Islamabad: Section 214D of the Income Tax Ordinance, 2001, has been clarified by the Supreme Court (SC). The Commissioner of Inland Revenue in Lahore requested that a three-judge panel—Justice Munib Akhtar, Justice Shahid Waheed, and Justice Mussarat Hilali—rule on this statute. The appeal pertains to the tax year 2015, which was filed after the Income Tax Ordinance. The disagreement stemmed from a taxpayer named M/s Atta Cables (Pvt) Ltd, Lahore, who failed to file their taxes by the deadline in 2015.

According to the ruling, it said:

• The deadline for submitting tax returns was January 21, 2016.
• The taxpayers submitted a Section 119 request for a date extension.
• The Commissioner of Inland Revenue did not address the taxpayer’s appeal.
• The agency stated that Section D214 must be applied to the conflict above based on these three justifications.

Nevertheless, the taxpayer filed a writ petition at the Lahore High Court (LHC) to contest the case. Just one judge dissolved the petition. Due to the taxpayer’s intra-court appeal, the department was able to make its way to the highest court.

Read More: FBR: Taxpayers can Revise Returns within 60 Days

Applying Section D214, according to the ruling, demonstrates that forcing taxpayers to file their taxes by the deadline is an oppressive measure. Additionally, the respondent fell inside the purview of s: 177, the main audit-related clause in the Ordinance. Section 177’s audit requirements are explicit and impose a severe fine on the taxpayer.

It was also mentioned that the Federal Board of Revenue’s (FBR) and other statutory filters’ circulation are the exclusive basis for the audit selection process. These conditions, however, have given rise to a great deal of legal discussion and disagreements, and the courts have considered them on several occasions.

Furthermore, it was claimed that if the Commissioner granted the taxpayer an extension of time as sought under Section 119 and the taxpayer failed to comply, Section 214D would take effect. However, the taxpayer never answered the application.

The ruling also said that the Commissioner’s denial or approval of an extension under Subsection (3) of Section 119 has to be documented in writing for Section 214D to be correctly applied. In the absence of such, Section 214D would be considered pending.

“An implicit rejection or denial of the extension was not possible. This would essentially add a deeming fiction to Section 214D, meaning that if a “reasonable” amount of time elapsed and the Commissioner had not yet issued an order regarding the application under Section 119, the section would be assumed to apply.

Additionally, it was noted that applying a severe rule like 214D on a considered basis is unfair. The severity of the application is penal, even if it were to be implemented under the recovery and procedural procedures of the Ordinance.

Finally, it was stated that applying this clause to penalize the wrongdoers would not be just. The parts of it that are currently being discussed need to be strictly followed. Therefore, the provision would become relevant once a written response to the request for an extension was received.

Furthermore, the thirty days must be fulfilled not from the date the return is due to be filed but from when the Commissioner orders an extension. (If the Commissioner denied the extension in writing, the provision would take effect on the date of that order, although the taxpayer would still have the right to contest that decision.)

Therefore, we believed that Section 214D was not relevant in the particular facts and circumstances of this case. Thus, the LHC Division Bench firmly granted the writ petition.

You can also invest in other famous and most in demand housing societies, such as , Blue World City,  Rudn Enclave, 7 Wonders City Peshawar, Taj Residencia, Kingdom Valley,  New Metro City Gujar Khan, Forest Town Rawalpindi, University Town Rawalpindi, ICHS Town, Park View City Islamabad, Multi Gardens B17 Islamabad and Nova City Islamabad.

Al Sadat Marketing please contact 0331 1110005 or visit https://alsadatmarketing.com/

Few more real estate housing schemes which are trending now a days in Islamabad by including: Faisal Town Phase 2, Prism Town Gujar Khan, New City Paradise, Eighteen Islamabad, 7 Wonders City Islamabad, Capital Smart City,  Silver City Islamabad, The Life Residencia,  Faisal Town Islamabad, Islamabad Golf City, Islamabad Model Town and Marble Arch Enclave.

Al Sadat Marketing is an emerging Real Estate Agency headquartered in Islamabad, Pakistan. With over 10+ Years of experience, Al Sadat Marketing is providing its services and dealing all trending housing societies projects in different cities of Pakistan. Islamabad Projects, Rawalpindi Projects, Gujar Khan Projects, Burhan Projects, and Peshawar Projects etc.

Book Your Plot Now: +92 331 111 0005