Law: Income Tax Ordinance, 2001

Section: 138, 147, 147(7), 122, 138(1)

Summary of Judgment This Constitutional Petition challenged the legality of a recovery notice issued under Section 138(1) of the Income Tax Ordinance, 2001, for unpaid advance tax under Section 147, on the grounds that no formal assessment order had been passed and that due process was not followed. The Court held that, by virtue of Section 147(7), unpaid advance tax is deemed to be an amount due under an assessment order. Therefore, no independent or separate assessment order under Sections 120 or 122 is required for recovery of such tax. Accordingly, the challenge on this ground failed. However, the Court further held that before initiating recovery proceedings under Section 138(1), it is mandatory for the tax authorities to issue a notice under Section 137(2), specifying the amount due and allowing reasonable time for payment. In the present case, the respondents issued the recovery notice in undue haste without complying with this mandatory requirement and without affording reasonable opportunity to the petitioner. Consequently, the impugned notice dated 13.11.2025 was declared unlawful for violation of due process and the mandate of Article 4 of the Constitution. The respondents were directed to proceed afresh in accordance with law. Judgment Sheet 1. KHALID ISHAQ, J. This judgment will decide the captioned Constitutional Petition as well as the connected petition, bearing W.P. No. 68040 of 2025, filed under Article 199 of the Constitution of the Islamic Republic of Pakistan (the "Constitution"), as both these petitions involve common questions of law and facts which require determination by this Court. For the purpose of this judgment, the facts of the present case shall suffice. 2. Through this Constitutional Petition, the petitioner has laid a challenge to the notice dated 13.11.2025 ("Impugned Notice"), issued under Section 138(1) of the Income Tax Ordinance, 2001 (the "Ordinance, 2001") by respondent No. 5. The Impugned Notice seeks recovery of arrears of tax on account of liability of advance tax under Section 147 of the Ordinance, 2001. It is the case of the petitioner that no assessment order has been passed in terms…

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