FIRST MICRO FINANCE BANK LTD. vs FEDERATION OF PAKISTAN Ss — 2023 PTD 1095 ISLAMABAD

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FIRST MICRO FINANCE BANK LTD. VS FEDERATION OF PAKISTAN Ss.147 & 205---advance tax paid by the taxpayer---Default surcharge---Scope---Taxpayer has the right to file an estimate of the advance tax payable under S. 147(6) of the Income Tax Ordinance, 2001 and thereafter pay an amount that the taxpayer deems to be due in accordance with such estimate---Income Tax Ordinance, 2001 vests no authority in the taxation authorities to recover the amount that they deem to be due under S. 147 in contradiction of any tax estimate filed by the taxpayer under S. 147(6)---Scheme of the Income Tax Ordinance, 2001, is based on self assessment undertaken by the taxpayer---Income Tax Ordinance, 2001, vests power in taxation authorities to undertake reassessment of the tax return filed by a taxpayer in compliance with the provisions of the Ordinance and seek recovery of any non-payment or short payment on the basis of such reassessment---Section 147(6) also enables taxpayer to self-assess advance tax liability to the extent that such taxpayer estimates that the tax payable for the relevant tax year is likely to be less than the amount he is required to pay under S. 147(1)---In the event that the estimate filed by the taxpayer under S.147(6) is incorrect, a remedy is provided under S. 205 to impose a surcharge to the extent of short payment to penalize the taxpayer---This interpretation of law is further strengthened by the provisions of the Finance act, 2018, pursuant to which a proviso was added to section S. 147(6) of the Ordinance which provides taxation authorities with the authority erstwhile not extended i.e. to affect recovery if such authorities come to the conclusion that the estimate filed under S. 147(6) is misconceived.

FIRST MICRO FINANCE BANK LTD. vs FEDERATION OF PAKISTAN Ss — 2023 PTD 1095 ISLAMABAD

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