| Citation(s) |
|---|
| 2025 SLG 3914 2025 SLD 3914 = 2025 SHC 2175 |
Income Tax Reference Applications No.368 to 371 of 2024
Mr. Justice Muhammad Junaid Ghaffar Mr. Justice Mohammad Abdur Rahman,
Mr. Muhammad Aleem, Advocate. Through Ms. Tania Alam, Advocate.
Applicant: Ahmed Jan
VS
The Commissioner Inland Revenue
Law: Income Tax Ordinance, 2001
Section: 111,122(5),122(9)
Law: Constitution of Pakistan, 1973
Section: 4,10A
Summary:
The court allowed the Reference Applications challenging the Commissioner (Appeals) orders for tax years 2017-2020, relying on the Supreme Court ruling in Millat Tractors Limited. It held that the Explanation added to Section 111 of the Ordinance in 2022, which removes the need for separate notice under Section 111 if grounds are confronted through Section 122(9), should be applied prospectively and does not affect earlier tax years. Since no separate notices or orders under Section 111 were issued for those years, the additions were unlawful, leading to setting aside the impugned orders.
Core Points:
- The Supreme Court clarified that a separate notice and proceedings under Section 111 must precede amendment under Section 122 except where the 2022 Explanation applies.
- The Explanation in Section 111 dispenses with the requirement of a separate notice only prospectively, not for tax years before its insertion.
- For tax years 2017-2020, the Explanation does not apply as it was inserted after those years.
- No separate notices or orders under Section 111 were issued in these years, rendering additions under Section 111 unlawful.
- Proceedings under Sections 111 and 122 are distinct; Section 111 must be finalized before Section 122 proceedings proceed.
- Reference Applications were allowed and impugned orders set aside accordingly.
Law and Section Table
| Law | Section | Citation/Notes |
|---|---|---|
| Income Tax Ordinance | Section 111 | Requires notice and specific proceedings before amendments |
| Income Tax Ordinance | Section 122(5) | Amendment of assessment based on definite information |
| Income Tax Ordinance | Section 122(9) | Notice to amend assessment |
| Finance Act | Explanation to Section 111 | Added in 2021, substituted in 2022; clarifies notice requirements |
| Constitution of Pakistan | Article 4 | Right to fair trial and due process |
| Constitution of Pakistan | Article 10A | Protection of due process |
| Relevant Supreme Court Case | - | Millat Tractors Limited (on Section 111 notice requirements) |
J U D G M E N T