The Income Tax Ordinance, 2001 (ITO 2001) in Pakistan has granted power to the Commissioner to initiate provisional assessments when a person’s concealed asset is impounded by any government agency.
As per the latest revisions to the Income Tax Ordinance, 2001, issued by the Federal Board of Revenue (FBR), a Commissioner Inland Revenue is now bestowed with the authority to conduct provisional assessments for the recovery of due taxes from concealed assets, as outlined in Section 123 of the ordinance.
Provisional Assessment Empowerment – Section 123:
Section 123 of the Income Tax Ordinance, 2001, delineates the scope and authority vested in the Commissioner Inland Revenue regarding provisional assessments in cases involving concealed assets. The section consists of three sub-sections that elucidate the process and conditions under which provisional assessments can be carried out.
Sub-Section (1): This sub-section empowers the Commissioner to issue a provisional assessment order or provisional amended assessment order before issuing any formal assessment order under Section 121 or any amended assessment order under Section 122. The focus is on concealed assets that have been impounded by any department or agency of the Federal or Provincial Government.
Sub-Section (2): The Commissioner is required to finalize the provisional assessment order or provisional amended assessment order as promptly as possible. This emphasizes the expeditious resolution of cases involving concealed assets, ensuring a swift and effective process.
Sub-Section (3): The section provides a definition for “concealed asset,” describing it as any property or asset that, in the opinion of the Commissioner, was acquired from income subject to tax under the Income Tax Ordinance, 2001.
Objective and Significance:
The amendment is a strategic measure aimed at enhancing the effectiveness of tax authorities in identifying and taxing concealed assets. By providing the Commissioner Inland Revenue with the authority to initiate provisional assessments in a timely manner, the government aims to curtail tax evasion and ensure that due taxes are recovered promptly.
The definition of “concealed asset” underlines the intention to target assets acquired from income subject to tax. This aligns with the broader objective of promoting fiscal responsibility and discouraging practices that undermine the tax framework.
Conclusion:
The empowerment of the Commissioner Inland Revenue through Section 123 of the Income Tax Ordinance, 2001, signifies a proactive stance by the Pakistani government in combating tax evasion. By addressing concealed assets promptly and efficiently, the tax authorities aim to fortify the revenue collection system and maintain the integrity of the taxation framework. This amendment not only provides a tool to tackle concealed assets effectively but also serves as a deterrent to those who might attempt to circumvent their tax obligations. As the government continues to refine its tax laws, the emphasis on addressing concealed assets underscores its commitment to fostering a fair and transparent tax environment.
