SOLVED INCOME TAX

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QUESTION BY = MR.ATEEQ ANSWER BY = NOMI BRO
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(NOMI BRO)
Question No.
1- Income Tax Return section 114, 115 and wealth
statement 116.
Question No.2-Appeals section 127, 128 and 129.
Question No.3 Assessment Section 120,121, 122.
Question No. 4 Numerical .
Question No.5. True False or MCQ.
Question No. 6 Head of Income
Difference FTR and NTR.

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001
114. Return of income.-
(1) Subject to this Ordinance, the following persons are required to furnish a return of income for a tax year,
namely:–
(a) every company;
(ab) every person (other than a company) whose taxable income for the year exceeds the maximum
amount that is not chargeable to tax under this Ordinance for the year;
Clause (a) substituted by Finance Act, 2003 which previously read as follows :
(a) Every company and any other person whose taxable income for the year exceeds the
maximum amount that is not chargeable to tax under this Ordinance for the year; and
(ac) any non-profit organization as defined in clause (36) of section 2; and
(ad) any welfare institution approved under clause (58) of Part I of the Second Schedule;
(b) any person not covered by clause (a), (ab), (ac) or (ad) who,–
(i) has been charged to tax in respect of any of the two preceding tax years;
(ii) claims a loss carried forward under this Ordinance for a tax year;
(iii) owns immovable property with a land area of two hundred and fifty square yards or more or
owns any flat located in areas falling within the municipal limits existing immediately before
the commencement of Local Government laws in the provinces; or areas in a Cantonment;
or the Islamabad Capital Territory.
clause (b) before substitution read as follows
(b) any person not covered by clause (a) or (ab) who –
(i) has been charged to tax in respect of any of the four preceding tax years;
(ii) claims a loss carried forward under this Ordinance for a tax year;
(iii) owns immovable property, with a land area of two hundred and fifty square yards or more,
located in areas falling in the limits of a Metropolitan/Municipal Corporation, a Cantonment
Board, or the Islamabad Capital Territory or owns any flat;
(iv) owns a motor vehicle (other than a motor cycle) in Pakistan;
(v) subscribes for a telephone including a mobile phone in Pakistan;
(vi) has undertaken foreign travel in the tax year other than travel by a non-resident person or
any travel for the purposes of the Haj, Umrah, or Ziarat; or
(vii) is member of a club where the monthly subscription exceeds five hundred rupees or the
admission fee exceeds twenty-five thousand rupees.
(2) A return of income -
(a) shall be in the prescribed form and shall be accompanied by such annexures, statements or
documents as may be prescribed;
(b) shall fully state all the relevant particulars or information as specified in the form of return,
including a declaration of the records kept by the taxpayer; and
(c) shall be signed by the person, being an individual, or the person's representative where section
172 applies.
Sub-Section (2) substituted which previously read as follows :

3. DTL (2016-2017)
QUESTION BY = MR.ATEEQ ANSWER BY = NOMI BRO
ITS PREPAIRED BY STUDENT ITS CONTAIN ERRORS
(NOMI BRO)
"(2) A return of income –
(a) shall be in the prescribed form;
(b) shall state the information required by the form, including a declaration of the records kept
by the taxpayer;
(c) in the case of a person carrying on a business, shall include an income statement, balance
sheet, and any other document as may be prescribed for the tax year; and
(d) shall be signed by the person or the person’s representative."
(2A) A return of income filed electronically on the web or any magnetic media or any other computer
readable media as may be specified by the Board shall also be deemed to be a return for the purpose
of sub-section (1); and the Board may, by notification in the official Gazette, make rules for determining
eligibility of the data of such returns and e-intermediaries who will digitize the data of such returns and
transmit the same electronically to the Income Tax Department under their digital signatures and other
matters relating to electronics filling of returns, statements or documents etc.
(3) The Commissioner may, by notice in writing, require a person, or a person’s representative, as the case
may be, to furnish a return of income by the date specified in the notice for a period of less than twelve
months, where –
(a) the person has died;
(b) the person has become bankrupt or gone into liquidation;
(c) the person is about to leave Pakistan permanently;
clause (d) omitted by Finance Act, 2003 which previously read as follows ;
(d) the person is otherwise about to cease carrying on business in Pakistan; or
(e) the Commissioner otherwise considers it appropriate to require such a return to be furnished.
(4) Subject to sub-section (5), the Commissioner may, by notice in writing, require any person who, in the
Commissioner’s opinion, is required to file a return of income under this section for a tax year or
assessment year but who has failed to do so to furnish a return of income for that year within thirty days
from the date of service of such notice or such longer period as may be specified in such notice or as
the Commissioner may allow.
(5) A notice under sub-section (4) may be issued in respect of one or more (Substituted for "only in respect
of the" by Finance Act, 2003) of the last five completed tax years or assessment years.
(6) Any person who, having furnished a return, discovers any omission or wrong statement therein, may
furnish a revised return within five years of the date that the original return was furnished.
(7) Every return purporting to be made or signed by, or on behalf of a person shall be treated as having
been duly made by the person or with the person’s authority until the person proves the contrary.

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115. Persons not required to furnish a return of income.-
(1) Where the entire income of a taxpayer in a tax year consists of income chargeable under the head
"Salary", the taxpayer may, instead of furnishing a return as required under section 114 furnish –
(a) a certificate from the person’s employer in the prescribed form stating such particulars, and
accompanied by such statements, and verified in such manner, as may be prescribed, and such
certificate shall be, for the purposes of this Ordinance, treated as a return of income furnished
under section 114:
(Inserted by Finance Ordinance Act, 2005)
Provided that a taxpayer shall not be required to furnish a certificate, if his employer has
furnished for the same tax year, Annual Statement of Deduction of Income Tax From
Salary as prescribed under the Income Tax Rules, 2002.
(b) a wealth statement referred to in section 116.
(3) The following persons shall not be required to furnish a return of income for a tax year solely by reason
of sub-clauses (iii) through (vii) of clause (b) of subsection (1) of section 114 –
(a) A widow;
(b) an orphan below the age of twenty-five years;
(c) a disabled person; or
(d) in the case of ownership of immovable property, a non-resident person.
(4) Any person who is not obliged to furnish a return for a tax year because all the person’s income is
subject to final taxation under sections (Figure and comma "148," omitted by Finance Act, 2003) 5, 6,
7, 15, 113A, 113B, 148, clauses (a), (b) and (d) of sub-section (1) of section 151, section 152, 153, 154,
156, 156A, sub-section (3) of section 233, clause (a) andclause (b) of sub-section (1) of section
233A or sub-section (5) of section 234 shall furnish to the Commissioner a statement showing such
particulars relating to the person’s income for the tax year in such form and verified in such manner as
may be prescribed.
(5) Subject to sub-section (6), the Commissioner may, by notice in writing, require any person who, in his
opinion, is required to file a prescribed statement under this section for a tax year but who has failed to
do so, to furnish a prescribed statement for that year within thirty days from the date of service of such
notice or such longer period as may be specified in such notice or as he may allow.
(6) A notice under sub-section (5) may be issued in respect of one or more of the last five completed tax
years.

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116. Wealth statement.-
(1) The ("Subject to subsection (2)" substituted by Finance Bill 2007) the Commissioner may, by notice in
writing, require any person to furnish, on the date specified in the notice, a statement (hereinafter
referred to as the "wealth statement") in the prescribed form and verified in the prescribed manner
giving particulars of –
(a) the person’s total assets and liabilities as on the date or dates specified in such notice;
(b) the total assets and liabilities of the person’s spouse, minor children, and other dependents as on
the date or dates specified in such notice;
(c) any assets transferred by the person to any other person during the period or periods specified in
such notice and the consideration for the transfer; and
(d) the total expenditures incurred by the person, and the person’s spouse, minor children, and other
dependents during the period or periods specified in the notice and the details of such
expenditures.
(2) Every resident taxpayer filing a return of income for any tax year whose last declared or assessed
income or the declared income for the year, is five hundred thousand rupees or moreshall furnish a
wealth statement for that year along with such return.
(3) Where a person, who has furnished a wealth statement, discovers any omission or wrong statement
therein, he may, without prejudice to any liability incurred by him under any provision of this Ordinance,
furnish a revised wealth statement at any time before an assessment, for the tax year to which it
relates, is made under sub-section (1) or sub-section (4) of section 122.
02
127. Appeal to the Commissioner (Appeals).-
(1) Any person dissatisfied with any order passed by a Commissioner or a taxation officer
under section 121, 122, 143, 144, 162, 170, 182, 183, 184, 185, 186, 187, 188, or 189,
or an order under sub-section (1) of section 161 holding a person to be personally liable
to pay an amount of tax, or an order under clause (f) of sub-section (3) of section
172 declaring (Substituted for "treating" by Finance Act, 2003) a person to be the representative of a
non-resident person, or an order under section 221 refusing to rectify the mistake, either
in full or in part, as claimed by the taxpayer or an order having the effect of enhancing the
assessment or reducing a refund or otherwise increasing the liability of the person, may
prefer an appeal to the Commissioner (Appeals) against the order.
(2) No appeal under sub-section (1), shall be made by a taxpayer against an order of assessment unless
the taxpayer has paid,-
(a) the amount of tax due under sub-section (1) of section 137, and
(b) No appeal under sub-section (1), shall be made by a taxpayer again** an order of assessment
unless the taxpayer has paid the amount of tax due under sub-section (1) of section 137.

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(3) An appeal under sub-section (1) shall–
(a) be in the prescribed form;
(b) be verified in the prescribed manner;
(c) state precisely the grounds upon which the appeal is made;
(d) be accompanied by the prescribed fee specified in sub-section (4); and
(e) be lodged with the Commissioner (Appeals) within the time set out in sub-section
(5).
(4) The prescribed fee shall be –
(a) in the case of an appeal against an assessment, the lesser of one thousand rupees
or ten per cent of the tax assessed; or
(b) in any other case –
(i) where the appellant is a company, one thousand rupees; or
(ii) where the appellant is not a company, two hundred rupees.
(5) An appeal shall be preferred to the Commissioner (Appeals) within thirty days of the
following--
(a) where the appeal relates to any assessment or penalty, the date of service of
the notice of demand relating to the said assessment or penalty, as the case may
be; and
(b) in any other case, the date on which the order to be appealed against is served.
(6) The Commissioner (Appeals) may, upon application in writing by the appellant, admit an
appeal after the expiration of the period specified in sub-section (5) if the Commissioner
(Appeals) is satisfied that the appellant was prevented by sufficient cause from lodging
the appeal within that period.
128. Procedure in appeal.-
(1) The Commissioner (Appeals) shall give notice of the day fixed for the hearing of the
appeal to the appellant and to the Commissioner against whose order the appeal has been
made.
(2) The Commissioner (Appeals) may adjourn the hearing of the appeal from time to time.
(3) The Commissioner (Appeals) may, before the hearing of an appeal, allow an appellant to
file any new ground of appeal not specified in the grounds of appeal already filed by the
appellant where the Commissioner (Appeals) is satisfied that the omission of the ground
from the form of the appeal was not wilful or unreasonable.

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(4) The Commissioner (Appeals) may, before disposing of an appeal, call for such particulars
as the Commissioner (Appeals) may require respecting the matters arising in the appeal
or cause further enquiry to be made by the Commissioner.
(5) The Commissioner (Appeals) shall not admit any documentary material or evidence which
was not produced before the Commissioner unless the Commissioner (Appeals) is satisfied
that the appellant was prevented by sufficient cause from producing such material or
evidence before the Commissioner.
129. Decision in appeal.-
(1) In disposing of an appeal lodged under section 127, the Commissioner (Appeals) may–
(a) make an order to confirm, modify or annul the assessment order, after examining
such evidence as required by him respecting the matters arising in appeal or causing
such further enquiries to be made as he deems fit;
before substitution clause (a) read as follows:-
(a) in the case of an appeal against an assessment order –
(i) make an order to set aside the assessment order and direct the Commissioner
to make a new assessment order in accordance with any directions or
recommendations of the Commissioner (Appeals); or
(ii) make an order to confirm, modify or annul the assessment order; or
(b) in any other case, make such order as the Commissioner (Appeals) thinks fit.
(2) The Commissioner (Appeals) shall not increase the amount of any assessment order or
decrease the amount of any refund unless the appellant has been given a reasonable
opportunity of showing cause against such increase or decrease, as the case may be.
(3) Where, as the result of an appeal, any change is made in the assessment of an
association of persons or a new assessment of an association of persons is ordered to be
made, the Commissioner (Appeals) may authorise the Commissioner to amend
accordingly any assessment order made on a member of the association and the time
limit in sub-section (2) of section 122 shall not apply to the making such amended
assessment.
(4) As soon as practicable after deciding an appeal, the Commissioner (Appeals) shall serve
his order on the appellant and the Commissioner.
(5) Where the Commissioner (Appeals) has not made an order on an appeal before the
expiration of three months from the end of the month in which the appeal was lodged, the
relief sought by the appellant in the appeal shall be treated as having been given and all
the provisions of this Ordinance shall have effect accordingly.
(6) For the purposes of sub-section (5), any period during which the hearing of an appeal is
adjourned on the request of the appellant shall be excluded in the computation of the
period of three months referred to in that sub-section.
(7) The provisions of sub-section (5) shall not apply unless a notice by the appellant stating
that no order under sub-section (1) has been made is personally served by the appellant
on the Commissioner (Appeals) not less than thirty days before the expiration of the
period of three months.

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03
120. Assessments.-
(1) Where a taxpayer has furnished a complete return of income (other than a revised return
under sub-section (6) of section 114) for a tax year ending on or after the 1st day of
July, 2002,-
(a) the Commissioner shall be taken to have made an assessment of taxable income for
that tax year, and the tax due thereon, equal to those respective amounts specified
in the return; and
(b) the return shall be taken for all purposes of this Ordinance to be an assessment
order issued to the taxpayer by the Commissioner on the day the return was
furnished.
(1A) Notwithstanding the provisions of sub-section (1), the Commissioner may select a
person for an audit of his income tax affairs under section 177 and all the provisions
of that section shall apply accordingly
(2) A return of income shall be taken to be complete if it is in accordance with the provisions
of sub-section (2) of section 114.
(3) Where the return of income furnished is not complete, the Commissioner shall issue a
notice to the taxpayer informing him of the deficiencies (other than incorrect amount of
tax payable on taxable income, as specified in the return, or short payment of tax
payable) and directing him to provide such information, particulars, statement or
documents by such date specified in the notice.
(4) Where a taxpayer fails to fully comply, by the due date, with the requirements of the
notice under sub-section (3), the return furnished shall be treated as an invalid return as
if it had not been furnished.
(5) Where, in response to a notice under sub-section (3), the taxpayer has, by the due date,
fully complied with the requirements of the notice, the return furnished shall be treated to
be complete on the day it was furnished and the provisions of sub-section (1) shall apply
accordingly.
(6) No notice under sub-section (3) shall be issued after the end of the financial year in which
return was furnished, and the provisions of sub-section (1) shall apply accordingly.
Section 120 substituted by Finance Act, 2003 which previously read as follows :
120. Assessments.-
Where a taxpayer has furnished a return of income (other than a revised return under sub-section (6) of section 114)
for a tax year ending on or after 1st
day of July, 2002, –
(a) the Commissioner shall be taken to have made an assessment of the taxable income of the taxpayer for the year
and the tax due thereon, equal to those respective amounts specified in the return; and

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(b) the taxpayer’s return shall be taken for all purposes of this Ordinance to be an assessment order issued to the
taxpayer by the Commissioner on the day the return was furnished.
121. Best judgement assessment.-
(1) Where a person fails to-
(a) furnish a return of income as required by a notice under sub-section (3) or
sub-section (4) of section 114; or
(b) furnish a return as required under section 143 or section 144; or
(c) furnish the statement as required under section 116; or
(d) produce before the Commissioner, or any person employed by a firm of
chartered accountants under section 177, accounts, documents and records
required to be maintained under section 174, or any other relevant
documents or evidence that may be required by him for the purpose of
making assessment of income and determination of tax due thereon,
the Commissioner may, based on any available information or material and to
the best of his judgement, make an assessment of the taxable income of the
person and the tax due thereon.
(2) As soon as possible after making an assessment under this section, the
Commissioner shall issue the assessment order to the taxpayer stating-
(a) the taxable income;
(b) the amount of tax due;
(c) the amount of tax paid, if any; and
(d) the time, place and manner of appealing the assessment order.
(3) An assessment order under this section shall only be issued within five years
after the end of the tax year or the income year to which it relates.
Section 121 substituted by Finance Ordinance, 2003 which previously read as follows:
121. Assessment of persons who have not furnished a return.-
(1) Where a person required by the Commissioner through a notice, to furnish a return of income for a tax year fails
to do so by the due date, the Commissioner may, based on any available information and to the best of the
Commissioner’s judgement, make an assessment of the taxable income of the person and the tax due thereon
for the year.
(2) As soon as possible after making an assessment under this section, the Commissioner shall issue, in writing, an
assessment order to the taxpayer stating –
(a) the taxable income of the taxpayer for the year;
(b) the amount of tax due;

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(c) the amount of tax paid, if any; and
(d) the time, place, and manner of appealing the assessment order.
(3) An assessment order shall only be issued within five years after the end of the tax year, or the income year, to
which it relates.
122. Amendment of assessments.-
(1) Subject to this section, the Commissioner may amend an assessment order treated as
issued under section 120 or issued under section 121, or issued under section 59, 59A,
62, 63 or 65 of the repealed Ordinance, by making such alterations or additions as the
Commissioner considers necessary (Words "to ensure that the taxpayer is liable for the correct amount of
tax for the tax year to which the assessment order relates" omitted by Finance Ordinance, 2003).
(2) An assessment order shall only be amended under subsection (1) within five years after
the Commissioner has issued or is treated as having issued the assessment order on the
taxpayer.
(3) Where a taxpayer furnishes a revised return under sub-section (6) of section 114 –
(a) the Commissioner shall be treated as having made an amended assessment of the
taxable income and tax payable thereon as set out in the revised return; and
(b) the taxpayer’s revised return shall be taken for all purposes of this Ordinance to be
an amended assessment order issued to the taxpayer by the Commissioner on the
day on which the revised return was furnished.
(4) Where an assessment order (hereinafter referred to as the “original assessment”) has
been amended under sub-section (1) or (3), the Commissioner may further amend, as
many times as may be necessary, the original assessment within the later of –
(a) five years after the Commissioner has issued or is treated as having issued the
original assessment order to the taxpayer; or
(b) one year after the Commissioner has issued or is treated as having
issued the amended assessment order to the taxpayer.
(4A) In respect of an assessment made under the repealed Ordinance, nothing contained in
sub-section (2) or, as the case may be, sub-section (4) shall be so construed as to have
extended or curtailed the time limit specified in section 65 of the aforesaid Ordinance in
respect of an assessment order passed under that section and the time-limit specified in
that section shall apply accordingly.
(5) An assessment order in respect of a tax year, or an assessment year, shall only be
amended under sub-section (1) and an amended assessment for that year shall only be
further amended under sub-section (4) where, on the basis of definite information
acquired from an audit or otherwise, the Commissioner is satisfied that –
(i) any income chargeable to tax has escaped assessment; or
(ii) total income has been under-assessed, or assessed at too low a rate, or has been
the subject of excessive relief or refund; or
(iii) any amount under a head of income has been mis-classified.

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Sub-section (5) substituted by Finance Act, 2003 which previously read as follows :
(5) An assessment order shall only be amended under sub-section (1) and an amended assessment shall only be
amended under subsection (4) where the Commissioner –
(a) is of the view that this Ordinance or the repealed Ordinance has been incorrectly applied in making the
assessment (including the misclassification of an amount under a head of income, incorrect payment of
tax with the return of income, an incorrect claim for tax relief or rebate, an incorrect claim for exemption
of any amount or an incorrect claim for a refund); or
(b) has definite information acquired from an audit or otherwise that the income has been concealed or
inaccurate particulars of income have been furnished or the assessment is otherwise incorrect.
(5A) Subject to sub-section (9), the Commissioner may amend , or further amend, an
assessment order, if he considers that the assessment order is erroneous in so far it is
prejudicial to the interest of revenue.
(5B) Any amended assessment order under sub-section (5A) may be passed within the time-
limit specified in sub-section (2) or sub-section (4), as the case may be.
(6) As soon as possible after making an amended assessment under sub-sections (1), sub-
section (4) or sub-section (5A) (Substituted for "subsection (1) or (4)" by Finance Act, 2003), the
Commissioner shall issue an amended assessment order to the taxpayer stating –
(a) the amended taxable income of the taxpayer;
(b) the amended amount of tax due;
(c) the amount of tax paid, if any; and
(d) the time, place, and manner of appealing the amended assessment.
(7) An amended assessment order shall be treated in all respects as an assessment order for
the purposes of this Ordinance, other than for the purposes of subsection (1).
(8) For the purposes of this section, “definite information” includes information on sales or
purchases of any goods made by the taxpayer, receipts of the taxpayer from services
rendered or any other receipts that may be chargeable to tax under this Ordinance, and
on the acquisition, possession or disposal of any money, asset, valuable article or
investment made or expenditure incurred by the taxpayer.
(9) No assessment shall be amended, or further amended, under this section unless the
taxpayer has been provided with an opportunity of being heard.
122A. Revision by the Commissioner.-
(1) The Commissioner may, suo moto, call for the record of any proceeding under this
0rinanance or under the repealed Ordinance in which an order has been passed by any
taxation officer other than the Commissioner (Appeals).
(2) Subject to sub-section (3), where, after making such inquiry as is necessary,
Commissioner considers that the order requires revision, the Commissioner may make
such revision to the order as the Commissioner deems fit.

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(3) An order under sub-section (2) shall not be prejudicial to the person to whom the order
relates.
(4) The Commissioner shall not revise any order under sub-section (2) if-
(a) an appeal against the order lies to the Commissioner (Appeals) or to the Appellate
Tribunal , the time within which such appeal may be made has not expired; or
(b) the order is pending in appeal before the Commissioner (Appeals) or has been made
the subject of an appeal to the Appellate Tribunal.
06
HEADS OF INCOME
INCOME FROM SALARY
INCOME FROM PROPERTY
INCOME FROM BUSINESS
CAPITAL GAIN
INCOME FROM OTHER SOURCE
07