Receiving a notice from the Federal Board of Revenue (FBR) under the Income Tax Ordinance can be overwhelming. Understanding and responding to these notices promptly is crucial to avoid penalties and ensure compliance. Below is a brief guide for common notices issued under specific sections of the Ordinance:

Section 122 – Amendment of Assessments

Under this section, notices are issued to the taxpayer, involving the revising an assessment based on new information or errors in the original return. Generally, taxpayers are required to provide the documentation and clarify discrepancies to justify their declared income and tax liability.

Section 177 – Audit of Income Tax Affairs

Under this section, taxpayers are selected for Income tax audit, which requires them to furnish the requested records, including financial statements, invoices, and supporting documents, to verify the accuracy of their returns.

Section 111 – Unexplained Income or Assets

Under this section, notices are issued to taxpayers, involving questions regarding unexplained income or assets. Generally, taxpayers are required to explain the nature and source of the income and assets which might be declared or undeclared in the income tax return or wealth statement filed by the taxpayer.

Section 121 – Best Judgment Assessment

This section applies when a taxpayer fails to submit a return or provide complete records. The FBR estimates income and tax liability based on available information. Taxpayers should respond by filing the missing documents and clarifying the discrepancies.

Section 127 – Filing of Appeal Before the Commissioner (Appeals)

If a taxpayer disagrees with an order passed by the Federal Board of Revenue (FBR), he can file an appeal under Section 127 before the Commissioner Inland Revenue (Appeals). It is essential to submit a written application within the prescribed time frame, detailing the grounds of appeal and attaching supporting evidence to strengthen the case.

Section 131 – Filing of Appeal Before the Appellate Tribunal

If a taxpayer disagrees with the decision of the Federal Board of Revenue, they can escalate the matter to the Appellate Tribunal under Section 131. The appeal must include a detailed explanation of the disagreement, along with supporting documents, and be filed within the prescribed form and the time limit.