Section 200 of the Income Tax Ordinance, 2001 sets out when company officers and members of associations of persons can be held responsible for offences, subject to legal safeguards.
The Federal Board of Revenue (FBR) has outlined the responsibilities of company officers and members of associations of persons (AOPs) for offences committed under the Income Tax Ordinance, 2001 during Tax Year 2027.
The FBR issued the ordinance, updated up to June 30, 2026, for Tax Year 2027, which runs from July 1, 2026, to June 30, 2027. Section 200 explains when individuals associated with companies and AOPs may be held guilty of offences committed under the relevant part of the law.
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Company officers may face liability
Under Section 200(1), where a company commits an offence, every person who was its principal officer, director, general manager, company secretary or a similar officer at the time may be held guilty of the offence.
The provision also covers individuals acting, or claiming to act, in such capacities. The ordinance’s provisions would apply accordingly, notwithstanding anything contained in any other law.
AOP members also covered
Section 200(2) extends the provision to associations of persons. Where an AOP commits an offence, every person who was a member of the association at the time may be held responsible under the section.
However, the law provides an exception for individuals who meet specific conditions.
Legal protection for individuals
Under Section 200(3), the provisions concerning company officers and AOP members do not apply where the offence was committed without the individual’s consent or knowledge, and the person exercised all due diligence to prevent it.
The required diligence is assessed in view of the individual’s functions and the circumstances of the case.
The provision establishes a framework for responsibility for offences by companies and AOPs while recognising a defence for individuals who lacked knowledge or consent and took appropriate steps to prevent the offence.
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