Karachi Tax Bar

KTBA proposes amendments to automatic stay in recovery cases

Budget 2021-2022, Taxation

KARACHI: Karachi Tax Bar Association (KTBA) has recommended amendments to provisions of the Income Tax Ordinance, 2001 related to automatic stay in recovery notices.

It is proposals for budget 2021/2022, the KTBA said that Sub-Section (2) of Section 138 if Income Tax Ordinance, 2001 provides that If the amount referred to in the notice issued under sub-section (1) is not paid within the time specified therein or within the further time, if any, allowed by the Commissioner, the Commissioner may proceed to recover from

— the taxpayer the said amount by one or more of the following modes, namely:

— attachment and sale of any movable or immovable property of the taxpayer;

— appointment of a receiver for the management of the movable or immovable property of the taxpayer.

— arrest of the taxpayer and his detention in prison for a period not exceeding six months arrest of the taxpayer and his detention in prison for a period not exceeding six months

Provision of automatic stays not all exhaustive.

The tax bar said that if a person pays ten percent of the disputed demand under section 140 even then the recovery from taxpayers may be made through the modes envisaged under sub-section (2) of section 138 which is harsh and rendered section 140 redundant and superfluous.

The tax bar proposed that the condition of the payment of ten percent of amount due shall also be made applicable for section 138 to create synchronization between section 138 and 140 of the Ordinance.

The proposed amendment seeks to address the inequity afforded in the law.

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