Law: Income Tax Ordinance, 2001

Section: 122(5A),122(9),120,113,29,39,57(1),56

(a) Income Tax Ordinance (XLIX of 2001)----Ss. 122(5A), 122(9), 120, 113, 29, 39 57(1)---Amendment of assessment---Issuance of various show cause notices, investigative in nature seeking information on various points---Legality---Repeated show cause notices were issued---Initially, notices were issued based on suspicion, seeking information, examination of books of accounts, wavering/dithering from one point of view to other---Suspicion started for tax year 2007 from difference in the figures of capital, unreliability of the figures of brought forward losses and non-payment/short payment of tax---Opening para of show cause notice for tax year 2006 had mentioned that taxpayer had filed original return showing loss of Rs.7,396,894 with tax payable at Rs.41,007 under S.113 of the Income Tax Ordinance, 2001, but afterwards a revised return was filed declaring an income of Rs.5,838,241 and after setting off brought forward losses had declared taxable income at NIL however, amended order under S.122(5A) of the Income Tax Ordinance, 2001, had been passed taking the figures of loss of Rs.7,396,894 as per original return---Similarly, for tax year 2005 two letters issued were investigative in nature seeking information on various points---Assessing Officer in the letter had asked the sources of income from (i) financial assistance from Pakistani living abroad (ii) sale of scrap (iii) exchange gain (iv) prior year liability written back (v) profit on short term investment were non-recurring and casual in nature and did not have any relation with the regular business of running an educational institution; and income from such sources was assessable under S.39 of the Income Tax Ordinance, 2001 as income from other sources but when reply was submitted by the taxpayer, another notice under S.122(9) of the Income Tax Ordinance, 2001 was issued, seeking further information/detail supporting evidence regarding mode of receipt, terms and conditions of qarz-e-hasna, evidence of scrap sales---Regarding claim of bad debts the taxpayer was asked to provide necessary evidence to the effect that the conditions as laid down in S.29 of the Income Tax Ordinance, 2001 had been fulfilled…

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