In Pakistan, the failure to file an income tax return for a specific tax year triggers a series of actions by the Federal Board of Revenue (FBR).
Individuals who neglect this obligation will receive a notice from the office of the Commissioner Inland Revenue (IR) as mandated by sub-section 4 of Section 114 of the Income Tax Ordinance, 2001.
This notice serves as a formal warning for continued non-compliance and emphasizes the potential legal consequences under relevant tax laws. A sample notice directed to the taxpayer typically outlines the specific tax year for which the return has not been filed and cites the corresponding section of the Income Tax Ordinance, 2001.
The notice informs the taxpayer, “You have not furnished a return of income for the tax year _________ required to be filed under clause ______ of sub-section (1) of section 114 of the Income Tax Ordinance, 2001. You are, hereby, required to furnish, within thirty days from the date of service of notice on or before_______________________, a Return of Income for the said tax year, in the prescribed form and verified in the prescribed manner. A copy of the Return of Income is enclosed.”
It also explicitly warns that failure to comply with the terms of the notice may lead to provisional assessment under sub-section (1) of section 122C of the Ordinance. Additionally, non-compliance could render the taxpayer liable to a penalty under sub-section (1) of section 182, or even prosecution under section 191 of the Ordinance, or a combination of both.
The provision for provisional assessment implies that the tax authorities may assess the taxpayer’s liability based on available information if they fail to submit the required return within the stipulated timeframe. This underscores the urgency for individuals to respond promptly to the notice and fulfill their filing obligations.
The potential penalties and legal actions highlight the seriousness with which the tax authorities view non-compliance with tax return filing obligations. It is crucial for individuals to be aware of these consequences and take timely action to avoid legal repercussions.
As taxpayers navigate the intricacies of the income tax system in Pakistan, staying informed about filing deadlines and promptly addressing any notices from the FBR becomes paramount. Understanding the implications of non-compliance can help individuals make informed decisions and ensure adherence to the tax laws of the country.
