Law: Income Tax Ordinance, 2001

Section: 133, 122(5), 115(4), 122(1)

Summary of the Order This case was a reference filed by the tax department under Section 133 of the Income Tax Ordinance, 2001, challenging a decision of the Appellate Tribunal Inland Revenue. Core Issue Whether credit entries in a taxpayer’s bank account can be treated as “definite information” under Section 122(5), allowing the tax authority to reopen and amend an assessment. Facts of the Case The taxpayer was a commission agent of Shell Pakistan Limited. Filed return under Section 115(4) (treated as assessment under Section 120). Tax department noticed unexplained bank credits. Reassessment initiated under Section 122(1) & 122(5). Officer treated entire bank deposits as sales, applied profit rate, and estimated income. Appeal dismissed by Commissioner but allowed by Tribunal, which annulled reassessment. Key Legal Findings “Definite Information” Requirement Reopening of assessment requires clear, specific, and reliable information. Mere bank entries do NOT automatically represent taxable income. Bank Credits Alone Are Insufficient Without independent inquiry or nexus to income, bank statements cannot justify reassessment. No audit or investigation was conducted in this case. No Change of Opinion Allowed Reassessment cannot be based on reanalysis of existing material. Commission Agent Principle A commission agent earns only commission, not total sales value. Treating gross deposits as sales is legally incorrect. Tribunal’s Role Tribunal is the final fact-finding authority. Its findings were based on evidence and free from legal error. Conclusion Bank credit entries do not constitute “definite information” on their own. The tax department acted without proper legal basis. Tribunal’s decision was correct and upheld. Final Outcome Reference decided against the tax department. Legal questions answered in negative. Tribunal’s order maintained.     ORDER;                                                           …