Section 123 empowers the Commissioner to issue provisional assessments when concealed or undeclared offshore assets are discovered

ISLAMABAD: The Federal Board of Revenue (FBR) has outlined the powers of the Commissioner of Inland Revenue to issue provisional assessment orders where concealed assets or previously undeclared offshore assets are discovered.

Under Section 123 of the Income Tax Ordinance, 2001, as updated up to June 30, 2026 for Tax Year 2027, the Commissioner may take action before issuing an assessment under Section 121 or an amended assessment under Section 122.

Assessment of concealed assets

Section 123 provides that where a concealed asset belonging to a person is impounded by any department or agency of the federal or provincial government, the Commissioner may issue a provisional assessment order for the person’s last completed tax year.

The provisional order must take the concealed asset into account in determining the person’s tax position.

The Commissioner may also issue a provisional amended assessment order, where applicable, before an amended assessment under Section 122 is issued.

Undeclared offshore assets

The provision separately covers offshore assets that have not previously been declared.

Where an offshore asset is discovered by the Commissioner or any department or agency of the federal or provincial government, the Commissioner may issue a provisional assessment or provisional amended assessment for the person’s last completed tax year.

The discovered offshore asset must be taken into account in the provisional assessment.

Finalisation of provisional assessment

The law requires the Commissioner to finalise a provisional assessment order or provisional amended assessment order as soon as practicable.

The provision therefore allows the tax authority to take an interim assessment action following the discovery of assets while the relevant proceedings are subsequently finalised.

Definition of concealed asset

Section 123 defines a “concealed asset” as any property or asset which, in the opinion of the Commissioner, was acquired from income chargeable to tax under the Income Tax Ordinance, 2001.

The provision forms part of the assessment framework under the Income Tax Ordinance and enables the Commissioner to account for assets that indicate previously undisclosed taxable income.