PTBP Web Desk
The Appellate Tribunal Inland Revenue (ATIR) has confirmed the importance of subsection (4) in the Income Tax Ordinance. This provision remains crucial as it allows multiple amendments within statutory timeframes, ensuring that tax assessments can be revisited and amended as needed.
It functions alongside the proviso to subsection (9), which serves as a safeguard, ensuring each amendment is completed efficiently and within the prescribed period. This interpretation affirms that both provisions can coexist, forming a comprehensive framework for amending tax assessments without redundancy.
In addressing Question D, the Tribunal clarified that if an amended assessment order is not issued within the timeframe set by subsection (9), the amendment process becomes time-barred, preventing the Commissioner from finalizing it. However, subsection (4) still allows for further amendments as long as they are initiated within the overall time limits and meet all requirements. This includes issuing a new show cause notice and adhering to subsequent time limits. This approach preserves the integrity of the tax assessment process, ensuring flexibility while maintaining due process and timely action.
For Question E, the Tribunal outlined the limitations for amendments initiated close to the end of the statutory period. If a show cause notice is issued just five days before the five-year expiration, the Commissioner has only those five days to issue the amended assessment order. The 180-day period in subsection (9) does not extend the overall limit set by subsection (2). Therefore, if the amended order is not issued within those five days, it is considered time-barred. This interpretation promotes certainty and finality in tax matters, reinforcing the need for amendments to be made within the substantive period allowed by law.
This landmark judgement by the ATIR provides much-needed clarity on the process of amending income tax assessments. It ensures that taxpayers are not subjected to prolonged uncertainty and compels the FBR to operate within the legal framework. The decision underlines the importance of issuing guidelines to assessing officers to ensure proper application of these statutory provisions, thereby minimizing unnecessary litigation.
Commenting on the judgement, tax lawyer Shahid Jami emphasized the need for the FBR’s legal wing to issue clear guidelines. He pointed out that such measures are essential to avoid unnecessary litigation on questions of law now clarified by the Tribunal.
