Law: Income Tax Ordinance, 2001

Section: 4C, 122

Summary of the Decision The tribunal decided multiple appeals together because they involved the same legal issue: whether super tax under section 4C of the Income Tax Ordinance, 2001 can be imposed without first amending an already existing deemed assessment under section 120. Key Issue Taxpayers had filed returns that became deemed assessments under section 120. The tax authorities later imposed super tax (section 4C) directly, without reopening or amending those assessments under section 122. Question: Is this legally valid? Tribunal’s Findings Section 4C is a charging provision, but it does not override the assessment procedure. Once a return becomes a deemed assessment (section 120): It can only be altered through section 122 (amendment of assessment). Super tax cannot be imposed directly under section 4C if it was not included in the original return. The phrase “determine the tax payable” in section 4C does not give independent assessment powers outside the normal framework. Legal Principles Established Tax law follows a structured process: charge → assessment → recovery. Assessment must come before recovery. Any omitted tax (like super tax) must be added via section 122, not bypassed. Skipping section 122 is a jurisdictional defect, making the action invalid. Final Decision All orders imposing super tax directly under section 4C were: Declared unlawful Void from the beginning (void ab initio) Appeals were allowed, and all such tax demands were set aside. Important Clarification The tax department can still act, but: Only by following the correct legal process (i.e., using section 122). Bottom Line You cannot impose or recover super tax on a taxpayer after a deemed assessment exists unless you first legally amend that assessment under section 122. ORDER; Through this common order we want to disposed of the above captioned appeals as common questions of law and jurisdiction arise therein. Since the controversy involved in all these matters is substantially identical, and the arguments advanced by the learned representatives of the parties also traverse common ground, it would be appropriate to decide the same through a…