10-08-2010, 10:37 PM
RECORDER REPORT
ISLAMABAD The income tax demands created through provisional assessment orders passed under section 122C of Income Tax Ordinance 2001 would not remain valid in case the taxpayer files his tax return, wealth statement and wealth reconciliation statements within 60 days of passing of assessment order.
In this connection, the FBR on Tuesday issued instructions to all Chief Commissioners of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs).
The FBR directive has explained an important provision of provisional assessment order in cases where the taxpayer is ready to become compliant by filing return, wealth statement and wealth reconciliation statements within 60 days of passing of provisional assessment order.
According to the FBR instructions, sub section (1) of section 122C of the Income Tax Ordinance, 2001 provides that where in response to a notice issued under sub section (3) or sub section (4) of section 114, a person fails to furnish return of income for any tax year, the Commissioner may, based on any available information or material and to the best of his judgement, make a provisional assessment of taxable income or income of the said person and issue a provisional assessment order specifying the taxable income or income assessed and the tax due thereon.
The order so passed under sub section (1) of section 122 attains finality after the expiry of the 60 days from the date of service of order of provisional assessment and all the provisions of the Ordinance apply accordingly. However, the provisions of sub section (2) of section 122C are not applicable, if return of income along with wealth statement, wealth reconciliation statement and other documents as required under sub section (2A) of section 116 are filed by the taxpayer for the relevant tax year, before the expiration of sixty days.
The representations have been made regarding the treatment of the provisional demand, where the compliance of the notices under section 114 (3) and (4) of the ordinance has been made before the expiry of sixty days from the service of the provisional assessment order and requests have been made to lay down procedure regarding this provisional tax demand raised and communicated to the compliant taxpayer.
In the given circumstances, it has been decided that where the compliance by the taxpayer under sub section (1) of section 122C is made before the expiration of sixty days from the service of the provisional assessment order, the provisional demand shall be taken into minus account by the Enforcement & Collection Division and an order under the proviso to sub section (2) of section 122C shall be passed by the Commissioner and communicated to the taxpayer accordingly, the FBR instructions added.
ISLAMABAD The income tax demands created through provisional assessment orders passed under section 122C of Income Tax Ordinance 2001 would not remain valid in case the taxpayer files his tax return, wealth statement and wealth reconciliation statements within 60 days of passing of assessment order.
In this connection, the FBR on Tuesday issued instructions to all Chief Commissioners of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs).
The FBR directive has explained an important provision of provisional assessment order in cases where the taxpayer is ready to become compliant by filing return, wealth statement and wealth reconciliation statements within 60 days of passing of provisional assessment order.
According to the FBR instructions, sub section (1) of section 122C of the Income Tax Ordinance, 2001 provides that where in response to a notice issued under sub section (3) or sub section (4) of section 114, a person fails to furnish return of income for any tax year, the Commissioner may, based on any available information or material and to the best of his judgement, make a provisional assessment of taxable income or income of the said person and issue a provisional assessment order specifying the taxable income or income assessed and the tax due thereon.
The order so passed under sub section (1) of section 122 attains finality after the expiry of the 60 days from the date of service of order of provisional assessment and all the provisions of the Ordinance apply accordingly. However, the provisions of sub section (2) of section 122C are not applicable, if return of income along with wealth statement, wealth reconciliation statement and other documents as required under sub section (2A) of section 116 are filed by the taxpayer for the relevant tax year, before the expiration of sixty days.
The representations have been made regarding the treatment of the provisional demand, where the compliance of the notices under section 114 (3) and (4) of the ordinance has been made before the expiry of sixty days from the service of the provisional assessment order and requests have been made to lay down procedure regarding this provisional tax demand raised and communicated to the compliant taxpayer.
In the given circumstances, it has been decided that where the compliance by the taxpayer under sub section (1) of section 122C is made before the expiration of sixty days from the service of the provisional assessment order, the provisional demand shall be taken into minus account by the Enforcement & Collection Division and an order under the proviso to sub section (2) of section 122C shall be passed by the Commissioner and communicated to the taxpayer accordingly, the FBR instructions added.
