BR100 Increased By (0.01%)
BR30 Increased By (0.53%)
KSE100 Increased By (0.28%)
KSE30 Increased By (0.29%)
AGHA 6.38 Increased By ▲ 0.06 (0.95%)
BECO 4.35 Increased By ▲ 0.08 (1.87%)
BML 62.55 Increased By ▲ 0.10 (0.16%)
BOP 31.39 Increased By ▲ 0.16 (0.51%)
CNERGY 11.73 Increased By ▲ 0.14 (1.21%)
CSIL 5.91 Increased By ▲ 0.19 (3.32%)
FCCL 61.71 Increased By ▲ 0.17 (0.28%)
FFL 14.79 Decreased By ▼ -0.23 (-1.53%)
FNEL 1.24 Increased By ▲ 0.01 (0.81%)
KEL 6.32 Increased By ▲ 0.06 (0.96%)
KOSM 5.90 Increased By ▲ 0.34 (6.12%)
LOTCHEM 24.69 Increased By ▲ 0.01 (0.04%)
MLCF 103.93 Decreased By ▼ -0.15 (-0.14%)
NBP 173.32 Decreased By ▼ -1.96 (-1.12%)
NCPL 51.83 Decreased By ▼ -0.94 (-1.78%)
NPL 54.03 Decreased By ▼ -0.09 (-0.17%)
OGDC 315.87 Increased By ▲ 2.48 (0.79%)
PACE 9.26 Increased By ▲ 0.06 (0.65%)
PAEL 35.58 Decreased By ▼ -0.22 (-0.61%)
PIBTL 13.66 Increased By ▲ 0.19 (1.41%)
PPL 226.07 Increased By ▲ 4.26 (1.92%)
PRL 80.28 Increased By ▲ 1.20 (1.52%)
PTC 46.64 Decreased By ▼ -0.21 (-0.45%)
SSGC 23.82 Decreased By ▼ -0.05 (-0.21%)
TBL 9.24 Decreased By ▼ -0.07 (-0.75%)
TELE 7.55 Increased By ▲ 0.16 (2.17%)
TPL 24.54 Decreased By ▼ -0.57 (-2.27%)
TPLP 12.99 Increased By ▲ 0.48 (3.84%)
TREET 25.98 Decreased By ▼ -0.27 (-1.03%)
TRG 53.33 Decreased By ▼ -0.11 (-0.21%)

LAHORE: A higher appellate forum has allowed taxpayer to keep evaded tax for mentioning wrong provision of law in show cause notice by the department.

According to details, the department found discrepancies between the bank statement and statement of final taxation during the deal audit for the period in question and issued a show cause notice seeking explanation he nature and source of credit entries based on suppression of sales/tax evasion.

The taxpayer reply was found unsatisfactory and the assisting officer amended the assessment and subsequently created additional tax demand.

Feeling disgruntled, the taxpayer filed appeal before Commissioner Inland Revenue, which was disposed of with the observation that Section 111(1)(d) as well as general rate of tax on the income of taxpayer without altering his status under the minimum tax regime was wrongly applied by the assessing officer, thus, modified the assessment order with further direction to allow the credit of tax, if any already paid by the taxpayer.

Being dissatisfied, both the department as well as the taxpayer preferred their respective appeals before the Tribunal. The Tribunal vacated orders of both the authorities below and deleted the addition made by the assessing officer under section 111(1)(d).

The department approached to the higher appellate forum and maintained that despite the fact that income has been concealed by suppressing the sales, the Tribunal allowed the appeal of tax-payer on the ground that section 111(1)(d) was not attracted. The department further admitted that the show cause notice was issued to the taxpayer erroneously under section 111(1)(d) instead of clause (b) of the same.

The taxpayer, on the other hand, defended the Tribunal order by maintaining that additions made under section 111(1)(d) were rightly deleted, as the said provision prospectively, and not retrospectively. The higher appellate forum held that the taxpayer is exposed to the same tax liability in respect of the income that has escaped assessment, or been suppressed, i.e. taxpayer is liable to tax on the “net” income. Therefore, the evaded tax be allowed to be kept as a gift by the tax-payer on the ground that wrong provision of law has been mentioned despite it is determined that income has been concealed by suppressing the sales.

Copyright Business Recorder, 2025

Comments

Comments are closed for this article.