed that the impugned assessment passed
u/s 122(1)/5 of the Income Tax Ordinance, 2001 may kindly be annulled, declared illegal and
additions made u/s 18(1)(a) of the Ordinance, 2001 into taxable income of the appellant be
deleted or any other relief deemed fit by this Hon’ble forum graciously be granted.
Through Council
FARHAN AHMED JAN
Advocate High Court
0300-9430875
Dated: 23.02.2023
Page 5 of 4
