Properties obtained from foreign remittances: owners to face legal action for failure to respond to notices

The owners of big properties earned from foreign remittances would face legal proceedings under section 122(C) of the Income Tax Ordinance 2001, in case such undocumented persons failed to respond to notices for filing of income tax returns and wealth statements.
Sources told Business Recorder here on Monday that tax exemption has been granted to foreign remittances under section 111 of the Income Tax Ordinance 2001. The investment made through foreign remittances cannot be probed into by the tax department. The amount may have been utilised for construction/purchase of luxurious bungalows in Pakistan.
If such person has not declared such luxurious properties and also has failed to respond to notices, the department would be empowered to initiate legal proceedings against such property holders under section 122 (c) of the Income Tax Ordinance 2001. The investment made in such property would be deemed as 'income', and taxed accordingly.
If the owner of luxurious property, who has acquired property through foreign remittances, has not filed return, how the tax department would know about the source of investment in property? In the absence of response of concerned person, the tax department would not be in a position to know whether the property has been purchased from local income or foreign remittances. If the person timely responds to the notice under section 122(c) of the Income Tax Ordinance 2001, the tax department would not be in a position to initiate proceedings against such persons.
If he does not respond to notice, the department would be justified to initiate proceedings against him. Without necessary evidence, the department would have no clue that foreign remittances have been used for the purchase of property or not. Interestingly, if the person failed to respond to notice within 60 days' period, the tax department can make final assessment, which cannot be challenged in courts, sources added.