KARACHI: Federal Board of Revenue (FBR) to issue assessment notices of last ten years to potential taxpayers or those who failed to file return any of last five years.
The FBR recently issued updated Income Tax Ordinance, 2001 under which Section 121 authorized Commissioner Inland Revenue to issue assessment notices to new taxpayers or persons failed to file return any of past five years.
The Section 121 explained as:
121: Best judgment assessment
Sub-Section (1): Where a person fails to —
(aa) furnish a statement as required by a notice under sub-section (5) of section 115; or
(ab) furnish return of income in response to notice under sub- section (3) or sub-section (4) of section 114; or”;
(b) furnish a return as required under section 143 or section 144; or
(c) furnish the statement as required under section 116; or
(d) produce before the Commissioner, or 4[a special audit panel appointed under sub-section (11) of section 177 or]any person employed by a firm of chartered accountants or a firm of cost and management accountants under section 177, accounts, documents and records required to be maintained under section 174, or any other relevant document or evidence that may be required by him for the purpose of making assessment of income and determination of tax due thereon, the Commissioner may, based on any available information or material and to the best of his judgment, make an assessment of the taxable income 6[or income] of the person and the tax due thereon 7[and the assessment, if any, treated to have been made on the basis of return or revised return filed by the taxpayer shall be of no legal effect.
Sub-Section (2): As soon as possible after making an assessment under this section, the Commissioner shall issue the assessment order to the taxpayer stating—
(a) the taxable income;
(b) the amount of tax due;
(c) the amount of tax paid, if any; and
(d) the time, place and manner of appealing the assessment order.
Sub-Section (3): An assessment order under this section shall only be issued within five years after the end of the tax year or the income year to which it relates:
Provided that where notice for furnishing a return of income under sub-section (4) of section 114 is issued in respect of one or more of the last ten completed tax years in pursuance of proviso to sub-section (5) of section 114 an assessment order under this section shall only be issued within two years from the end of tax year in which such notice is issued.