Law: Income Tax Ordinance, 2001

Section: 21(C), 122(5A), 124A, 100,

  SUMMARY; Core Point The Tribunal partly allowed The Bank of Punjab's appeal against a section 122(5A) amended assessment for Tax Year 2025. It deleted most major additions—including the Seventh Schedule income-computation departure, investment/other-asset provisions, compensated absences, initial depreciation, and section 21(c) additions—but upheld the Rs. 4.636 billion addition for excess provisioning on advances and the Rs. 43.983 million addition relating to reversal of opening off-balance-sheet provisions. Summary The taxpayer, a scheduled commercial bank, challenged the ADCIR's order that raised its taxable income from Rs. 16.851 billion to Rs. 23.677 billion through multiple additions and disallowances. Jurisdiction and section 124A: The Tribunal rejected the bank's objections to the ADCIR's jurisdiction under section 122(5A) and its claim of violation of section 124A, relying on prior High Court and Tribunal authority. Banking income computation: The Tribunal held that a bank's income must be computed strictly under section 100A read with Rule 1 of the Seventh Schedule; the SBP-filed accounts are acceptable subject only to the specified Rule 1 adjustments. It therefore annulled the officer's broader departure from the disclosed accounts. Advances provision — upheld: The Rs. 4,635,959,000 addition was sustained because the claimed provision exceeded the Rule 1(c) ceiling: admissible provision was Rs. 3.223 billion, while the bank claimed Rs. 7.859 billion. The Tribunal also held that Rule 1(da), inserted by Finance Act 2024, does not support allowance of carried-forward IFRS 9 provisions. Investment and other-asset provisions — deleted: Additions of Rs. 58.487 million and Rs. 402.762 million were deleted, as the issue was settled by consistent Tribunal decisions, including decisions affirmed by the Lahore High Court. Off-balance-sheet provision — upheld: The Rs. 43.983 million addition was upheld because the bank did not establish that the opening provision had previously been allowed as a tax deduction; therefore, its reversal was not shown to be admissible. Compensated absences —…