114.
return of income tax
114-1) every (company, people, organization, filer past 2
years, claim loss, own property, land area 500 sq. yards, flat
2000sq feet, motor vehicle 1000cc above, obtain NTN,
electricity bill exceed 5 lacs, Pakistan council related
registered, resident who file for foreign income and assist
under 116A, notified by minister in charge) they should file
return under 114 subsections 1
114-A1) incomefrom business exceed 3 las but not exceed 4lac
annual also require to furnish return
documents: all relevant particular include (declaration,
114-2)
signed by person, evidence of payments, wealth statement
116, 116A foreign income & assist
114-2A) should be furnish on electronic media
commissioner may notice require person or his
114-3)
representative may furnish return under 12 months’ notice
period
Where (person: died, became bankrupt, leave Pakistan)
114-4)if someone fail to furnish return by any person, is required
to furnish return within 30 days or commissioner may allow up-
down time
under subsection 4, may issue one or max 5 years’
114-5)
complete tax years, or ten years until commissioner is satisfied
114-6) Subject
to 6A any person who, furnish return discover any
wrong statement may have revised under following conditions
Audited accounts, reason for revision, signed, convince
approval by commissioner in written to be revision, declaration
income not less than or more than income or losses if above
condition not fulfilled the return shall be treated as invalid.
If written by commissioner to be revised condition not applied,
the approval required by commissioner
114-6A) if
taxpayer revised voluntary along with deposit of amount
of tax paid wit surcharges, whenever it comes to notice under
177 section of 122, no penalty should be recovered by person,
In 122 subsections 9 the deposit amount of tax sough to be
evaded the default surcharge & 50% of livable penalties with
revised return and thereafter
any return purporting (intend false appearance) to be
114-7)
made or signed by, it treated as person’s authority until he
prove the contrary
114A. BUSINESS BANK ACCOUNT
Every taxpayer declares to commissioner bank account utilized
for business
Business bank account declared through original and modified
registration form prescribed under section 181
114B POWER TO ENFORCE FILING OF RETURN:
Block sims / mobile cnic passport
Disconnect electricity, gas connections etc.
115 PERSON NOT REQUIRE TO FILE RETURN
A widow
An orphan under 25 years of age
A disabled person
Ownership of property, non-resident
116) WEALTH STATEMENT
Person total assets and labilities include foreign
Total assets and labilities include foreign and spouse
housewife, minor children
Person total assets and labilities include foreign in specified
period
Person total assets and labilities include foreign spouse and
children with total expenditure details
Reconciliation of statement
Every taxpayer should be filing return with wealth statement
and reconcile
If a person discovers any omission and in correction or wrong
statement, it can’t be revised after expiry of 5 years
116-. A)
Foreign assets /income statement
Income 10 thousand
Assets 100 thousands
117) NOTICE OF BUSINESS DISCONTINUES
within 15 days he should give notice to commissioner
separate tax year for purpose
if no notice issued then he should self-specified period
notice
all purpose of ordinance include application of section 120
118. METHOD OF FURNISH RETURN AND OTHER DOCX
114, 116 and 116A shall be furnished in prescribed
118- 1)
manner
114 under _ company 1st Jan – 30th June or before 30th
118-2 )
Dec to next following end of year _ incase 30th September to
next year to which return relates
118-2A)where salary Is equal or above 500 thousand rupees, the
return of income accompanied by proof of deduction or
payment of tax and wealth statement as required under section
116, 116A
118-3) Schedule for furnishing return
Return should be filed through e portal under deadline 30th
Sep
Under clause a, on or before 30th sept to return relates
Wealth statement should be furnished by due date
118-4)
specified in notice where person require to furnish under
subsection 2 of 116
118-5) Wealth statement should be furnished under 117 by due
date
118-6) If person not ntn and fail an application in prescribe
manner, return not furnished under section
119) EXTENSION OF TIME FOR FURNISHING OF RETURN
return required to furnish under section 114 (furnish) 117
119-1)
(discontinues business) and 116 (wealth statement)
May apply in written to commissioner for extension
119-2) application must apply under due date
under subsection 1, commissioner is satisfied that
119-3)
applicant is unable to furnish, related to due date
a) absence from Pakistan
b) sickness or other
c) any other reasonable cause
that applicant can grant an extension of time to furnish
under sub section 3 should not exceed 15 days from due
119-4)
date to furnish, unless exceptional conditions satisfying the
extension through long period
an extension of time under subsection 3 shall not for
119-6)
purpose of charge of surcharge under subsection 1 of 205,
change due date of payment under section 137
PART II
ASSESSMENTS
120) SELF ASSESSMENTS
where taxpayer furnish return under subsection 6 of 114
120-1)
year ending on or after 1st of July
Under date and subsection 2A if notified, self-assessment
operates without 2A, once date is notified compliance with 2A
became necessary before clause an and b apply
120-2) Return should be meet requirements of subsection 2 of
114,
120-2A)Adjustments: arithmetical errors, incorrect claims,
disallowance of losses, deductible allowance or tax credits the
amount under subsection 2A considered tax payable,
additionally subsection 1A allow commissioner to conduct audit
of taxpayer IT affairs under section 177
120-2A) shows
if no adjustment is made under six months,
Taxpayer declared amount are automatically accepted as
adjusted amount,
Additional provisions subsection 3)
If return is incomplete, commissioner issue notice specifies
(exclude incorrect tax payable, short payments)
If the taxpayer fails to comply with the notice by the due
120-4)
date, the return is treated as invalid
If the taxpayer fully complies, the return is considered
120-5)
complete from the original filing date
120-6)No notice under sub-
section (3) can be issued after 180 days from the end of the fina
ncial year.
120-7) defines the terms: and specify minimum and final taxes
120 B)restriction of proceeding: this provision was designed
to encourage voluntary tax compliance by offer legal protection
to those who previously un declare income or assets
121) BEST JUDGMENT ASSESSMENT.
121-1) Where a person fails to…
Furnish (return 114,143, 144 when notified, in notice 117(3)
Submit wealth statement 116, provide records for audit and
assessment 177(11) before the commissioner, special audit
panel, firm of CA`s C&M accountants,
if taxpayer fails to provide records or comply with filing
121-1A)
requirements:
a) sectorial benchmark ratio = business sector ratio
b) financial ratio
c)production ratio
d)gross profit
e) net profit
f) recovery ratio
g) wastage ratio
h) either other specific ratios
121-2) Assessment order details
Commissioner msner issue an order stating, Taxable income,
tax due, appeal process details (time place, manner)
121-3).
Time limit for issuing assessment order (order must issue
within 6 years after end of year, if notice under subsection 4 of
114 issued for one or more of 10 tax years, assessment order
must issue within 2 years
122. AMENDMENT OF ASSESSMENTS
This allow the commissioner for modify previously issued
assessments order when necessary
122-1). authority to amend assessment
Commissioner may alter or add to assessment order issued
sec 120, 121 to correct omissions
122-2). time limit for amendment
No modification can be made after 5 years
122=3). impact of revised return, under 114-6 or 6a
Commissioner made a modification assessment based on
revised return
Revised return treated as amended assessment order effective
from date of submission
122-4). further modification: original assessment is modified
based on information from audit
5 years for original order
1 year for amend order
122-4A)assessment under cancelled follow time limit specified in
section 65, amend do not extend or shorten the original time
limits
122-5) amend or further has definite inform from
Audit or other resources, evidence that income chargeable to
tax escaped assessment
Cases where total income was under assessed or assessed at
too low rated, receive excessive relief or refund
Instances where amount was misclassified infer head of
income,
122-5A)in this section ordinance grant commissioner authority to
modified if it deemed an error ness and prejudicial to intrest of
revenue
1225AA)any dispute not in appeal the commissioner has always
power to amend or further amend under 5A where undisputed
errors should be corrected
time limit under subsection 2 (5yeas) & (1 years)
122-5B)
subsection 4 amend assessment
122- 6)
amend under subsection 1, 4 or 5A commissioner should
ament assessment order to taxpayer stating (amended income,
amount of tax due, tax paid and time place)
122-7) amended assessment shall be treated under subsection 1
122-8) the term definite information include various financial
activities may impact Taxpayer assessment. It covers (sales
purchase of goods, receipt from service rendered, other
chargeable receipts, acquisition possession or disposal of
assets, including money transaction or ownership or transfer of
valuable articles, investment made by taxpayer, any significant
expenditures incurred
So this show that tax authorities have clear basis for identifies
undisclosed or misreported financial activities when amend
assessment.
122-9) Taxpayer opportunity to be heard before amended or
further amended
No amend can be made unless taxpayer is notified and given
chance to present their case.
Order must be issued within 180 days of show cause notice,
commissioner may extend period for up to 90 days with
reasons, issued on after 1st July (show cause notice)
If provided further any period where proceeding is adjourned
on stay order proceeding or agreed assessment under
section 122D in time taken should not exceed 60 days
122A) REVISION BY
COMMISSIONER
122A-1) commissioner may call record of any preceding under
this ordinance, in which order has been passed
112A-2)subject to sub section 3 where, after making such inquiry
as nessesary, Commissioner consider that order require
revision which deemed to fit.
An order under sub section 2, shall not be prejudicial to
112A-3)
person to whom the order relates.
Commissioner shall not revise any order under sub
112A-4)
section 2
a) if appeal against the order lies to commissioner or to the
court of appeal, within such appeal may be made has not
expired
b) order is pending in appeal before the commissioner appeals
or has been made the subject of appeal to court of appeal
112A-5) If any order is remanded back to any lower athourity by
commissioner for modification or alteration or implementation of
directions or de novo proceedings (from the beginning), order
giving to direction of commissioner shall be issued within 120
days.
122B) Revision by the Chief Commissioner (CC).
122b-1)grants the Chief Commissioner the authority to review
and revise orders related to the issuance of exemption or lower
rate certificates for tax collection or deduction at source. The
Chief Commissioner can initiate this review either
independently or in response to an application submitted by the
taxpayer.
122b-2) where after making such inquiry as is necessary the
CC consider that the order require revision, the CC may after
provide reasonable opportunity of being heard to taxpayer,
make such order as he may deem fit in circumstances of case
122C) Provisional Assessment.
122C-1)where in response under (114-3&4) a person fails to
furnish return of income for any tax year, commissioner may
based on any available information or material and to best of
his judgment, make a provisional assessment of taxable
income or income of person and issue a 122C order specifying
the taxable income or assessed and tax due thereon.
122D) Agreed assessment in certain cases. (Settlement
offer)
122D-1) where a taxpayer in response to notice 122-9 intend to
settle his case he may file offer of settlement in prescribed form
before the assessment oversight committee, additionally the
taxpayer submit a formal reply to commissioner on settlement
offer
122D-2)the committee first review the taxpayer settlement offer ,
It may call for record of case to ensure a through evaluation,
the taxpayer given a reasonable opportunity to present their
case, the committee decide through agreement whether to
accept or modify the offer, the final decision conveyed to
taxpayer.
122D-3) FINALITY AND
EFFICIENCY IN TAX
DISPUTE RESOLUTION:
Where the taxpayer is satisfied with committee
a) The payment must deposit full amount of tax payable
including penality and default surcharge, as determind by
committee.
b) once tax is submitted the commissioner will amend the
assessment to reflect the committee decision
c) waiver of appeal against the amended assessment
d) no further proceeding will be initiated under the ordinance
regarding the issue decided by the committee unless taxpayer
fails to deposit the required tax
122D-4)
Committee fails to reach a agreement or when
taxpayer is not satisfied with its decision
122D-5) The inlsnd revenue officers meet to taxpayer for
settlement
a) chief commissioner
b) commissioner
c) additional commissioner
a person have 1 crore of tax want to settlement so he appeal
122D for settlement so he meet following officers and remove
all tax in settlement amount
122D – 6) This settlement did not apply on
if taxpayer found hidden income , they cant use settlement
process
if case involve question of law that could impact other cases, it
may he resolve through formal legal proceedings rather than
settlements
FBR make rules and regulation regarding the
122D-7)
proceedings.
