Common types of notices sent by FBR

Note: The following disscussion is in the light of Income Tax Ordinance, 2001 only and will be updated over a period of time

The purpose of the following article is to create awareness regarding various types of routine correspondances/notices sent by FBR.

The following list does not cover all types of notices but only routine and common proceedings.

Although, it is always advised to hire a professional consultant to deal with the tax matters professionaly. 

Following are the most common types of notices sent by the FBR:

Notices relating to Annual Returns (114)/Statements (115) and Wealth Statements (116)

1) Notice to submit return of income for less than one year [Sec - 114(3)]

The Commissioner may, by notice in writing, require a person, or a person’s representative, as the case may be, to furnish a return of income by the date specified in the notice for a period of less than twelve months, where -

(a) the person has died;

(b) the person has become bankrupt or gone into liquidation;

(c) the person is about to leave Pakistan permanently;

(e) the Commissioner otherwise considers it appropriate to require such a return to be furnished.

Consequences of Non-compliance

i) Showcause notice for Imposition of penalty under section 182(1) -

Such person shall pay a penalty equal to 0.1% of the tax payable in respect of that tax year for each day of default subject to a maximum penalty of 50% of the tax payable provided that if the penalty worked out as aforesaid is less than twenty thousand rupees or no tax is payable for that tax year such person shall pay a penalty of twenty thousand rupees.

The expression “tax payable” means tax chargeable on the taxable income on the basis of assessment made or treated to have been made under section 120, 121, 122 or 122C


ii) Showcause 121(1)/(ab)/(d) best judgement order -

The Commissioner may, based on any available information or material and to the best of his judgement, make an assessment of the taxable income/income of the person and the tax due thereon and the assessment, if any, treated to have been made on the basis of return or revised return filed by the taxpayer shall be of no legal effect.

As soon as possible after making an assessment under this section, the Commissioner shall issue the assessment order to the taxpayer stating—

(a) the taxable income;

(b) the amount of tax due;

(c) the amount of tax paid, if any; and

(d) the time, place and manner of appealing the assessment order.

An assessment order under this section shall only be issued within five years after the end of the tax year or the income year to which it relates.

Provided that where notice for furnishing a return of income under sub-section (4) of section 114 is issued in respect of one or more of the last ten completed tax years in pursuance of proviso to sub-section (5) of section 114 an assessment order under this section shall only be issued within two years from the end of tax year in which such notice is issued.

2) Notice to submit return of income for any of the previous 5-10 years [Sec - 114(4)]

The Commissioner may, by notice in writing, require any person who, in the Commissioner’s opinion, is required to file a return of income under this section for a tax year or assessment year but who has failed to do so to furnish a return of income for that year within thirty days from the date of service of such notice or such longer or shorter period as may be specified in such notice or as the Commissioner may allow.

A notice under this sub-section may be issued in respect of one or more of the last five completed tax years or assessment years.

Provided that in case of a person who has not filed return for any of the last five completed tax years, notice under sub-section may be issued in respect of one or more of the last ten completed tax years.

Consequences of Non-compliance

i) Showcause notice for Imposition of penalty under section 182(1) -

Such person shall pay a penalty equal to 0.1% of the tax payable in respect of that tax year for each day of default subject to a maximum penalty of 50% of the tax payable provided that if the penalty worked out as aforesaid is less than twenty thousand rupees or no tax is payable for that tax year such person shall pay a penalty of twenty thousand rupees.

The expression “tax payable” means tax chargeable on the taxable income on the basis of assessment made or treated to have been made under section 120, 121, 122 or 122C


ii) Showcause 121(1)/(ab)/(d) best judgement order -

The Commissioner may, based on any available information or material and to the best of his judgement, make an assessment of the taxable income/income of the person and the tax due thereon and the assessment, if any, treated to have been made on the basis of return or revised return filed by the taxpayer shall be of no legal effect.

As soon as possible after making an assessment under this section, the Commissioner shall issue the assessment order to the taxpayer stating—

(a) the taxable income;

(b) the amount of tax due;

(c) the amount of tax paid, if any; and

(d) the time, place and manner of appealing the assessment order.

An assessment order under this section shall only be issued within five years after the end of the tax year or the income year to which it relates.

Provided that where notice for furnishing a return of income under sub-section (4) of section 114 is issued in respect of one or more of the last ten completed tax years in pursuance of proviso to sub-section (5) of section 114 an assessment order under this section shall only be issued within two years from the end of tax year in which such notice is issued.

iii) Recovery of tax (if not already paid) out of property and through arrest of taxpayer u/s 138

3) Notice to submit statement of income subject to final tax for any of the previous 5 years[Sec - 115(5)]  

The Commissioner may, by notice in writing, require any person who, in his opinion, is required to file a prescribed statement under this section for a tax year but who has failed to do so, to furnish a prescribed statement for that year within thirty days from the date of service of such notice or such longer period as may be specified in such notice or as he may, allow.

A notice under sub-section (5) may be issued in respect of one or more of the last five completed tax years.

Consequences of Non-compliance

i) Showcause notice for Imposition of penalty under section 182(1A) -

Such person shall pay a penalty of Rs.5000 if the person had already paid the tax collected or withheld by him within the due date for payment and the statement is filed within ninety days from the due date for filing the statement and, in all other cases, a penalty of Rs.2500 for each day of default from the due date subject to a minimum penalty of Rs. 10,000.

iii) Recovery of tax (if not already deducted) out of property and through arrest of taxpayer u/s 138 -

4) Notice to submit wealth statement [Sec - 116(1)]

The Commissioner may, by notice in writing, require any person being an individual to furnish, on the date specified in the notice, a statement (hereinafter referred to as the "wealth statement") in the prescribed form and verified in the prescribed manner giving particulars of —

(a) the person’s total assets and liabilities as on the date or dates specified in such notice;
(b) the total assets and liabilities of the person’s spouse, minor children, and other dependents as on the date or dates specified in such notice;
(c) any assets transferred by the person to any other person during the period or periods specified in such notice and the consideration for the transfer;
(d) the total expenditures incurred by the person, and the person’s spouse, minor children, and other dependents during the period or periods specified in the notice and the details of such expenditures; and
(e) the reconciliation statement of wealth.

Consequences of Non-compliance

i) Showcause notice for Imposition of penalty under section 182(1AA) -

Such person shall pay a penalty of 0.1% of the taxable income per week or Rs.20,000 whichever is higher.

ii) Proceedings under section 111(1) unexplained income and assets

iii) Showcause 121(1)/(d) best judgement order -

The Commissioner may, based on any available information or material and to the best of his judgement, make an assessment of the taxable income/income of the person and the tax due thereon and the assessment, if any, treated to have been made on the basis of return or revised return filed by the taxpayer shall be of no legal effect.

As soon as possible after making an assessment under this section, the Commissioner shall issue the assessment order to the taxpayer stating—

(a) the taxable income;

(b) the amount of tax due;

(c) the amount of tax paid, if any; and

(d) the time, place and manner of appealing the assessment order.

An assessment order under this section shall only be issued within five years after the end of the tax year or the income year to which it relates.

Provided that where notice for furnishing a return of income under sub-section (4) of section 114 is issued in respect of one or more of the last ten completed tax years in pursuance of proviso to sub-section (5) of section 114 an assessment order under this section shall only be issued within two years from the end of tax year in which such notice is issued.

5) Notice to submit Foriegn Assets Declaration [Sec 116A(2)]

The Commissioner may by a notice in writing require any person being an individual who, in the opinion of the Commissioner on the basis of reasons to be recorded in writing, was required to furnish a foreign income and assets statement under sub-section (1) but who has failed to do so to furnish the foreign income and assets statement on the date specified in the notice.

Consequences of Non-compliance

i) Showcause notice for Imposition of penalty under section 182(1AAA) -

Such persons shall pay a penalty of 2 percent of the foreign income or value of the foreign assets for each year of default.

ii) Proceedings under section 111(1) unexplained income and assets

6) Notice of incomplete return submitted by taxpayer after expiry of 180 days [Sec 120(3)]

Where the return of income furnished is not complete, the Commissioner shall issue a notice to the taxpayer informing him of the deficiencies (other than incorrect amount of tax payable on taxable income, as specified in the return, or short payment of tax payable) and directing him to provide such information, particulars, statement or documents by such date specified in the notice.

iii) Showcause 121(1)/(d) best judgement order -

The Commissioner may, based on any available information or material and to the best of his judgement, make an assessment of the taxable income/income of the person and the tax due thereon and the assessment, if any, treated to have been made on the basis of return or revised return filed by the taxpayer shall be of no legal effect.

As soon as possible after making an assessment under this section, the Commissioner shall issue the assessment order to the taxpayer stating—

(a) the taxable income;

(b) the amount of tax due;

(c) the amount of tax paid, if any; and

(d) the time, place and manner of appealing the assessment order.

An assessment order under this section shall only be issued within five years after the end of the tax year or the income year to which it relates.

Provided that where notice for furnishing a return of income under sub-section (4) of section 114 is issued in respect of one or more of the last ten completed tax years in pursuance of proviso to sub-section (5) of section 114 an assessment order under this section shall only be issued within two years from the end of tax year in which such notice is issued.

Notices relating to Audit/Amending Assessment order (CLICK HERE)

1) Notice of call for records/documents within 6 years [Sec 177(1)] (CLICK HERE)

2) Notice under section 176(1) for audit under section 214(c) read with Section 177 (CLICK HERE)

3) Showcause under Sec 122(9) (CLICK HERE)

     a) Amending original assessment order or best judgement ordedr [Sec 122(1)]

     b) Amending assessment order after revised reurn [Sec 122(3)]

     c) Amending assessment order on the basis of i) definite information ii) Audit [Sec 122(5)]

4) Showcause 221(2) Rectification of Mistakes (CLICK HERE)

Notice for witholding of taxes Monitoring 161(1A)/205

Misc. Notices (Will be updated over period of time)

152(5) non deduction tax on payment to non resident

176(1) (Penalty 181)

Notice for Revision by Chief Commissioner 122B

140(1) recovery from person holding money on behalf of taxpayer

137(2) Amount of tax to be paid wihtihn 30 days of notice

138(1) recovery of tax through property/arrest upto 6 months

179 urdu english record

Showcause 122(B)(2) Exemption lower rate certificate

Showcause 129(2) Appeal decision to increase tax or decrease refund

Showcause 132(4) ITAT decision

Showcause 147(6) Estimate Advance Tax

Showcause 170(4) Refunds

Showcause 172(5) Representative Non Resident

Showcause 182(2) Penalties

Showcause 223(6) Authorized Rerpresentative

Showcause 230F(9) Directorate General Immovable Property

101(A)(7) Capital gain on assets outside Pakistan



Author:

Zeeshan Qureshi
Income Tax Practitioner
Specialist in dealing audit notices (177/214C) and provisional assessments (122)

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