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10 Apr 26 161(1A), 165, 174(3), 214A SC Panther Sports section 161 limitation compare with maintenance of record provision scan
A taxpayer cannot be compelled to produce records beyond six years as prescribed under Section 174(3), and any notice under Sections 161, 165 or Rule 44(4) requiring such record becomes ineffective, unenforceable, and without legal consequence.
09 Apr 26 161, 174 FTO limitation for order under section 161 in the light of Supreme Court Judgment
Proceedings under Section 161 cannot be initiated or continued beyond the statutory limitation period of six years, and any notice issued thereafter is illegal, void, and constitutes maladministration.
09 Apr 26 18, 37(1A), 37(5), 35(7), 111, 122(5A) IHC Gain on disposal of immovable property is taxable us 37 not business income us 18
Gain on disposal of immovable property is specifically taxable under Section 37(1A) as capital gains, and cannot be treated as business income under Section 18, even if the taxpayer is engaged in real estate activities.
09 Apr 26 121(1)(d), 111(1)(c) LHC ITR 04 2021 Khalil Ahmad 121 111 1 without identified expenditures
Addition under Section 111(1)(c) cannot be made on account of unexplained household expenses without identifying specific expenditure or material, and proceedings under Section 121 cannot be invoked where the taxpayer has furnished the required record.
08 Apr 26 122(1), 122(5), 122(5A), 111(1), 177 2026 LHC 916 scope of 122 5A prejudicial and erroneous assessment
Jurisdiction under Section 122(5A) can only be exercised where the assessment order is both erroneous and prejudicial to the interest of revenue, and it cannot be invoked on mere discrepancies or matters requiring inquiry, which fall within the scope of Section 122(5).
07 Apr 26 111, 122 SC Khudadad Heights Credit entries cannot be termed as definite information
Bank statements and credit entries alone do not constitute ‘definite information’, as such entries do not necessarily represent taxable income unless independently verified and established.
07 Apr 26 122(1), 122(5) TRIB No order can be passed alone under 122 1 without invoking sub section 4 5 and 5A
No order under Section 122(1) can be passed independently without invoking and fulfilling the mandatory requirements of subsections (4), (5) or (5A), as these provisions are jurisdictional conditions precedent.
07 Apr 26 120, 122 TRIB Suncrop parallel two orders 122 and WWF
Once a deemed assessment is amended under Section 122, it merges into the amended order and ceases to exist; therefore, issuance of a second parallel order under Section 122(1) is illegal and void ab initio.
06 Apr 26 111, 120, 122 SC declaration in return is not definite information
Information already available in the return and record does not constitute ‘definite information’; reanalysis of the same material or mere change of opinion cannot confer jurisdiction under Section 122.
06 Apr 26 111, 122 SC 2024 SCMR 700 Millat Tractor Separate Order section 111
Information under Section 111 is merely preliminary information and only becomes ‘definite information’ after separate proceedings are initiated, explanation is sought, and an opinion is formed; without completing this process, action under Section 122 is without jurisdiction.
05 Apr 26 111, 122(5), 122(8) LHC Zubair Khan amendment of assessment on definite information
Proceedings under Section 122 based on additions under Section 111 are invalid unless separate proceedings under Section 111 are first initiated, completed, and transformed into ‘definite information’, as mere information does not suffice.
05 Apr 26 65, 14, 17, 26 of ITO, 1979 SC 1993 SCMR 1232 Central Insurance case on definite information
Reopening or amendment cannot be based on a second thought—it must be based on definite, fresh, and concrete information.
04 Apr 26 111, 122(3) LHC Suncrop Pesticide ITR 83 of 2023 bank credit entries
Bank credit entries cannot be treated as undisclosed income without examining their nature and source individually, and once a deemed assessment stands merged into an amended order under Section 122, any subsequent or multiple amendments under the same provision are illegal and without jurisdiction.
03 Apr 26 111(1)(d), 122(5), 122(8) IHC Bank credit entries do not constitute definite information
Mere unexplained bank credit entries do not constitute ‘definite information’, and proceedings under Section 122(5) cannot be initiated without first concluding proceedings under Section 111.
03 Apr 26 120, 122, 221 LHC ITR 05 of 2018 section 221 scope and deemed assessment
Power of rectification under Section 221 is limited to correcting mistakes apparent on record and cannot be used for review, reappraisal of evidence or re-adjudication of the case.
02 Apr 26 139, 140, 170 LHC Hamid Nishat Manual Refund Order against illegal recovery
Recovery proceedings without lawful assessment basis are illegal, and any amount recovered through such coercive measures must be refunded. Taxpayer based on another RTO whose recovery was made, so manual refund order is issued.
02 Apr 26 120, 122(3), 122(5A) LHC PTR No 281 of 2010 Revised return cannot be declared invalid and understanding of multiple assessment orders
A validly filed revised return cannot be declared invalid by the department, and it must be treated as an amended assessment superseding the original return.
02 Apr 26 122, 24A General Clauses Act, 1897 SHC Observation on New Appeal System and non speaking order consider unsatisfactory reply
Assessment and appellate orders passed without proper reasoning (non-speaking orders) are unsustainable in law and liable to be set aside and remanded.
01 Apr 26 129 LHC 2022 PTD 1627 Manual filing of appeal where assessment order manually issued
Where assessment order is issued manually without enabling IRIS mechanism, taxpayer cannot be deprived of right of appeal and must be allowed to file appeal manually.
30 Mar 26 120, 121, 122 and 221 Section 221 Ibrahim Fibres v. FOP LHC scope of rectification on deemed order
Rectification under Section 221 cannot be invoked in respect of a deemed assessment order under Section 120, as such order is not ‘passed by the Commissioner’, and any alteration must be made only through Section 122.
30 Mar 26 120, 221 Section 221 SC scope of rectification on deemed order
Rectification under Section 221 is maintainable even against a deemed assessment under Section 120, as the law deems not only issuance of assessment but also application of mind by the Commissioner.
30 Mar 26 221, 156 ITO 1979 Section 221 Supreme Court Scope of rectification
A mistake is ‘apparent on the face of record’ if it is obvious, self-evident, and does not require detailed investigation, and such mistake can be rectified whether it results in short levy or excess payment, to ensure equality before law.
29 Mar 26 122(5A), 177 TRIB 113 TAX 53 Scope of section 122 5A full bench
Jurisdiction under Section 122(5A) can only be exercised where two mandatory conditions—existence of an error in the assessment and consequent prejudice to revenue—are clearly established, and the provision cannot be used to conduct fishing and roving inquiries akin to audit under Section 177.
28 Mar 26 121(1)(d), 121(3), 122(1), 177(6) TRIB APBUMA Audit Report and Section 121 limitation with compare to section 122
Failure to confront the taxpayer with audit report under Section 177(6) vitiates subsequent proceedings under Section 122, and where audit proceedings are improperly conducted, recourse to Section 121 is also barred, especially if hit by limitation.
27 Mar 26 121(1)(d), 121(3), 177(10) TRIB Bhatti Paint Section 121 Prior to TY 2010
Prior to the amendment through Finance Act, 2010, Section 121 could not be invoked where a return had already been filed and attained the status of deemed assessment under Section 120; hence, no second assessment could be framed under Section 121 in such cases.
27 Mar 26 121(1), 121(3), 177(1), 214C TRIB ITA No 1272 IB 2024 Section 121 time limitation 6 years prospective
Extension of limitation under Section 121(3) from five to six years (Finance Act, 2022) is prospective in nature and cannot be applied to earlier tax years, as it affects vested rights; hence, any assessment beyond five years for prior years is void ab initio.
27 Mar 26 121(1)(d), 111(1)(c), 177(10) TRIB Khalil Ahmad Section 121 scope available information
Best judgment assessment under Section 121(1)(d) cannot be made in absence of any material or discrepancy in the record; mere non-production of books without adverse findings does not justify arbitrary estimation or invocation of Section 121.
26 Mar 26 161(1), 218 TRIB Reena Irfan Service must through all means of section 218 before passing expartee order
Before passing an ex-parte order, the department must ensure proper and effective service of notice through all prescribed modes under Section 218; failure to do so renders the proceedings void for violation of natural justice.
26 Mar 26 127, 128, 129, 218 TRIB Sajid Ali Section 218 CIR A requires to intimate notice through postal service
CIR(A) cannot dismiss an appeal for non-prosecution and must decide it on merits after ensuring proper and effective service of notice through all modes under Section 218; mere IRIS notice is not sufficient.
24 Mar 26 121, 122(1), 111, 177 TRIB Usman Khan Section 177 read with 121 and 122
Where taxpayer fails to provide record in audit u/s 177, the department must proceed under Section 121 (best judgment) and cannot invoke Section 122 without conducting audit and issuing audit report.
24 Feb 26 113, Clause 24D Part II of Second Schedule TRIB M Asif Clause 24D is not relevant to Distributor of FMCG Explained
In ITA No. 999/MB/2023 (Muhammad Asif v. CIR, RTO Bahawalpur, Tax Year 2021) decided on 27.01.2026 by ATIR Multan, the Tribunal held that Division-IX of Part-I of the First Schedule is the specific charging provision for minimum tax u/s 113, and in the case of distributors of fast-moving consumer goods (FMCG) the minimum tax rate is 0.25% of turnover without any condition of active status under the Sales Tax Act. The Department wrongly invoked Clause (24D) of Part-II of the Second Schedule, which applies only to dealers/sub-dealers of sugar, cement and edible oil and is subject to the condition of appearing on the Active Taxpayers List; such condition cannot be imported into Division-IX where the legislature has consciously not imposed it (except for petroleum agents). The Tribunal further applied the settled principle of interpretation that where two provisions overlap, the one more beneficial to the taxpayer must prevail.
23 Feb 26 122, 124, 129 TRIB M Sajjad Reassessment Proceedings after annullment on merit by CIR A Explained
The Hon’ble Appellate Tribunal Inland Revenue, Multan in ITA No. 761/MB/2024 (Tax Year 2021) has categorically held that once the learned CIR(A) annuls an assessment on merits—particularly after recording a clear finding that the Assessing Officer lacked “definite information” and, hence, jurisdiction under section 122(5) — such annulment wipes out the assessment as if it never existed, and in the absence of any specific direction for re-adjudication, the Assessing Officer cannot revive or reopen the matter under sections 124 or 122 on the same grounds. The Tribunal elaborated that “annulment” is distinct from “remand” or “set aside”; it renders the order void ab initio and closes the chapter finally, attracting the principles of finality of litigation and res judicata. Reliance was placed on Indus Juristiction – ITO v. Kalyan Kumar Roy Trust (75 ITD 36 Cal.), Messrs Bisma Textile Mills Ltd. v. Secretary Revenue (2016 PTD 1790 Lah.), and the interpretation of “annul” in authoritative dictionaries, while distinguishing Malik Faisal Imran v. Federation of Pakistan (2017 PTD 2480) on the ground that it pertained to annulment on technical grounds, not on merits. Consequently, any fresh proceedings initiated after a categorical annulment on merits, without express appellate directions, were declared without lawful authority and beyond jurisdiction.
21 Feb 26 153, 236H, 161 TRIB M Shahid Section 153 and 236H RB explained
The Assessing Officer created demand under section 161 along with default surcharge under section 205 for Tax Year 2022 on alleged failure to deduct withholding tax under sections 153(1)(a) and 236H, which was confirmed by the learned CIR(A).
The Tribunal found that the withholding liability was assumed without proper determination of facts and legal status, therefore the orders were set aside and the matter was remanded for fresh adjudication in accordance with law in following manners:
1) Determine and record clear findings regarding the nature of supplies and whether the recipients were retailers to lawfully invoke section 236H.
2) Establish actual payments and dates of payments, and examine withholding liability strictly with reference to the timing of payment under section 153(1).
3) Ascertain the actual quantum of sales made to retailers instead of inferring sales figures from purchase data.
4) Examine applicability of sections 153(7), 236G, and 236H independently after determining the legal status of the taxpayer as a withholding agent under each provision.
5) Record explicit findings regarding filing or non-filing of withholding statements before sustaining proceedings under section 161.
6) Recompute tax liability strictly in accordance with law and levy default surcharge under section 205 only if principal liability is lawfully established.
7) If it is established that the recipients have already discharged their tax liability for the relevant tax year, refrain from recovery of principal tax from the withholding agent in the light of section 161(1b), while dealing with surcharge as per law.
8) Pass a speaking and reasoned order after providing due opportunity of being heard, demonstrating clear application of mind to each disputed issue.
10 Jan 26 113, 236G LHC Allied Marketing Distributor Tax on Margin
The Court upheld the findings of the Appellate Tribunal that the respondent was a distributor earning only a predetermined margin and that there was no bar in section 113 to treat such margin as its gross receipts. Consequently, the Court held that minimum tax under section 113 was chargeable only on the margin of profit and not on the gross sales value, and dismissed the tax reference filed by the department.
10 Jan 26 113, 236G LHC Mohsin Brother Distributor income is fixed margin therefore section 113 shall apply on margin instead of gross sales
The Lahore High Court held that where a taxpayer operates as a distributor under a distribution agreement and earns only a fixed gross profit margin, such margin constitutes its real turnover for the purposes of minimum tax under section 113 of the Income Tax Ordinance, 2001, and not the gross sales value. The Court found that treating the respondent as a buyer-seller merely on the nomenclature of the agreement was misconceived, as the agreement restricted the distributor to earning a defined margin. Consequently, the findings of the CIR(A) and ATIR that minimum tax could not be charged on gross sales were upheld and the department’s reference was dismissed.
10 Nov 24 122(5A), 122(1), 122(9), 177 TRIB DS PHARMA Scope section 122 5A
The decision addressing several critical points under Section 122(5A) of the Income Tax Ordinance2. The Tribunal clarified that Section 122(5A) does not empower the Additional Commissioner to demand records, and any legal questions must be decided before addressing the merits of the case. The notice must satisfy both conditions: "Erroneous insofar" and "prejudicial to the interest of revenue," which must be substantiated with solid evidence in the show-cause notice. Section 122(5A) cannot be used to correct mistakes unless there is a proven loss of revenue or not it is used as a substitute of audit provisions. Accepting the demand for records under Section 122(5A) would render Sections 122(1) and 177 redundant, which is not permissible. The Tribunal emphasized that fishing and roving inquiries are not permissible under Section 122(5A). If records are essential, the case should be opened under audit u/s 177 or with definite information u/s 122(1).
03 Jun 24 140 LHC 2024 LHC 2795 10 percent recovery us 140 appeal pending at CIRA
The case involves M/s Radiant Medical (Private) Limited filing a writ petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, challenging the recovery action taken by the Inland Revenue Officer from its bank accounts. The petitioner argues that the recovery under Section 140 of the Income Tax Ordinance, 2001, is unlawful as it violates the proviso to sub-section (1) of Section 140, particularly since an appeal under Section 127 of the Ordinance is still pending. The petitioner's counsel cites a judgment to support the claim that the tax recovery should not proceed until the liability is adjudicated by an external forum like the Appellate Tribunal Inland Revenue.
The respondent, represented by the Assistant Attorney General and the legal advisor for the Federal Board of Revenue (FBR), opposes the petition, arguing that the stay order had lapsed and the petitioner had not deposited the required 10% of the tax for an extension of the stay order. They assert that without a stay order, the department had the right to recover the tax as per the amended assessment order and Section 140 of the Ordinance. The respondent further claims that the recovered amount has already been deposited into the treasury account.
The court notes that tax recovery from a taxpayer should be halted until at least one external forum, such as the Appellate Tribunal Inland Revenue, has adjudicated the liability. The court finds that the petitioner was never asked to pay the 10% of the tax liability, which is a prerequisite for halting recovery under Section 140(1) of the Ordinance. Consequently, the court partially allows the writ petition, ordering that the amounts recovered from the petitioner’s bank accounts be reimbursed or credited back, after deducting 10% of the tax liability, within 20 days.
06 Oct 23 111, 122 SC CP 2732 Definite Information Bank Credit Entries Revert
During conduct of audit of Shujabad Oil Mills Pvt Limited, department found information containing huge banking transactions with taxpayer. Based on such definite information, proceedings also initiated u/s 111, 122 against taxpayer. Tribunal decided the case in favour of taxpayer. High Court dismissed the tax reference on matter of fact. Two judges bench of Supreme Court endorsed the department view and this judgment reported (2021) 123 TAX ! SC = 2021 SCMR 437 = 2021 PTD 639. Department took heavily rely on this judgment as a precedent. However, taxpayer filed revisional application which was accepted and finally former judgment revered with the finding that department merely relied on a ledger and failed to produced the evidence of banking transactions demanded by the taxpayer and as well as during the proceedings before larger bench of Supreme Court.
24 Jun 23 111, 122 TRIB Mehboob Hussain concealment of sales
Taxpayer supply sugarcane to sugar mill and received sugar in consideration instead of cash, which was not declared in return of income. The tax department treated the sale of sugar as concealment and added to the income of taxpayer without allowing cost of sales. Hon'ble Court held that Section 111 is not punitive in nature and hence no verifiable credit given to the appellant is highly misconceived and misdirected. AO wrongly added the total amount of sale of sugar to income of taxpayer without considering the purchase price which should have been subtracted from sales price for making addition u/s 111 of the Ordinance 2001. case is remanded back to the AO for fresh decision strictly in accordance with the law laid down by the Hon'ble Supreme Court in case 2023 SCMR 534.
22 Jun 23 161 TRIB WHT order RB for denovo consideration in the light of MCB Judgment
On 27.04.2022, the Hon'ble Appellate Tribunal directed the parties for reconciliation of the record. Case fixed many times and department got adjournments. Finally, on 22.06.2023, the department objected that complete record was not provided by the taxpayer. Hon'ble Court directed the department to produce record which the taxpayer provided but they were not bring with them. On other side, AR provided the acknowledgment of service about submission of complete record.
Hon'ble Court have the view that tax department did not pay heed to the order of the tribunal which resulted in a wastage of time. In order to save government revenue, case is remand back with the direction to examine the record lying with the tax department and if some record is short, AO will summon the record in writing from the taxpayer by mentioning the complete detail of short record. The AO also take into consideration the law laid down by the Hon'ble Supreme Court in case reported CIR vs. MCB Bank Ltd 2021 SCMR 1325.
31 May 23 7E, 120 LHC Section 7E read with notice section 120
Notice issued u/s 120(3) calling short document u/s 7E of the Ordinance, 2001. Said notice is entirely unjustified in the wake of authoritative judicial pronouncements of the superior courts qua the said provision including order dated 06.04.2023 in W.P. No.52559 of 2022 titled Muhammad Osman Gull v. FOP etc. Petitioner is directed to appear before Respondent and till Respondent's decision within stipulated time, no adverse step/measure shall be taken.
07 Apr 23 7E, SRO 1891(I)/2022 LHC Section 7E Lahore High Court 2023 LHC 1498
Hon'ble Lahore High Court vide W.P. No.52559 of 2022 title Muhammad Osman Gull vs. FoP etc dated 06.04.2023 declared the charging section 7E treating the market value of immovable property as income under Entry 47 beyond the competence of Federal Legislator and declared ultra vires. However, provisions of Section 7E are read down to save the taxation on Capital Value of Assets, which is within the competence of Federal Legislature under Entry 50. Against judgment of single bench of Lahore High Court, the FBR preferred to file Intra Court Appeal (ICA).
31 Mar 23 218 LHC M Riaz service of notice and factual contraversy A3
ITR No.01 of 2020 (Lahore High Court Multan Bench)
Issuance of notice and its service on correct address is a condition precedent for assumption of jurisdiction, which means a valid and proper service as required by law and not otherwise. Department (FBR) failed to establish service of notice, which clearly shows that income was determined without associating the taxpayer. In absence thereof, ex parte assessment so framed is arbitrary and unjustified.
28 Mar 23 124, 129, 137, 138. 140 FTO Innovative Appeal Effect before Recovery
Fresh notice u/s 137 and subsequently u/s 138 is mandatory after given appeal effect as prescribed u/s 124/129. Hon'ble FTO directed the FBR to issue instructions to the filed formation to observe all the legal and procedural formalities while enforcing recovery directly from the taxpayer's bank account in terms of Section 140.
15 Mar 23 113, 148(8), 177 TRIB WWF cannot be chargable on notional income
WWF is leviable on the real or assessed and determined income and not leviable on the notional income such as that falling u/s 148(8), as it stood at the material time. The findings of CIR(Appeals) on the WWF for the year in the case is against the above settled principles, the impugned order is, therefore, vacated and the WWF charged is deleted.
30 Nov 22 218, Rule 10, 10A and 2020 of Order 5 CPC 1908 TRIB Manual Notice must be mandatory
Rule 10, 10A and 20 of Order 5 CPC 1908 guides of forms including income tax department to make service on the taxpayer through notice. There should be some evidence that taxpayer had received the notice. Admittedly the department did not adopt any mode of service except IRIS. Members of our society are not knowing use of internet and such methods. Question of limitation does not arise in absence of any confirmed service of the appellant. Case is remanded back for denovo consideration.
29 Oct 22 7E, SRO 1891(I)/2022 7E complete decision by Sindh High Court
Hon’ble Supreme Court in the case of Elahi Cotton (PLD 1997 SC 582), and in view of hereinabove facts and circumstances of these cases, after hearing all the learned Counsel as well as learned Assistant Attorney General, we had come to the conclusion that no exception can be drawn to the competence of the Federal Legislature while introducing Section 7E through Finance Act, 2022. Petitions dismissed.
26 Aug 22 121(1)(d), 122, 177(6) 177(10) TRIB Usman Khan Section 177 read with 121 and 122
Taxpayer admittedly didn't attend the proceedings u/s 177 and submitted record. AO amended the assessment u/s 122(1) read with section 177(6). Hon'ble Tribunal held that in this case, AO should conclude the proceedings in way of best judgment assessment u/s 121(1)(d) read with section 177(10). Both orders below annulled.
26 Aug 22 121(1)(d), 177(10), 214D, 214E TRIB Waqas Edible Section 214D and Board Circular
Case selected for audit u/s 214D and AO finalized assessment u/s 121(1)(d) read with 177(10) without following the Board Circular dated 24.04.2020 while enhancing the sales and disallowance of expenses in lump-sums manner. Hon'ble Tribunal held that:
1) It is mandatory requirement to initiate proceedings u/s 121(1)(d) that the Commissioner should have some material or information to proceed against the taxpayer.
2) Board's instructions for closure of audit u/s 214E dated 24.04.2020 was mandatorily required to follow as per the provisions of Section 214 of Ordinance, 2001. Case remand back.
23 Aug 22 153, 161, Rule 44 TRIB FEL Section 161 and Rule 44 on sales tax record
AO created demand of default of withholding taxes compare with sales tax declarations through order u/s 161. Hon'ble Tribunal held that:
1) Purchases mentioned in sales tax return does not mean that payment against such purchases is also made during same tax period. Therefore without referring payments, Section 153 read with section 161 cannot be invoked.
2) AO was under legal obligation to identify un-reconciled amount before issuing the show cause notice. 3) There is no scope and mandate u/s 161 to make the inquiries from the taxpayers.
23 Jul 22 113, Clause 58, 92 Part-1 of 2nd Schedule TRIB FFC ES turnover tax on donation
Taxpayer is Non-Profit Education Institution charged with turnover tax u/s 113 for Tax Year 2011 to 2015 on the ground of non-availability of exemption certificate. Hon'ble Tribunal held that for Tax Year 2011 to 2013, use of adjective "any" in clause (92) makes it evident that exemption there under applies to all incomes, whether these are real or deemed through a fiction of law created by legislature. For tax Year 2014 to 2015, condition of getting certificate u/s 2(36) inserted through Finance Act 2019 cannot be operate retrospectively.
Even otherwise operations of a welfare organization are based on "donations" which can't be termed as turnover as defined u/s 113(4) of the Ordinance, 2001. Hence, Section 113 cannot be applied on donation which cannot be termed as gross sales/receipts/contract etc. It is trite law that nobody could be made liable to pay tax on basis of presumptions or intendment, except on basis of explicitly provisions of law (2013 PTD 2268).
18 Feb 22 113 TRIB Super Asia Section 113 on distributor margin vs sales declared in sales tax returns
Taxpayer declared margin in income tax return. Additional CIR charged minimum tax u/s 113 on sales declared in sales tax returns. Hon'ble Tribunal held that Section 113 is chargeable on turnover and impugned action of charging minimum tax on sales instead of turnover declared by the appellant is thus found to be illegal and contrary to facts of the case.
07 Jan 22 170, 147, 148, 231A TRIB Refund Bank Withholding 231A
Refund u/s 231A was rejected by department on the ground of non providence of CPRs. Bank submitted amount of various taxpayers with single CPR. Hon'ble ATIR held that refund of 231A would be allowed to taxpayer after verification of certificate under Rule 42 issued by bank. Refund would have deemed to be allowed on the date of first negative order and issued after comprehensive verification along with compensation as per law.
05 Jan 22 111, 122(5A), Amnesty 2019 TRIB Amensty 2019 concealment on late payment
Amnesty 2019 payment due date was 30.06.2019 which was extended upto 03.07.2019. AO made concealment the declaration in Amnesty on believe that due date of tax payment was 30.06.2019. ATIR declared proceedings null and void.
21 Jun 21 122(4), 122(9), 2(68), 74 2021LHC1961 WP is not maintainable against notice
As no adverse order has been passed against the Petitioner and the impugned notice only requires certain information/document from him and alternate remedies are available to the Petitioner who can only approach this Court in a Tax Reference after exhausting all those remedies, the Petitioner is directed to provide the requisite documents/ record/information to the Respondents keeping in mind the method, application and time period as stipulated in Section 122(4) of the Ordinance.
07 Jun 21 114(6), 120, 122(3), 122(5A) 2021LHC1868 further amendment after revision of return
Respondent-taxpayer had a right to revise his return and no provision of law restricted his right to file the revised return. If revised return was filed in accordance with law fulfilling the requirements of the provisions of Section 114(6) of the Ordinance, Adjudicating Authority had no power to declare it to be invalid in such a manner.
01 Jun 21 113, 221, Constitutional Article 264, General Clause Act 6 2021LHC1721 Adjustment of 113 with normal income in TY 2009
Section 113 was omitted through Finance Act, 2008. Taxpayer adjusted access minimum tax paid in Tax Years 2004 to 2008 in tax Year 2009. Hon'ble Court held that "No doubt, the repealed law is considered a law that never existed, however, for the purpose of those actions which were commenced, prosecuted and concluded, it would be considered as an existing law."
31 May 21 Wealth Tax Act, 1963 -- Section 16(4) 2021LHC1732 directory vs mandatory provision of law
Either Notice u/s 16(4) is mandatory whereas issuance of said notice is discretionary for the DCWT? Hon'ble Court held that "when a Statute provides an act to be done in a particular manner or form, it must be performed in such manner alone as nobody should try to be wiser than law, otherwise the same would be termed as illegal and the proceedings unsustainable." Notice should be issued to legal heirs of assessee to file proper representation.
25 Feb 21 140 TRIB Penalty Bank Manager non compliance 140
Bank Manager failed to compliance with notice u/s 140. AO imposed penalty 182(10) (13) (14). Hon'ble Tribunal held that default is occurred by bank and not by the manager and secondly penalty imposed in above subsections of 182 are not applicable in instant case. Manager (Operations) should take notice of misuse of powers by the AO.
24 Feb 21 127 TRIB SRO 1315 Online Appeal
SRO 1315(I)/2020 dated 09.12.2020 regarding submission of income tax appeals online through IRIS software is contradictory with the provisions of Ordinance and resultantly infringing the substantive and fundamental rights of the appellant. Member Policy is directed to appear with complete record. Interim relief granted.
23 Feb 21 208, 209, 210, 211 Chenab Flour and General Mills VS FOP RTO to LTO
Chenab Flour & General Mills VS FOP RTO to LTO It is held that FBR is regulator the tax regime authorities and tax laws in Pakistan and jurisdiction of transfer exercised vide Notification No. F.No.1(48)Jurisdiction/2014-177049-R dated 12.10.2020 under section 209 is intra vires of powers of FBR.
Keywords: Regulator, Legal Anthropology, Preamble, Interpretation of Statute, Proviso, Commissioner
15 Dec 20 Income-tax Act, 1922 -- Sections 18A(9)(b), 22(1), 28(1)(a) TRIB 2 TAX 289 Penalty on voluntarily submission of return
Penalty can be imposed only when there are two types of failings on the part of the assessee, both committed simultaneiously. He should failed to file it return within the time allowed in the notice u/s 22(1) and he should have also failed to file it in the manner required by the notice u/s 22(1).
17 Nov 20 0 Foreign Remittance FTO Findings 2020
Direct Tax
16 Apr 20 205(1)(b), 147(7), 168 Additional Tax Under Section 205 where unadjusted refunds are available
Tribunal -- When determined refunds are available on record, the additional tax against late payment of government dues is not chargeable.
19 Mar 20 172 SHC suit is not maintainable on show cause notice
Sindh High Court Suit No 574 of 2012 - Suit is not maintainable being premature and without a proper and just cause of action having been instituted against merely a Show Cause Notice.
30 Jan 20 165, 182 LHC TR 12 of 2018 Penalty Withholding Statement A3
It is held that since no loss of revenue is involved therefore dismissal of departmental appeal by Appellate Tribunal regarding imposition of penalty u/s 182 on failure of filing of withholding statement within due date does not suffer from any factual or legal infirmity as the same has been passed after scrutinizing the relevant record as well as on the basis of sound reasoning.
High Court cannot change findings of facts arrived at by the Appellate Tribunal unless the same are shown to be perverse and contrary to record.
16 Dec 19 0 Foreign Remittance Presidential Order FTO Section 32
Direct Tax
14 Sep 18 129, 138, 140 HC WP 12690-18 Order Naveed Ahmad coercive measures
Appeal and stay application is pending with CIR(Appeals) whose post is vacant. High Court order that CIR(Appeals) decided the stay application with a period of 30 days and main appeal within a period of 60 days. Till the time of decide of stay application, no coercive measures shall be taken against petitioner.
14 Sep 18 111, 124, 129, 174(2), 214C Trib ITA 2815-14 Taj Flour Order
Taxation officer during audit found that column of capital in Income Tax Return Tax Year 2011 shown NIL and thus amount of huge closing stock added in other income u/s 111(1)(b). The CIR(Appeals) direct the office to examine the record having observation that appellant availed credit limit of Rs.31(M) and paid mark up at Rs.809,994. The assessing officer allowed these financial charges against credit limit and thus the addition is held unjustified.
The appellant challenged the direction of remand back before Appellate Tribunal. Tribunal held that once the CIR(A) came to the conclusion that impugned order is suffering from legal infirmities and he has annulled the same there remains no justification to issue further directions to the department to re-examine document and to pass fresh order.
06 Aug 18 129, 138, 140 HC WP 7338-18 Fatima Enterprises covercive measures
Taxpayer has availed 60 days stay by CIR(Appeals) however, main appeal is still pending. High Court under Article 199 held that until and unless tax dispute is finally determined at least by one independent forum outside the departmental hierarchy, coercive measures cannot be adopted during pendency of appeal.
30 Jul 18 177, 214C IHC W.P. No.139 of 2012 OMV Pakistan Selection 177 by CIR
2013 PTCL 298 = 2013 PTD 1620 = 2013 TAX 53;
Section 177 and Section 214(c) are two independent sections. Section 214(c) is not subservient to section 177. The Commissioner has the authority to verify the correctness of assessment filed by the taxpayer under self-assessment scheme.
Procedural provision in fiscal laws refers to machinery of assessment and collection. It is settled principle of law that procedural provision must be construed in a mannter that will effectuate the levy of tax and advance the object behind the provision.
The Commissioner was given the authority to call for any record or documents, however, before calling for record or documents, the Commissioner was to give reasons and communicate the same to the taxpayer.
23 Jul 18 Section 13(1)(aa), 13(1)(e), 63 of Income Tax Ordinance, 1979 97 TAX 313 Trib Condonation of delay and gift
It has been established that service upon assessee was not proper as service of demand notice must be on proper person. Prayer for condonation of delay by assessee should be considered sympathetically.
It was held by the Hon'ble ITAT in a case cited at (2004) 89 Tax 427 (Trib.)=2004 PTD (Trib.) 1523, Oral gift can be made. Genuineness of a document cannot be doubted on technicalities. Mian factor is that no notice u/s 148 was issued to the said donor nor any cogent reasons were brought on record which this factor can be doubted that at the time of making gift such amount was available with him or not.
Courtesy: Malik Mumtaz Hussain Khokhar AHC - Contact: 03006330192
20 Jul 18 165, 182 TRIB ITA 259-18 Order Penalty 165 deleted No loss of Revenue
Department filed second appeal before Tribunal against order of CIR(Appeals) for deletion of penalty u/s 182 for default of section 165. It is held that contention of taxpayer's representative that since no loss of revenue is involved in the case in hand, therefore, relief allowed by CIR(A) by deleting the penalty of Rs.10,000 by placing reliance on the judgment of this Tribunal seems to be justified. Departmental appeal dismissed.
11 Jul 18 177, Section 3 of Law Reforms Ordinance, 1972 LHC Departmental ICA dismissed on delay
ICA No.132/2013 decided on 24.04.2017 CIR Vs. M/s. Crescent Carriers
Department filed Intra Court Appeal (ICA) and application for condonation for delay through Civil Misc. with a specific delay of 37 days. Department failed to show any sufficient reasons for condonation of such delay.
It is held that for purpose of limitation Government cannot be treated differently. Appeals dismissed.
Malik Mumtaz Hussain Khokhar, AHC -- Contact: 03006330192
20 May 18 214C, Audit Policy 2015 SC Nestle Pakistan Audit Policy 2015
Time frame is necessary to be put in place in order to ensure that the tool of audit is not abused or misused to pester, torment or harass the Taxpayers. Time frame mentioned in the policy guidelines namely completion of the audit within the same financial year in which a Taxpayer is selected for audit is fair and reasonable. It must as far as possible be adhered to. However, if delays are inevitable, beyond the control of the Department and do not occur on account of any act or omission on the part of the Taxation Officers and happen on account of litigation and grant of stay orders, the Audit Officer may seek extension of time from the Federal Board of Revenue for completion of the audit after recording reasons in writing for seeking such extension explaining reasons for his inability to complete the audit within the stipulated time. it is however emphasized that extension if granted should be supported by due application of mind and appropriate reasoning on the part of the Board. if should not be granted casually, repeatedly and as a matter of routine. Adherence to guidelines and time frames would enhance confidence of the Taxpayers in the system and at the same time act as a check on lethargy and inefficiency on the part of the departmental functionaries.
20 Apr 18 214D(4), 214C, 177, Rule 4 of Sales Tax Rules, 2006 LHC Retailer cannot be selected for audit for 214C, 214D and 177
Taxpayers registered under Sales Tax Act, 1990 before the issuance of Rule 4 and 5 of Sales Tax Rules, 2006 inserted through SRO NO.608(I)/2014 dated 02.07.2017 will consider deem to be a retailer. The department, therefore, could not have selected the petitioner for audit in terms of section 214 read with sub-section 4 of section 214D.
10 Apr 18 122(2), 122(5A), Limitation Act, 1908 SC Section 122 limitation after amendment in TY 2009
Whether or not the provisions of section 122(2) of the Income Tax Ordinance, 2001 (hereinafter “ITO 2001”) being procedural in nature would have retrospective effect in pursuant to the amendment brought about in section 122(2) of the ITO 2001 through Finance Act 2009. Consequential extension in date of expiry of the limitation period would operate prospectively or since the Limitation Act 1908 is generally interpreted as a procedural law therefore the amendment would take effect retrospectively.
“122(2) No order under subsection (1) shall be amended by the Commissioner after the expiry of 5 years from the end of the financial year in which the Commissioner has issued or treated to have issued the assessment order to the taxpayer”. [hereinafter referred to as the “amended section 122(2)”]
It is held that because the terminal date of limitation is not changing through the amendment, hence respondents who filed their tax returns before the amendment will be governed by section 122(2) as it stood before the amendment.
10 Apr 18 214D, Finance Act, 2015 Section 214D Applicability on Tax Year 2015
The petitioner filed its return on 27.09.2016 i.e. much after the insertion of section 214D in the Ordinance, 2001 and at the time when the return was filed by the petitioner, the amendment had already been brought in the Ordinance, thus, the selection of the case for audit is without exception and does not suffer from any illegality. Writ dismissed.
10 Apr 18 138, 140 TRIB Muhammad Safdar Stay Order against coercive measures
Appeal of taxpayer bearing ITA No.878/LB/2018 is pending adjudication before Tribunal but in the meantime the department has started taking coercive measures for recovery. It is held that initiation of recovery proceedings by the Revenue Authorities without going through this appeal the scrutiny by an independent forum is not justified. Therefore, keeping in view this hardship, stay granted against recovery of impugned tax demand along with detachment of bank accounts.
29 Nov 17 176, 177, 214C 2017 LHC 3361 ICA 855 of 2014 Chenone Stores
Selection by Commissioner u/s 177 of Income Tax Ordinance, 2001 declared intra vires.
A provision of law, being inconsistent with a fundamental right, envisaged in Article 8 of the Constitution, can be declared void, but remains on the statute book, therefore, cannot be struck down.
Under Section 177 record can be called only for conducting audit after being selected by Commissioner or FBR, Whereas, under Section 176 record can be called for obtaining information or evidence from any person, as is evident from the caption of the Section.
Taxpayer raise objection against stereotype reasons given in the notices for selection before CIR or Taxation Officer and in case of adverse decision, alternate remedy under Section 7 of FBR Act, 2007 is available. Constitutional jurisdiction could not be availed without resorting to departmental remedies.
Explanations shall have retrospective effect till 01.07.2010 because the provisions of law being interpreted, clarified and so declared through the Explanations have attained current shape after amendment through Finance Act, 2010 having effect from the date ibid.
31 Jul 17 177, 214C, Audit Policy 2015 HC Nestle Pakistan ICA 338 of 2017
Time frame given under W. P. No. 32597 of 2015 for completion of audit Tax Year 2014 under audit policy 2015 i.e. 30.06.2017 is extended upto 31.12.2017.
19 May 17 21(c), 120, 122(5A) ATIR accepted the CIR Appeals opinion make after examination of record
Appellate Tribunal Inland Revenue showed confidence on opinion of CIR(Appeal) which formed by him after examining of documents.
13 Apr 17 138, 139, 140, Rule 136(2) FTO Recommendation against illegal recovery without jurisdiction
1. Notice U/S 138 is mandatory before going to attach assets of a Taxpayer U/S 140 for recovery of tax (if any).
2. Tax due (if any) from company /firm cannot be recovered from the Director /Partner directly without establishing 1st that the due tax is not recoverable from the company /firm.
3. Only the officer having proper/valid/lawful jurisdiction over a taxpayer can initiate recovery proceedings against that taxpayer.
4. Compelling the persons holding assets (i.e. Banks/Revenue etc.) of the taxpayers, for illegal recovery, tantamount to harassment and act of personal vendetta and reflecting administrative excesses of the department.
5. Officers involving in illegal action against the taxpayers are personally liable for Damages and costs of case along with defamation & loss of respect.
6. Act of misreporting of facts by the officers before the High Forums is illegal.
7. Holding the amounts of tax recoveries (if any) in an unofficial manner is an act of Highhandedness & illegal.
8. Services of notice is mandatory mere keeping in files is not sufficient for any proceeding/action.
9. Keeping & maintenance of proper records and order-sheets/note-sheets is also compulsory.
10. Delay in disposal of taxpayer’s applications is not justified.
11. If the order was supplied by the taxpayer and was not received officially, continuing recovery proceedings are not justified. It was the commissioner who was obliged to confirm the authenticity of appellate order.
28 Mar 17 137, 138, 140 LHC Call for explaination of bank attachment notice
Lahore High Court called for explanation from Chairman FBR about legal status of single bank attachment notice u/s 140 belonging to number of taxpayers and sent it to 26 different banks. Meanwhile stay has been granted from recovery and case adjourned for 31.03.2017.
21 Mar 17 124, 161, 205, Rule 44(4) ATIR Determination of default is mandatory
DCIR failed to point out any discrepancy or single default from the record produced by the taxpayer before him. When justaposed with original order it is evident that the impugned order is mere repetition of the original order. Departmental appeal dismissed.
20 Mar 17 221 ATIR Trib is empowered to rectify its order
Tribunal is empowered to rectify its order, provided material of primary importance, which was placed or available on record, has escaped consideration.
13 Mar 17 214C, 177, Circular No.1(177) S (IDT-FATE)/2015 FTO IRIS system needs to be upgraded
Assuming the jurisdiction and printing of bar code on the notices/orders at same time by two different units shows that IRIS is not working properly and it needs to be revisited and looked into by the FBR.
FBR is directed to look into the issue and take remedial measures to improve the system and report compliance within 60 days period.
07 Mar 17 53, 114, 115, 153(1)(c), 169, Clause 126F Second Schedule SC Exemption 126F KPK not permitted to FTR
Exemption of Clause 126F of Part I of Second Schedule is only applicable on taxpayers falling under the domain of "normal tax regime" doing business at KPK and FATA. The taxpayers whose business fall within the domain of "final tax regime" for whom the question of experiencing loss of business on account of internal strife does not arise. Petition dismissed.
24 Jan 17 177, 214C, Audit Policy 2015 Audit 2014 Nestle Pakistan Judgment High Court
FBR shall rectify the defects pointed out, hereinbefore, in the impugned Audit Policy 2015 and in the policies to be issued in future. High Court pointed out certain directions to incorporate in the rules or policies.
09 Jan 17 161(1B), 152(5) ATIR directed to specify every transaction for default of withholding
Assessing officer is required to specify each and every transaction on which default was committed by the taxpayer in deduction of tax at source. ATIR vacated the orders and remanded the case.
23 Dec 16 Section 18 Federal Ombudsmen Institutional Reforms Act, 2013 FTO No aurthority can assume jurisdiction during the matter pending with FTO
There is no requirement of issuing directions by the Ombudsman to stop the proceedings to the department in present of the section 18 of Federal Ombudsmen Institutional Reforms Act, 2013. Section ibid is self explanatory that no court or aurthority shall have jurisdiction to entertain the matter pending with or decided by the Ombudsman. Chairman FBR is advised to look into the matter and have an enquiry conducted against the defaulting officers/officials.
20 Nov 16 2, 4 of the Worker Welfare Ordinance, 1971 Supreme Court WWF C.A._1049_2011
Amendments in Section 2 and 4 of the Workers Welfare Ordinance, 1971 by Section 12 of the Finance Act 2006 and subsequently by Section 8 of the Finance Act 0f 2008 could not have been lawfully made through a Money Bill i.e. the amendments did not fall within the purview of the provisions of Article 73(2) of the Constitution. Hence, in result, taxability on FTR receipts struck down.
31 Oct 16 121(1)(d), 177 ATIR Set Aside expartee order of audit
Departmental appeal is accepted and order of CIR(Appeals) set aside and remand the case to the Revenue for afresh re-examination after affording proper opportunity.
01 Jul 16 116, Income Support Levy Act 2013 2016 LHC 1862 Income Support Levy Petition dismissed
W.P. No.19763 of 2013 decided on 17.06.2016
Income support levy introduced through Finance Act 2013 in the first place does not act discriminately in classifying persons into two categories. Petition dismissed.
12 May 16 22, 23, 66 of Income Tax Act, 1922 1981 PTD 210 HC ITR 31 of 1973 Expartee assessment on another date
Question of Law:
"Whether on the facts and circumstances of the case the Appellate Tribunal was justified in holding that the Income-tax Officer could resort to S. 23(4) of the Income-tax Act only on 2-12-1971 and not on any subsequent date on which no notice had been given to the respondent."
The Income-tax Officer has acted illegally in making ex parte assessment on a date which was not fixed for hearing without furnishing the assessee with requisite notices.
11 May 16 111, 122 98 TAX 81 ATIR ex partee amendment date is not date of fixation
It is confirmed that ex parte assessment was made on 6-10-2006, which is the date when neither the case was fixed for hearing, nor any notice regarding appearance was issued to the assessee. I am, therefore, of the view that the learned CIT (A) has rightly cancelled the order placing reliance on the judgment of Hon'ble Lahore High Court reported as 1973 PTD 283.
10 May 16 63 of ITO.1979, 121 1995 PTD 1159 ex partee amendment order date is not date of fixation
The date of hearing was fixed for 21-1-1987 while the ex parte assessment was passed on 24-1-1987. In these circumstances we set aside the assessment for the assessment year 1983-84 and remand the case back to the I.T.O. with direction that the assessee should be provided a reasonable opportunity of being heard before framing the assessment.
09 May 16 161, 205, 218, Circular 7(2) Concost Steel ATIR Clear 15 days for service of notice
The department has failed to issue notice as provided in rule 44(4) and without issuance of notice, the proceedings initiated under section 161/205 by the department is illegal.
ACIR has clearly violated the CBR Circular No.7(2) dated 01.02.1994 by not providing 15 clear days before making estimation/assessment, hence orders of both the authorities below are not sustainable.
06 May 16 66 of ITO, 1979 High Court Service of notice by someone else
In a case where a person has to comply with provisions as stringent as those of Section 66(1) of the Act are contented to be, he would authorise, explicitly or impliedly, a mere domestic servant to receive notices as his agent. The Posts and Telegraph Rules authorise the delivery of registered articles only to the addressee or his agent authorised in writing.
05 May 16 218 2010 PTD 1271 ATIR service of notice us 218 through all means
Service through courier service has been provided under the law but this could not be read in isolation; if we go through the sequence of this section in which different modes of service have been provided, one cannot overlook mode provided under section 218(2)(a), which states that notice personally served upon the representative of a person shall be treated as proper service.
The Department ought to have adopted mode of service provided in section 218(2)(c), where procedure for service of notice as provided under the Code of Civil Procedure has been laid down that in case of failure to serve the notices in the prescribed manner, service of notice could be made through affixture.

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