Law: Income Tax Ordinance, 2001

Section: 111,122(2), 122, 122(5), 126A, 122(8), 111(1), 177, 214C

Crux

An amended assessment order issued beyond the five-year statutory limitation period prescribed under Section 122(2) of the Income Tax Ordinance, 2001, is legally defective, void, and cannot form the legal basis for tax recovery.

Statutory Law Analysis

1. Jurisdiction and Legal Framework The appeal was adjudicated by the Appellate Tribunal Inland Revenue under Section 131 of the Income Tax Ordinance, 2001. Following amendments introduced via the Tax Laws (Amendment) Act, 2024, specifically under Section 126A, jurisdiction for appeals involving tax assessments exceeding twenty million rupees was transferred from the Commissioner Inland Revenue (Appeals) to the Tribunal. In this instance, the tax demand of Rs. 35,046,039 fell within the Tribunal's revised jurisdiction.

2. Assessment and "Definite Information" The taxpayer, an individual deriving income from agriculture under Section 80, e-filed a return for Tax Year 2017. The tax department, relying on "definite information" regarding credit transactions totaling Rs. 102,362,684, initiated proceedings under Section 111(1) (Unexplained Income or Assets) read with Section 122(8) of the Ordinance to account for discrepancies between declared agricultural income and bank credit entries.