AAJ TV : Pakistan Ki Awaz

ISLAMABAD : The Federal Board of Revenue (FBR) has made it mandatory for non-filers of income tax returns to submit wealth statements, wealth reconciliation statements, and explanation of source of assets, in response to notices of provisional assessment under section 122C of the Income Tax Ordinance 2001.

Sources told Business Recorder on Tuesday that the explanatory circular of Finance Amendment Ordinance 2009 has clarified the procedure of provisional assessment under section 122C of the Ordinance 2001. The income tax return of the non-filer would be invalid in cases where the wealth statement, wealth reconciliation statement and source of assets have not been submitted along with the return within 60 days period.

According to an income tax circular, the newly added provisions of sub-sections (1) and (2) of section 122C in the Ordinance 2001 are aimed at facilitation of a taxpayer where he fails to file return of income in response to requisition of the same by the Department.

Under the new scheme of provisional assessment, in such cases of non-compliance, option shall be vested with the taxpayer even after finalisation of (best judgement provisional assessment) to file a return within a period of sixty days of the service of demand notice resulting from provisional assessment.

Such provisional assessment shall cease to have any legal effect if the taxpayer files return of income alongwith wealth statement, wealth reconciliation statement and other required documents, within a period of 60 days from the date of service of provisional assessment order. However, a return filed in response to provisional assessment shall be valid only if accompanied with wealth statement, wealth reconciliation statement and explanation regarding sources of assets in question.

However, if the taxpayer fails to file return of income even after a period of sixty days of receipt of the demand notice resulting from a best judgment provisional assessment, such assessment shall attain finality on completion of a period of sixty days from the date of service of assessment order.

Through insertion of a proviso to sub-section (2) of section 137 of Ordinance 2001, 60 days time period, starting from the date of service of notice has been prescribed for payment of tax demand resulting from a provisional assessment, the circular added.

Copyright Business Recorder, 2010