ZUBAIR KHAN vs COMMISSIONER INLAND REVENUE JHELUM ZONE Ss — 2024 PTD 1112 LAHORE-HIGH-COURT-LAHORE

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ZUBAIR KHAN VS COMMISSIONER INLAND REVENUE JHELUM ZONE Ss.111, 2(29), 122 & 133---Income chargeable to tax---Inclusion of unexplained income/assets---Proceedings under S.122 of Income Tax Ordinance, 2001, conducting of---Issuance of separate notice under S.111 of Income Tax Ordinance, 2001---Mandatory requirement---Question was whether or not, before invoking the provisions of S. 122 of Income Tax Ordinance, 2001 ('the Ordinance, 2001'), a separate notice to the taxpayer in terms of S. 111 of the Ordinance, 2001 was a pre-requisite to include unexplained income/assets in income chargeable to tax or / and whether or not, a notice under S. 122(9) of the Ordinance, 2001 is enough to initiate proceedings for amendment of the assessment ?---Show-Cause Notice under S. 122(9) of the Ordinance, 2001 was issued against the taxpayer on the basis of definite information that he purchased property during the relevant year but did not disclose its source, and subsequently an Assessment Order was passed following proceedings---Applicant (taxpayer) filed Reference Application as an Assessment Order passed against him was maintained up to Appellant Tribunal Inland Revenue---Case of the applicant was that the Respondents/Department was required to issue a separate notice under S. 111 of the Ordinance, 2001---Stance of the Respondents/Department was that there was no need to issue a separate notice under the aforesaid section for proceeding under S. 122 of the Ordinance, 2001---Held, that the issuance of a separate notice under S.111 of the Ordinance, 2001 is mandatory for the purpose of addition on account of unexplained income or assets---Prior separate notice under S. 111 of the Ordinance, 2001 to confront the taxpayer for explaining his unexplained income and assets has to be issued prior to making of addition of income for tax purposes---High Court answered the proposed question in affirmative i.e. against the Respondents/Department and in favour of the applicant/taxpayer---Consequently the impugned judgments were set-aside---Reference Application, filed by the taxpayer, was allowed, in circumstances.

ZUBAIR KHAN vs COMMISSIONER INLAND REVENUE JHELUM ZONE Ss — 2024 PTD 1112 LAHORE-HIGH-COURT-LAHORE

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