Law: Income Tax Ordinance, 2001

Section: 120,120(a),116(2A),121,121(1),121(1)(a), 122C

INCOME TAX ORDINANCE, 2001?..Sections 120, 121 & 122C Amendment/examination relating to Sections 120(a), 121(1)(a) & 122C. Section 122C,Section 122C being a beneficial legislation has a retrospective application.--Question of law raised in this reference is "whether Section 122C inserted in the Income Tax Ordinance, 2001 through Finance Act, 2010 has a retrospective effect and can be applied to tax years prior to tax year 2011". Prior to the Finance Act, 2010, in case a person failed to furnish a return of income as per Section 120(a), the Commissioner on any available information or material and to the best of his , would make an assessment of the person. Through Finance (Amendment) Ordinance, 2009 subsection (a) of Section 121(1) was deleted and reinserted in the Ordinance in the shape of Section 122C which provides that if a person fails to furnish return of Income for any tax year, the Commissioner, on any available information or material and to the best of his , make a provisional assessment of the taxable income and issue a provisional assessment order specifying the taxable income or Income assessed of the tax due thereon. Subsection (2) of Section 122C provides that after the expiry of sixty days from the date of service of order of provisional assessment, the provisional assessment order shall be treated as [mal assessment order. The proviso to the said subsection states that the final assessment order will not be made if return of income alongwith wealth statement, wealth reconciliation statement and 6ther documents required under subsection (2A) of Section 116, are filed by the assessee for the relevant tax year during the period of sixty days. Examination of the erstwhile Section 121(1)(a) and Section 122C reveals that subsection (a) of Section 121(1) has been shifted into an independent provision i.e., 122C. The change in the two provisions is that the assessment order has been divided into two parts; i.e., provisional assessment followed by final assessment after a period of sixty days. Section 122C therefore provides an additional facility to the assessee to furnish a return during the period of sixty days and if he does so, provisional…

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