IRFAN ULLAH, IRFAN TRADERS vs The COMMISSIONER INLAND REVENUE, UNIT-41, RANGE-1, (D

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

IRFAN ULLAH, IRFAN TRADERS VS The COMMISSIONER INLAND REVENUE, UNIT-41, RANGE-1, (D.I. KHAN ZONE), RTO, PESHAWAR Ss.39(3), 111, 122(5), 122(9) & 176(1)---Income from other sources---amount received as a loan/ advance from another person (not being a banking company)---Liability, declaring of---"Receivables"---Scope----Definite information---Receipt of the loan through banking channel, proof of---assessing Officer issued notice under S. 176(1) of the Ordinance, 2001 to the taxpayer requiring him to provide proof of receipt of the loan through banking channel---Taxpayer, through reply, explained / clarified that the declared liability was not a loan acquired but a liability owed to brothers as result of the family settlement about the distribution of inherited property---Taxpayer filed appeal before the appellate Tribunal Inland Revenue against amended assessment order---Validity---Record transpired that Department found the reply submitted by the appellant /taxpayer unsatisfactory, which was made the basis of issuance of notice under S. 122(9) show-causing the appellant / taxpayer about the intended addition of the declared liability in case the appellant /taxpayer failed to prove receipt of the liability through banking channel as required under S. 39(3) of the Ordinance, 2001---When the appellant / taxpayer informed the assessing Officer through his reply to notice under S. 176 that the said liability was in fact a liability having arisen as a result of family settlement about distribution of inherited property among brothers, it would have been in the fitness of things to subject this claim of the appellant taxpayer through verification by conducing audit under S. 177 in the case which, however, was not done and the assessing Officer then proceeded under S.122 read with S. 39(3) before further verifying or rebutting the claim of the appellant / taxpayer---Thus, no definite information had come into possession of the assessing Officer within the meaning of S.122(5) after the reply of the appellant/ taxpayer to the notice under S. 176 in the case and, therefore, the notice under S.122(9) was not in accordance with the law about what constitutes "definite information"---Thus, said aspect negated the finding and treatment of the assessing Officer---appellate Tribunal Inland Revenue set-aside impugned order finding that the assessing Officer had no definite Information within the meaning of S. 122(5) read with S. 39(3) and the notice under S. 122(9) and amendment order under Ss.122/39(3)/111 were without any lawful jurisdiction and cause---appeal, filed by taxpayer, was allowed, in circumstances. Ss.39(3), 111, 122(5), 122(9) & 176(1)---Income from other sources---amount received as a loan/ advance from another person (not being a banking company)---Liability, declaring of---"Receivables"---Scope----Definite information---Receipt of the loan through banking channel, proof of---Fishing inquiry by tax official---assessing Officer issued notice under S. 176(1) of the Ordinance, 2001 to the taxpayer a requiring him to provide proof of receipt of the loan through banking channel---Taxpayer, through reply, explained / clarified that the declared liability was not a loan acquired but a liability owed to brothers as result of the family settlement about the distribution of inherited property---Taxpayer filed appeal before the appellate Tribunal Inland Revenue against amended assessment order---Validity---Record showed that Department found the reply submitted by the appellant /taxpayer unsatisfactory, which was made the basis of issuance of notice under S. 122(9) show-causing the appellant / taxpayer about the intended addition of the declared liability in case the appellant / taxpayer failed to prove receipt of the liability through banking channel as required under S. 39(3) of the Ordinance, 2001---The only factor which had been made the basis of the amendment was the fact of the non-declaration of the said liability as "receivables" by the brother of the appellant /taxpayer in its wealth statement for the year---It was clear that before issuance of notice under S. 176(1) of the Ordinance, 2001 to the appellant /taxpayer, the assessing Officer was not certain and clear in his mind that the liability had been incurred by way of receipt of any loan during the tax year ;that was exactly why he felt the need to verify this through notice under S. 176 issued to the appellant / taxpayer---Had the assessing Officer been in possession of definite information about the receipt of loan otherwise than through banking channel, he would have not felt the need to issue notice under S. 176 and sought clarification and proof from the appellant / taxpayer in said regard---Thus, the notice under S. 176 was meant to engage in fishing inquiries from the taxpayer which was not allowed in the law---Thus, said aspect negated the finding and treatment of the assessing Officer---appellate Tribunal Inland Revenue set-aside impugned order finding that the assessing Officer had no definite Information within the meaning of S. 122(5) read with S. 39(3) and the notice S. 122(9) and amendment order under Ss.122/39(3)/111 were without any lawful jurisdiction and cause---appeal, filed by taxpayer, was allowed, in circumstances. Ss.39(3), 111, 122(5), 122(9) &176(1)---Income from other sources---amount received as a loan/ advance from another person (not being a banking company)---Liability, declaring of---Scope---"Receivables"---Scope----Definite information---Receipt of the loan through banking channel, proof of---assessing Officer issued notice under S. 176(1) of the Ordinance, 2001 to the taxpayer requiring him to provide proof of receipt of the loan through banking channel---Taxpayer through reply explained / clarified that the declared liability was not a loan acquired but a liability owed to brothers as result of the family settlement about the distribution of inherited property---Taxpayer filed appeal before the appellate Tribunal Inland Revenue against amended assessment order---Validity---Record transpired that Department found the reply submitted by the appellant /taxpayer unsatisfactory which was made the basis of issuance of notice under S.122(9) show-causing the appellant / taxpayer about the intended addition of the declared liability in case the appellant /taxpayer failed to prove receipt of the liability through banking channel as required under S.39(3) of the Ordinance, 2001---Before asking the appellant/ taxpayer to provide proof / receipt of the liability through banking channel , the assessing Officer had brought nothing on record to the effect that the said liability was amount of loan actually received during the year and not a liability having arisen as result of family settlement about distribution of inherited property ; when it was so, how could he ask the appellant to prove payment of the receipt through bank when the actual receipt of liability had not been proved by the assessing Officer nor declared by the appellant / taxpayer as such---The fact that the brother of the appellant/taxpayer had not declared the liability as receivable in his return did not prove the stance of the assessing Officer either because the same altogether negated the existence of any liability owned to him, what to talk of receipt of the same through banking channel---Thus, said aspect negated the finding and treatment of the assessing Officer---appellate Tribunal Inland Revenue set-aside impugned order, finding that the assessing Officer had no definite information within the meaning of S. 122(5) read with S. 39(3) and the notice under S.122(9) and amendment order under Ss. 122/39(3)/111 were without any lawful jurisdiction and cause---appeal, filed by taxpayer, was allowed, in circumstances.

IRFAN ULLAH, IRFAN TRADERS vs The COMMISSIONER INLAND REVENUE, UNIT-41, RANGE-1, (D — 2025 PTD 380 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN

Case information

Judgment text as reported

Other judgments reported in 2025 PTD