Main Sections
of section 233 (brokerage and Commission) or sub-section (The tax collected under
this section 2[and under section 235] shall be be a final tax on the income of a
CNG station arising from the consumption of the gas referred to in sub-section (1
There shall be collected advance tax at the rate specified in Division VIB of
Part III of the First Schedule on the amount of gas bill of a Compressed Natural
Gas station)
Explanation. For removal of doubt, it is clarified that for the purposes of this
section tax on income arising from consumption of gas referred to in
sub-section (3) means the tax collected under sub-section (1) which is inclusive of
sales tax and all incidental charges) of section 234A (CNG Stations)
shall furnish to the Commissioner a statement showing such particulars relating to
the persons income for the tax year in such form and verified in such
manner as may be prescribed.
(4A) Any person who, having furnished a statement, discovers any omission or wrong
statement therein, he may, without prejudice to any other liability which he may
incur under this Ordinance, furnish a revised statement for that tax year, at any
time within five years from the end of the financial year in which the
original statement was furnished.
(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.
120 Assessments
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 (Return)
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
conduct audit of the income tax affairs of a person under
section 177 (Audit) and all the provisions of that Section (117 Audit) 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 (Return).
(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 expiry of one hundred
and eighty days from the end of the financial year in which return was
furnished, and the provisions of sub-section (1) shall apply accordingly.
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
or
income of the person and the tax due thereon and the assessment, if any, treated to
have been made on the basis of return or revised return filed by the
taxpayer shall be of no legal effect.
(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.
shall be excluded.
140. Recovery of tax from persons holding money on behalf of a taxpayer. (1) For
the purpose of recovering any tax due by a taxpayer, the Commissioner may, by
notice, in writing, require any person
(a) owing or who may owe money to the taxpayer; or
(b) holding or who may hold money for, or on account of the taxpayer;
(c) holding or who may hold money on account of some other person for payment to
the taxpayer; or
(d) having authority of some other person to pay money to the taxpayer,
to pay to the Commissioner so much of the money as set out in the notice by the
date set out in the notice:
?Provided that the Commissioner shall not issue notice under this sub-section for
recovery of any tax due from a taxpayer if the said taxpayer has
filed an appeal under section 127 in respect of the order under which the tax
sought to be recovered has become
payable and the appeal has not been decided by the Commissioner (Appeals), subject
to the condition that twenty-five per cent of the said amount of tax due
has been paid by the taxpayer.]
(2) Subject to sub-section (3), the amount set out in a notice under sub-section
(1)
(a) where the amount of the money is equal to or less than the amount of tax due by
the taxpayer, shall not exceed the amount of the money; or
(b) in any other case, shall be so much of the money as is sufficient to pay the
amount of tax due by the taxpayer.
(3) Where a person is liable to make a series of payments (such as salary) to a
taxpayer, a notice under sub-section (1) may specify an amount to be paid out of
each payment until the amount of tax due by the taxpayer has been paid.
(4) The date for payment specified in a notice under sub-section (1) shall not be a
date before the money becomes payable to the taxpayer or held on the
taxpayers behalf.
(5) The provisions of sections (160 Payment of tax collected or deducted), (161
Failure to pay tax collected or deducted), (162 Recovery of tax from the person
from
whom tax was not collected or deducted) and (163 Recovery of amounts payable under
this Division), so far as may be, shall apply to an amount due under this section
as if the amount were required to be deducted from a payment under Division III of
Part V of this Chapter.
(6) Any person who has paid any amount in compliance with a notice under sub-
section (1) shall be treated as having paid such amount under the authority of the
taxpayer and the receipt of the Commissioner constitutes a good and sufficient
discharge of the liability of such person to the taxpayer to the extent of the
amount referred to in such receipt.
(10) In this section, "person" includes any Court, Tribunal or any other authority.
140 read with rule 69
149. Salary.
(1) Every person responsible for paying salary to an employee shall, at the time of
payment, deduct tax from the amount paid at the employees average rate of tax
computed at the rates specified in Division I of Part I of the First Schedule on
the estimated income of the employee chargeable under the head
Salary for the tax year in which the payment is made after making adjustment of tax
withheld from employee under other heads and tax credit admissible under
section (61 Charitable donations), (62 Tax credit for investment in shares and
insurance) and (63 Contribution to an Approved Pension Fund) during the
tax year after obtaining documentary evidence, as may be necessary, for
(i) tax withheld from the employee under this Ordinance during the tax year;
(ii) any excess deduction or deficiency arising out of any previous deduction; or
(iii) failure to make deduction during the year;
(2) The average rate of tax of an employee for a tax year for the purposes of sub-
section (1) shall be computed in accordance with the following formula, namely:
A/B
where
A is the tax that would be payable if the amount referred to in component B of the
formula were the employees taxable income for that year; and
B is the employees estimated income under the head ?Salary for that year.
(3) Notwithstanding anything contained in sub-sections (1) and (2), every person
responsible for making payment for directorship fee or fee for attending board
meeting or such fee by whatever name called, shall at the time of payment, deduct
tax at the rate of twenty percent of the gross amount payable.
(4) Tax deductible under sub-section (3) shall be adjustable.
162 Recovery of tax from the person from whom tax was not collected or dudcted
162. Recovery of tax from the person from whom tax was not collected or deducted.
(1) Where a person fails to collect tax as required under Division II (Advance Tax
Paid to a Collection Agent) of this Part V (Advance Tax and Deduction of Tax
at Source) or Chapter XII (Transitional Advance Tax Provisions) or deduct tax from
a payment as required under Division III (Deduction of Tax at Source)
of this Part V (Advance Tax and Deduction of Tax at Source) or Chapter XII
(Transitional Advance Tax Provisions), the Commissioner may pass an order to that
effect and recover the amount not collected or deducted from the person from whom
the tax should have been collected or to whom the payment was made.
(2) The recovery of tax under sub-section (1) does not absolve the person who
failed to deduct tax as required under Division III (Deduction of Tax at Source)
of this Part V (Advance Tax and Deduction of Tax at Source) or Chapter XII
(Transitional Advance Tax Provisions) from any other legal action
in relation to the failure, or from a charge of default surcharge or the
disallowance of a deduction for the expense to which the failure relates,
as provided for under this Ordinance.
165 Statements
165. Statements.
(1) Every person collecting tax under Division II of this Part V (Advance Tax and
Deduction of Tax
at Source) or Chapter XII (Transitional Advance Tax Provisions) or deducting tax
from a payment under Division III of this Part V (Advance Tax and Deduction of Tax
at Source) or Chapter XII (Transitional Advance Tax Provisions) shall, furnish to
the Commissioner a monthly statement in the prescribed form setting out
(a) the name, Computerized National Identity Card Number, National Tax Number and
address of each person from whom tax has been collected under Division II of this
Part V (Advance Tax and Deduction of Tax at Source)or Chapter XII (Transitional
Advance Tax Provisions) or to whom payments have been made from which tax has been
deducted under Division III of this Part V (Advance Tax and Deduction of Tax at
Source) or Chapter XII (Transitional Advance Tax Provisions) in each month;
(b) the total amount of payments made to a person from which tax has been deducted
under Division III of this Part V (Advance Tax and Deduction of Tax at Source) or
Chapter XII (Transitional Advance Tax Provisions) in each month;
(c) the total amount of tax collected from a person under Division II of this Part
V (Advance Tax and Deduction of Tax at Source) or
Chapter XII (Transitional Advance Tax Provisions) or deducted from payments made to
a person under Division III of this
Part V (Advance Tax and Deduction of Tax at Source) or
Chapter XII (Transitional Advance Tax Provisions) in each month; and
(d) such other particulars as may be prescribed:
Provided that every person as provided in sub-section (1) shall be required to file
withholding statement even where no withholding tax is collected or deducted
during the period.
Explanation. For the removal of doubt, it is clarified that this sub-section
overrides all conflicting provisions contained in the Protection of
Economic Reforms Act, 1992 (XII of 1992), the Banking Companies Ordinance, 1962
(LVII of 1962), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and
the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956),
if any, on the subject, in so far as divulgence of information under
section 165 is concerned.
(2) Every prescribed person collecting tax under Division II of this Part V
(Advance Tax and Deduction of Tax at Source) or
Chapter XII (Transitional Advance Tax Provisions) or deducting tax from payment
under Division III of this Part or
Chapter XII (Transitional Advance Tax Provisions) shall furnish or e-file
statements under sub-section (1) by the 15th day of the month following the month
to
which the withholding tax pertains.
(2A) Any person who, having furnished statement under sub-section (1) (1) or sub-
section (2), discovers any omission or wrong statement therein, may file a
revised statement within sixty days of filing of statement under sub-section (1) or
sub-section (2), as the case may be.
(3) Board may prescribe a statement requiring any person to furnish information in
respect of any transactions in the prescribed form and verified in the
prescribed manner.
(4) A person required to furnish a statement under sub-section (1), may apply in
writing, to the Commissioner for an extension of time to furnish the statement
after the due date and the Commissioner if satisfied that a reasonable cause exists
for non-furnishing of the statement by the due date may,
by an order in writing, grant the applicant an extension of time to furnish the
statement.
(5) The Board may make rules relating to electronic furnishing of statements under
this section including,-
(a) mandatory electronic filing of statements; and
(b) determination of eligibility of the data of such statements and e-
intermediaries, etc.
(6) Every person deducting tax from payment under section 149 (Salary) shall
furnish to the Commissioner an annual statement in the prescribed form and manner.
174. Records
174. Records.
(1) Unless otherwise authorised by the Commissioner, every taxpayer shall maintain
in Pakistan such accounts, documents and records as
may be prescribed.
(2) The Commissioner may disallow or reduce a taxpayers claim for a deduction if
the taxpayer is unable, without reasonable cause, to provide a receipt,
or other record or evidence of the transaction or circumstances giving rise to the
claim for the deduction.
(3) The accounts and documents required to be maintained under this section shall
be maintained for six years after the end of the tax year to which they relate
Provided that where any proceeding is pending before any authority or court the
taxpayer shall maintain the record till final decision of the proceedings.
Explanation. Pending proceedings include proceedings for assessment or amendment
of assessment, appeal, revision, reference, petition or prosecution and
any proceedings before an Alternative Dispute Resolution Committee.
(4) For the purpose of this section, the expression deduction means any amount
debited to trading account, manufacturing account, receipts and expenses account or
177. Audit.
(1) The Commissioner may call for any record or documents including books of
accounts maintained under this Ordinance or any there law for the time
being in force for conducting audit of the income tax affairs of the person and
where such record or documents have been kept on electronic data, the person
shall allow access to the Commissioner or the officer authorized by the
Commissioner for use of machine and software on which such data is kept and the
Commissioner or the officer may have access to the required information and data
and duly attested hard copies of such information or data for the
purpose of investigation and proceedings under this Ordinance in respect of such
person or any other person:
Provided that
(a) the Commissioner may, after recording reasons in writing call for record or
documents including books of accounts of the taxpayer; and
(b) the reasons shall be communicated to the taxpayer while calling record or
documents including books of accounts of the taxpayer:
Provided further that the Commissioner shall not call for record or documents of
the taxpayer after expiry of six years from the end of the tax year
to which they relate.
(2) After obtaining the record of a person under sub-section (1) or where necessary
record is not maintained, the Commissioner shall conduct an audit of
the income tax affairs (including examination of accounts and records, enquiry into
expenditure, assets and liabilities) of that person or any other person and
may call for such other information and documents as he may deem appropriate.
(6) After completion of the audit, the Commissioner may, if considered necessary,
after obtaining taxpayers explanation on all the issues raised in the audit,
amend the assessment under sub-section (1) or sub-section (4) of section 122
(Amended Assessment), as the case may be.
(7) The fact that a person has been audited in a year shall not preclude the person
from being audited again in the next and following years where there are
reasonable grounds for such audits.
(8) The Board may appoint a firm of Chartered Accountants as defined under the
Chartered Accountants Ordinance, 1961 (X of 1961) or a firm of
Cost and Management Accountants as defined under the Cost and Management
Accountants Act, 1966 (XIV of 1966), or a firm of Cost and Management Accountants
as
defined under the Cost and Management Accountants Act, 1966 (XIV of 1966) to
conduct an audit of the income tax affairs of any person or classes of persons
and the scope of such audit shall be as determined by the Board or the Commissioner
on a case to case basis.
(9) Any person employed by a firm referred to in sub-section (8) may be authorized
by the Commissioner, in writing, to exercise the powers in sections 175 (Power
to enter and search premises) and 176 (Notice to obtain information or evidence)
for the purposes of conducting an audit under that sub-section.
(10) Notwithstanding anything contained in sub-sections (2) and (6) where a person
fails to produce before the Commissioner or a firm of Chartered Accountants or
a firm of Cost and Management Accountants appointed by the Board or the
Commissioner under sub-section (8) to conduct an audit, any accounts, documents and
Rule 69:
69. Section 140 (Recovery) notice.-
A notice issued by the Commissioner under section 140 (Recovery) shall be in the
form specified in
Part IV (Collection and Deduction of Tax at Source) of the First Schedule
(Rates of Taxes, Advance Tax & Deduction at Source) to these rules.
SUPPORTING SECTIONS
4
[?Provided further that for tax year
5
[2018], the company shall furnish
irrevocable undertaking by November,
6
[2017], to present its accounts to the
Commissioner.) of
Part IV (Exemptions from Specific Provisions) of the Second Schedule (Exemptions
and Tax Concessions);
(a) tax deducted under clause (c) of sub-section (1) shall be adjustable if
payments are received by a public company listed on a
registered stock exchange in Pakistan, on account of execution of contracts;
(d) tax deducted under clause (c) of sub-section (1) in respect of a sportsperson
shall be final tax with effect from tax year 2013; and
(e) tax deducted under clause (b) of sub-section (1) by person making payments to
electronic and print media for advertising services shall be final tax
with effect from the 1st July, 2016.
(4) The Commissioner may, on application made by the recipient of a payment
referred to in sub-section (1) and after making such inquiry as the
Commissioner thinks fit, may allow in cases where tax deductible under sub-section
(1) is adjustable, by an order in writing, any person to make the payment,
(a) without deduction of tax; or
(b) deduction of tax at a reduced rate.
(4A) The Commissioner, on an application made by the recipient of a payment
referred to in clause (94) of Part IV (Exemption from Specific Provision) of the
Second Schedule (Exemptions and Tax Concessions), in cases where the said recipient
has fulfilled the conditions as specified in the said clause, by an order
in writing for a period of at least three months, may allow any person to make the
payment without deduction of tax in respect of payments as referred to in
clauses (b) of sub-section (1) of section 153 (Payment for goods, services and
contracts):
Provided that the recipient of the payment has made advance payment of tax equal to
two percent of the total turnover of the corresponding period of the
immediately preceding tax year.
(5) Sub-section (1) shall not apply to
(a) a sale of goods where the sale is made by the importer of the goods and tax
under section 148 (Imports) in respect of such goods has been paid and
the goods are sold in the same condition as they were when imported;
(b) payments made to traders of yarn by the taxpayers specified in the zero-rated
regime of sales tax (as provided under clause (45A) of
Part-IV (Exemption from Specific Provision) of the Second Schedule (Exemptions and
Tax Concessions));
(c) a refund of any security deposit;
(d) a payment made by the Federal Government, a Provincial Government or a Local
Government to a contractor for construction materials supplied to the
contractor by the said Government or the authority;
(f) the purchase of an asset under a lease and buy back agreement by a modaraba,
leasing company, banking company or financial institution; or
(g) any payment for securitization of receivables or issuance of sukuks by a
Special Purpose Vehicle to the Originator.
(6) Where any tax is deducted by a person making a payment for a Special Purpose
Vehicle, on behalf of the Originator, the tax is credited to the Originator.
(7) In this section,
(i) "prescribed person" means
(a) the Federal Government;
(b) a company;
(c) an association of persons constituted by, or under law;
(d) a non-profit organization;
(e) a foreign contractor or consultant;
(f) a consortium or joint venture;
(g) an exporter or an export house for the purpose of sub-section (2);
(h) an association of persons, having turnover of fifty million rupees or above in
tax year 2007 or in any subsequent tax year;
(i) an individual, having turnover of fifty million rupees or above in the tax year
2009 or in any subsequent year; or
(j) a person registered under the Sales Tax Act, 1990;
(ii) services includes the services of accountants, architects, dentists, doctors,
engineers, interior decorators and lawyers, otherwise than as an employee;
(iii) sale of goods includes a sale of goods for cash or on credit, whether under
written contract or not;
(iv) manufacturer means a person who is engaged in production or manufacturing of
goods, which includes
(a) any process in which an article singly or in combination with other articles,
material, components, is either converted into another distinct article or
product is so changed, transferred, or reshaped that it becomes capable of being
put to use differently or distinctly; or
(b) a process of assembling, mixing, cutting or preparation of goods in any other
manner; and
(v) turnover means
(a) the gross sales or gross receipts, inclusive of sales tax and federal excise
duty or any trade discounts shown on invoices, or bills, derived from the
sale of goods;
(b) the gross fees for the rendering of services for giving benefits including
commissions;
(c) the gross receipts from the execution of contracts; and
(d) the companys share of the amounts stated above of any association of persons
of which the company is a member.
153 (1) (b): for the rendering of or providing of services
153 (7) (j): a person registered under the Sales Tax Act, 1990