Law: Income Tax Ordinance, 2001

Section: 122, 122(1), 152(2),121(1)(d), 177, 177(6), 214C, 214D, 111

Summary of Tribunal Order The appeal was filed by the daughter (legal heir) of a deceased taxpayer, challenging an ex-parte tax assessment that created a demand of Rs. 19,506,542 for Tax Year 2016. The taxpayer, Mst. Nargis Mumtaz, had passed away on 11-06-2020, but the tax authorities issued a notice and passed the assessment order in June 2022, nearly two years after her death. The taxpayer had originally declared income from: Behbood Saving Certificates (exempt income) Profit on debt (already taxed under final tax regime) and had also submitted a wealth statement with explanations. Key Legal Issue Whether tax proceedings and an assessment order can be validly issued against a deceased person. Tribunal Findings The tax department issued notices and passed the order in the name of a deceased person, which is legally invalid. Proper procedure requires that legal heirs must be issued notices and given an opportunity to be heard. Since the foundational notice was invalid, the entire proceedings were void. The Tribunal relied on established case law holding that: No tax liability can be created or enforced against a deceased person Notices must be served on legal heirs Decision The impugned assessment order was declared void and annulled. The appeal was allowed. Important Note The tax department is allowed to initiate fresh proceedings against the legal heirs, if legally permissible, after issuing proper notices. ORDER The titled appeal has been filed by the daughter of the appellant/taxpayer against the impugned order dated 24-06.2022 passed by the Assistant/Deputy Commissiorier Inland Revenue, Multan Zone, RTO, Multan (Assessing Officer), whereby the appeal filed against the ex-parte order passed under section 122(1) of the Income Tax Ordinance, 2001 (the Ordinance, 2001) creating a demand of Rs.19,506,542/-. Brief facts of the case, as gathered from the appeal file, are that the taxpayer (now deceased, having passed away on 11.06.2020) was an individual deriving income primarily from pension and investments. She electronically filed her return of income for the Tax Year 2016, decla?ing income from Behbood Saving Certificates and profit on debt, the…