Order 3430212567583

122(5A) (Order to amend Original assessment prejudicial to revenue)
Name: MUHAMMAD ASIF KHAN Registration No 3430212567583

Address: 59/5, Sarfaraz Rafiqui Road, Lahore, Lahore Tax Year : 2019
Cantonement Period : 01-Jul-2018 - 30-Jun-2019
Medium : Online
Contact No: 00923004724064 Due Date : 25-Mar-2024
Document Date 26-Mar-2024
Description Code Amount

Demanded Income Tax 9204 223,690,888
Tax Chargeable 9200 224,236,662
Taxable Income 9100 773,734,567
Total Income 9000 774,109,567
This is not a valid evidence of being a "filer" for the purposes of clauses (23A) and (35C) of sections 2 and 181A.
ORDER U/S 122 (5A) OF THE INCOME TAX ORDINANCE 2001.

The taxpayer is an individual registered with FBR as service provider in the name and style of M/S Indus
Jute Mills Ltd. The taxpayer has filed return of income for tax year 2019 under section 114(1) of the
Income Tax Ordinance, 2001 declaring total income at Rs.375,000/- which was deemed to have been
assessed in terms of section 120(1) of the Income Tax Ordinance, 2001 (herein after referred to as “the
Ordinance” only). Subsequently, perusal of record revealed certain discrepancies due to which the
deemed assessment order u/s 120 was found to be erroneous in so far as prejudicial to the interest of
revenue, therefore, initially a show cause notice u/s 122(9) was issued to the taxpayer vide bar code No.
1000000171833789 dated 22.11.2023.
Service of Notices
The said notice was served through IRIS and UMS as well. The detail of service of further reminder notices
is as under:-
Sr. No. Date of issuance of notice Date of Service Mode of Service Remarks
1 22.11.2023 29.11.2023 IRIS/UMS Properly served upon the taxpayer
2 01.12.2023 11.12.2023 IRIS/UMS -do-
3 13.12.2023 20.12.2023 IRIS/UMS -do-
4 08.01.2024 17.01.2024 IRIS/UMS -do-
5 18.01.2024 22.01.2024 IRIS/UMS -do-
6 05.03.2024 12.03.2024 IRIS/UMS -do-
7 18.03.2024 25.03.2024 IRIS/UMS -do-
2. Opportunities of being Heard:-
The taxpayer was provided various opportunities of being heard. The detail is as under:
Sr . No. Number of Notice Date of Notice Compliance Date Delivered through
Remarks
1 1 22.11.2023 29.11.2023 IRIS/UMS No Compliance
4 4 22.12.2023 03.01.2023 IRIS/UMS Adjournment granted
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RTO LAHORE, TAX HOUSE SYED MAUJ E DARYA ROAD LAHORE

Medium : Online

It is evident that ample opportunity of being heard has been provided and all required merits in terms of
FBR Circular No. 7(2)Dt.14/94 dated 24/01/1994, No, 7(36)DT-14/94 dated 01/02/1994, No. 7(2)DT-14/94
dated 03/07/1994 and Honorable High Court decision 2012 PTD 964 have been fulfilled as far as
opportunity of being hearing is concerned. However, no compliance whatsoever has been made by the
taxpayer despite granting so many opportunities of being heard.
3. Documentation:
The taxpayer was confronted regarding Foreign income received through proper banking channel,
Agricultural Income, Investment on account of properties, Credit (Non-business)/payables, sale of
properties along with proper documentary evidence however neither any explanation has been submitted
nor any compliance of the statutory notices have been made till date 25.03.2024.
Under self-assessment scheme the declaration made by the taxpayer at the time of filing of income tax
return is deemed to have been assessed. Whatever is declared and claimed becomes assessment as
warranted. Under Articles 117 to 119 of the Qanoon-e-Shahadat Order, 1984 the taxpayer is under legal
obligation to prove, whenever questioned, that whatever has been declared and claimed is true and in
accordance with existing facts. For ease of reference said provisions are reproduced as under:
“117. Burden of proof: (1) whoever desires any Court to give judgment as to any legal right or liability
dependent on the existence of facts which he asserts, must prove that those facts exist.
(2) When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on
that person.…
118. On whom burden of proof lies: The burden of proof in a suit or proceeding lies on that person who
would fail if no evidence at all were given on either side.
119. Burden of proof as to particular fact: The burden of proof as to any particular fact lies on that person
who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact
shall lie on any particular person.”
It is important to mention though the said notice and reminders were sent through UMS (Pakistan Post) on
the declared address as warranted u/s 218, they were also issued through FBRs official system “IRIS”
which is also a valid service in terms of Section 218 (1)(d) of the Income Tax Ordinance, 2001. However,
persistent non-compliance to the notice and reminders by the taxpayer reflects the following:
a. He has no objection to the proposed treatment;
b. He wants to get benefit of his willful non-compliance at appellate stage.
It was taxpayer’s responsibility to discharge the burden of proof which he has failed to do. Same principle
has been upheld by the Superior judiciary. It is in this connection that the taxpayer was afforded
reasonable opportunity of being heard to discharge the burden of proof which the taxpayer has failed to
do.
In view of foregoing, this office is left with no alternative except to finalize the amendment proceedings on
the basis of available record in the manner here under:-
Issue No.1:-
On this issue the taxpayer was confronted in the following manner: -
“FOREIGN INCOME:


Medium : Online
Perusal of return of income for the tax year 2019 reveals that you have declared foreign income at Rs.
735,481,000/-. As warranted u/s 11(5) of the Income Tax Ordinance, 2001 taxable income of a resident
person is to be computed by taking into account Pakistan source income as well as Foreign Source income.
For ease of reference Section 11(5) is reproduced as under:-
“The income of a resident person under a head of income shall be computed by taking into account
amounts that are Pakistan-source income and amounts that are foreign-source income.”
However, foreign tax credit is admissible against tax liability as warranted u/s 103 of the Income Tax
Ordinance, 2001. For ease of reference said provision is also reproduced as under: -
Foreign tax credit. — (1) Where a resident taxpayer derives foreign source income chargeable to tax under
this Ordinance in respect of which the taxpayer has paid foreign income tax, the taxpayer shall be allowed
a tax credit of an amount equal to the lesser of –
(a) the foreign income tax paid; or
(b) the Pakistan tax payable in respect of the income.
In view of discussion supra, this office intends to treat the referred foreign income as income chargeable
to tax as discussed above and recover the due tax thereon. You are required to show cause why you
assessment may not be amended accordingly. However, credit of foreign tax in terms of section 103 of the
Income Tax Ordinance, 2001, would be allowable to the extent of payment, duly substantiated with
documentary evidences.”
Reply of the taxpayer:
As discussed in the preceding paras at length, no compliance has been made by the taxpayer despite
granting a handsome number of opportunities.
Findings:
The show cause notice along with subsequent reminders have remained uncompiled with despite proper
service of notice through IRIS/Pakistan Postal/UMS. although various opportunities have been granted
with proper service of notices through IRIS/UMS yet the taxpayer only kept on seeking adjournments
however despite granting various adjournments neither anybody attended the office nor any compliance
has been made whatsoever. Non-compliance on the part of the taxpayer clearly shows that the taxpayer
has nothing to say in his defense. Hence, default on the part of the taxpayer is established and the
referred amount Rs.735,481,000/- claimed as foreign income exempt from tax is charged to tax by
treating it as income from other sources u/s 39 of the Income Tax Ordinance, 2001.
Issue No.2:-
“Agricultural Income:
As per your return for the captioned tax year, you have shown an agricultural income of Rs.375,000/-.
However, no payment of agricultural tax to the provincial department is evident either from your return or
from the attachments in the e-folder with the e-filed return. You are required to submit your reply along
with following documents:
• Proof of agricultural tax paid in terms of Punjab Agricultural Income Tax Act.
• Ownership/registration deeds of Agricultural Property owned.
• Bank Statement of the Taxpayer for relevant period.
In case of non-provision of due payment of agricultural income tax this amount will be added into your


Medium : Online
income in terms of proviso of Section 111(1)(b) of the Income Tax Ordinance, 2001.”
Findings:
has nothing to say in his defense. Hence, default on the part of the taxpayer is established and accretion
in wealth during the year made on the basis of unexplained income amounting Rs.375,000/- claimed as
Agricultural income exempt from tax is added as concealed income u/s 111(1)(b) by treating it as income
from other sources u/s 39 of the Income Tax Ordinance, 2001 accordingly as confronted in the show cause
notice.
Issue No.3:-
“INVESTMENT ON ACCOUNT OF PROPERTIES:
Comparison of wealth statement for the tax year 2018 with wealth statement filed for tax year 2017
reveals that following new properties have been added during the year:
Assets Value
Commercial, Industrial, Residential Property (Non-Business) - Plot # C & M - 5-1/2 Acres, Hawksbay Road,
Karachi 0
Commercial, Industrial, Residential Property (Non-Business) - S-52A - Plot- 0.5 Acres, Site, Karachi 0
Commercial, Industrial, Residential Property (Non-Business) - Plot- 29 & 32 , 10 Acres - Scheme K-28,
Hawksbay Road, Karachi 0
Commercial, Industrial, Residential Property (Non-Business) - 30 Acres Land - Dhaibaji, District Thatta 0
However, verification made from IRIS web portal reveals that no tax has been made u/s 236K of income
tax ordinance, 2001.
You are requested to substantiate the value of investment on above properties with proper documentary
evidence (purchase deed of property alongwith evidence of payments) failing which further proceedings
for probing investment u/s 111 may be initiated as per law, and tax liability may under relevant provisions
of law may be charged and recovered accordingly.”
Findings:


Medium : Online
has nothing to say in his defense. Hence, default on the part of the taxpayer is established. As there is no
definite information available with the department for addition on this account, moreover accretion in
wealth utilized for addition in value of property has already been added as income chargeable to tax,
therefore, addition on this account is not warranted. Hence, dropped.
Issue No.4:-
“Credit (Non-Business) (Advance / Borrowing / Credit /Deposit / Loan / Mortgage / Overdraft / Payable):
In the Wealth statement for the year under consideration, you have shown “Credit (Non-Business)
(Advance / Borrowing / Credit / Deposit / Loan / Mortgage/ Overdraft/ Payable)” at Rs.38,253,567/-. The
receipt of Loan/payable/borrowing amount is to be in accordance with Section 39(3) of the Income Tax
Ord: 2001. Since no specific information is available regarding mode of Loan/payable/borrowing amount
received through normal banking channel from a person holding National Tax Number, it is therefore
requested to kindly furnish your explanation duly supported with documentary evidence for ascertaining
the legal requirements of the said payable in terms of section 39(3) of the Income Tax Ord: 2001. Please
note that in case of unsatisfactory explanation referred amount of Rs.31,688,901/- is liable to be added
into your taxable income u/s 39(3) of the Income Tax Ordinance, 2001 as income from other sources.”
Findings:
has nothing to say in his defense. Hence, default on the part of the taxpayer is established and the
referred amount of Rs.38,253,567/- claimed as credit (non-business) is added as taxable income by
treating it as income from other sources u/s 39 of the Income Tax Ordinance, 2001 accordingly as
confronted in the show cause notice.
Issue No.5:-
“Sale of Properties:
Comparison of wealth statement for the tax year 2019 with wealth statement filed for tax year 2018
reveals that below properties are appearing which has not been declared in the wealth statement for the
tax year 2019 which means that same has been disposed off during the tax year 2019 but neither any
capital gain has been declared during the year nor any capital gain tax has been paid.
Assets Value
Agricultural Property - 82 kanals 13 marlas, Hafizabad, Hafizabad, Hafizabad Hafizabad 2,286,375
Agricultural Property - 37.5 ACAR, HAFIZABAD, HAFIZABAD (50% share), Hafizabad Hafizabad 3,750,000
Commercial, Industrial, Residential Property (Non-Business) - 1100 sq feet, Super Market, Islamabad,


Medium : Online
Islamabad Islamabad Urban 1,000,000

Total 7,036,375
However, verification made from IRIS web portal reveals that no tax has been made u/s 37(1A) of income
tax ordinance, 2001.
You are requested to explain the same with proper documentary evidence (sale & purchase deed of
property alongwith evidence of payments) failing which tax on capital gain from sales of above properties
is liable to be charged and recovered @ 10% accordingly.”
Findings:
has nothing to say in his defense. Hence, default on the part of the taxpayer is established and capital
gain tax is charged accordingly as confronted in the show cause notice.
Amended as above. Issue copy of order and D.N. The taxpayer may file an appeal against this order in the
manner and within the time specified in Section 127 of the Income Tax Ordinance, 2001 to the
Commissioner Inland Revenue (Appeals), Lahore. Please Note that separate proceedings u/s 182 of the
Income Tax Ordinance, 2001 are being initiated for the concealment of Income u/s 111.
Receipts / Deductions
Amount
Exempt from Amount
Total
Description Code Tax / Subject Subject to
Amount
to Fixed / Normal Tax
Final Tax
Income / (Loss) from Other Sources 5000 773,734,567 0 773,734,567
Receipts from Other Sources 5029 773,734,567 0 773,734,567
Other Receipts 5028 773,734,567 0 773,734,567


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Foreign Sources
Amount
Exempt from Amount
Total
Amount
Final Tax
Foreign Income 6000 735,481,000 735,481,000 0
Agriculture
Amount
Exempt from Amount
Total
Amount
Final Tax
Agriculture Income 6100 375,000 0 375,000
Adjustable Tax
Receipts / Tax Collected Tax
Description Code
Value / Deducted Chargeable
Adjustable Tax 640000 0 545,774 0
Cash Withdrawal from Bank u/s 231A 64100101 0 336,875 0
Cash Withdrawal from Bank u/s 231A - Bank albaraka - Withholding tax 64100101 0 11,416 0
Cash Withdrawal from Bank u/s 231A - JS Bank - Withholding tax 64100101 0 325,459 0
Motor Vehicle Registration Fee u/s 231B(1) 64100301 0 10,000 0
Motor Vehicle Registration Fee u/s 231B(1) - LE 15-292 - Withholding tax 64100301 0 10,000 0
Electricity Bill of Domestic Consumer u/s 235A 64140101 0 188,497 0
Electricity Bill of Domestic Consumer u/s 235A - Electricity - Withholding tax 64140101 0 173,307 0
Electricity Bill of Domestic Consumer u/s 235A - Suigas - Withholding tax 64140101 0 15,190 0
Internet Bill u/s 236(1)(d) 64150005 0 10,402 0
Internet Bill u/s 236(1)(d) - Internet - Withholding tax 64150005 0 10,402 0
Final / Fixed / Minimum / Average / Relevant / Reduced Tax
Receipts / Tax Collected Tax
Description Code
Value / Deducted Chargeable
Final / Fixed / Minimum / Average / Relevant / Reduced Tax 640001 7,036,375 0 703,638
Capital Gains on Immovable Property u/s 37(1A) @10% 64220055 7,036,375 0 703,638


Medium : Online
Computations
Amount
Exempt from Amount
Total
Amount
Final Tax
Income / (Loss) from Other Sources 5000 773,734,567 0 773,734,567
Foreign Income 6000 735,481,000 735,481,000 0
Agriculture Income 6100 375,000 0 375,000
Total Income 9000 0 0 774,109,567
Taxable Income 9100 0 0 773,734,567
Tax Chargeable 9200 0 0 224,236,662
Normal Income Tax 920000 0 0 223,533,024
Final / Fixed / Minimum / Average / Relevant / Reduced Income Tax 920100 0 0 703,638
Withholding Income Tax 9201 0 545,774
Demanded Income Tax 9204 0 0 223,690,888
Attributes
Attribute Value
Decision Granted / Accepted
Iftikhar Masood Khan

Additional Commissioner
Inland Revenue, Range-II, Zone-III
RTO LAHORE, TAX HOUSE SYED MAUJ E DARYA ROAD
LAHORE


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Order 3430212567583

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122(5A) (Order to amend Original assessment prejudicial to revenue)

Name: MUHAMMAD ASIF KHAN Registration No 3430212567583

Document Date 26-Mar-2024

Description Code Amount

ORDER U/S 122 (5A) OF THE INCOME TAX ORDINANCE 2001.

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Name: MUHAMMAD ASIF KHAN Registration No 3430212567583

Document Date 26-Mar-2024

9 9 05.03.2024 12.03.2024 IRIS/UMS No Compliance

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Name: MUHAMMAD ASIF KHAN Registration No 3430212567583

Document Date 26-Mar-2024

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Name: MUHAMMAD ASIF KHAN Registration No 3430212567583

Document Date 26-Mar-2024

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Name: MUHAMMAD ASIF KHAN Registration No 3430212567583

Document Date 26-Mar-2024

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Name: MUHAMMAD ASIF KHAN Registration No 3430212567583

Document Date 26-Mar-2024

Islamabad Islamabad Urban 1,000,000

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Name: MUHAMMAD ASIF KHAN Registration No 3430212567583

Document Date 26-Mar-2024

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Name: MUHAMMAD ASIF KHAN Registration No 3430212567583

Document Date 26-Mar-2024

Iftikhar Masood Khan

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Name: MUHAMMAD ASIF KHAN Registration No 3430212567583

Document Date 26-Mar-2024

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