Law: Income Tax Ordinance 2001

Section: 111,120,122,122(9)

(a) Income Tax Ordinance (XLIX of 2001)--S.122 (9)-Show-cause notice-Object, purpose and scope-Roving inquiry-Prejudice to taxpayer-Error and prejudice should be clearly manifest from show-cause notice-There is no room for roving inquiry and fishing expedition-Purpose of serving notice on taxpayer is to notify him of the case against him-When such document contains incomplete information it can seriously prejudice taxpayer’s defence- When taxpayer if saddled with tax liability that is not disclosed in notice, such liability that is not sustainable.Commissioner Inland Revenue, Zone-I, LTU v. MCB Bank Limited 2021 PTD 1367; Honda Atlas Cars (Pakistan) Limited v. Appellate Tribunal Customs, Excise and Sales Tax 2021 PTD 1806; Caretex v. Collector of Sales Tax and Federal Excise 2013 PTD 1536; 1987 SCMR 1840; Collector Central Excise and Land Customs v. Rahim Din 1987 SCMR 1844 and Messrs Excide Pakistan v. The Deputy Collector 2004 PTD 1449 rel.(b) Income Tax Ordinance (XLIX of 2001)--Ss. 111, 120 & 122-Convention between the Government of the French Republic and the Government of the Islamic Republic of Pakistan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, Art. 4-Tax recovery- Double taxation-Non-resident-Bilateral treaty-Appellant was aggrieved of show-cause notice issued by authorities for recovery of tax-Plea raised by appellant was that he was a tax non-resident and was assessed in France-Validity-Provisions of Income Tax Ordinance, 2001, could not be invoked as Bilateral Tax Treaty between Pakistan and France had overriding effect-Appellant was filing his tax returns in France and in the light of treaty between Pakistan and France no action could be perpetuated in Pakistan by authorities- Appellant was absolved from taxation in Pakistan and no provision of Income Tax Ordinance, 2001, was attracted as he did not have any plausible source of income that could be deemed to have been accrued to him-Provision of S. 111 of Income Tax Ordinance, 2001, was applicable to residents of Pakistan only and could not be extended to appellant who was resident abroad and did not have taxable in…

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