1. ASSESSMENT sec 120

2. SHAMROZE KHAN

3.  A charge imposed by government on the annual gains
of a person, corporation, or other taxable unit derived
through work, business pursuits, investments, property
dealings, and other sources determined in accordance
with the internal revenue code or state law.

4.  Sec(120) Assessments means ,Where a taxpayer has
furnished a complete return of income (other than a revised
return under sub-section (6) of section 114) for a tax year
ending on or after the 1st day of July, 2002,-
 the Commissioner shall be taken to have made an
assessment of taxable income for that tax year, and the
tax due thereon, equal to those respective amounts
specified in the return; and
 the return shall be taken for all purposes of this Ordinance
to be an assessment order issued to the taxpayer by the
Commissioner on the day the return was furnished.

5. Where the return of income furnished is not complete, the
Commissioner shall issue a notice to the taxpayer informing him
of the deficiencies (other than incorrect amount of tax payable
on taxable income, as specified in the return, or short payment
of tax payable) and directing him to provide such information,
particulars, statement or documents by such date specified in
the notice.
Where a taxpayer fails to fully comply, by the due date, with the
requirements of the notice under sub-section (3), the return
furnished shall be treated as an invalid return as if it had not
been furnished

6.  (1)Where a person fails to
 furnish a statement as required by a notice under sub-section (5) of section 115; or
 furnish a return as required under section 143 or section 144; or

 furnish the statement as required under section 116; or

 produce before the Commissioner, or any person employed by a firm of chartered
accountants 4[or a firm of cost and management accountants] under section 177, accounts,
documents and records required to be maintained under section 174, or any other relevant
document or evidence that may be required by him for the purpose of making assessment
of income and determination of tax due thereon,
 the Commissioner may, based on any available information or material and to the best of
his judgment, make an assessment of the taxable income 5[or income] of the person and
the tax due thereon.

 (2) As soon as possible after making an assessment under this section, the Commissioner
shall issue the assessment order to the taxpayer stating—

 the taxable income
 The amount of tax due

7.  The concept of Universal Self Assessment is embodied in
section 120 of the IncomeTax Ordinance, 2001. Accordingly,
all returns of income, other than the revised returns under
sub-section (6) of section114, filed for the tax year 2003
onwards shall be returns of Universal Self Assessment. In
view of clause (b) of section 120, a return qualifying for
acceptance under Universal Self Assessments shall be
deemed to be the assessment order made and issued by the
Commissioner on the date the return was furnished”.

8.  (1)Where a person required by the Commissioner through a notice] to
furnish a return of income for a tax year fails to do so by the due date, the
Commissioner may, based on any available information and to the best
of the Commissioner‘s judgment, make an assessment of the taxable
income of the person and the tax due thereon for the year.

 (2) As soon as possible after making an assessment under this section,
the Commissioner shall issue, in writing, an assessment order to the
taxpayer stating
 the taxable income of the taxpayer for the year;
 the amount of tax due;
 the amount of tax paid, if any; and
 the time, place, and manner of appealing the assessment order.

 (3) An assessment order shall only be issued within five years after the
end of the tax year, or the income year, to which it relates.

9. The Commissioner has power to amend an assessment by
making such alteration or additions as the Commissioner
considers necessary to ensure that the taxpayer is liable for
the correct amount of tax. An assessment order can only be
amended within five years from the end of the financial
year in which the Commissioner has issued or is treated as
having issued the original assessment order.
The Commissioner has power to make further amendments
as many times as may necessary within the later of
i) 5 years from the end of financial year
ii) 1 year from the end of the financial year in which
amendment was made

10. AMMAR BIN FAROOQ

11. Where a person does not produce accounts and records, or details of
expenditure, assets and liabilities or any other information required for the
purposes of audit under section 177, or does not file wealth statement under
section 116, the Commissioner may, based on any available information and
to the best of his judgment; make an amended assessment.
Subject to sub-section (9), the Commissioner may amend, or further amend,
an assessment order, if he considers that the assessment order is erroneous
in so far it is prejudicial to the interest of revenue.
Any amended assessment order under sub-section (5A) may be passed
within the time-limit specified in sub-section (2) or sub-section (4), as the
case may be.
The following points needs to be remembered for amended assessment:
1. An amended assessment order is to be treated in all respects as an
assessment order the purpose of this Ordinance, other than for the purposes
of sub-section(1) of section 122.

12.  Where in response to a notice under sub-section (3) or sub-section (4) of
section 114 a person fails to furnish return of income for any tax year, the
Commissioner may, based on any available information or material and to
the best of his judgment, make a provisional assessment of the taxable
income or income of the person and issue a provisional assessment order
specifying the taxable income or income assessed and the tax due thereon.
 Notwithstanding anything contained in this Ordinance, the provisional
assessment order completed under sub-section (1) shall be treated as the final
assessment order after the expiry of sixty days from the date of service of order
of provisional assessment and the provisions of this Ordinance shall apply
accordingly

13.  Where a concealed asset of any person is impounded by any
department or agency of the Federal Government or a Provincial
Government, the Commissioner may, at any time before issuing
any assessment order under section 121 or any amended
assessment order under section 122, issue to the person a
provisional assessment order or provisional amended assessment
order, as the case may be, for the last completed tax year of the
person taking into account the concealed asset.

 The Commissioner shall finalize a provisional assessment order or
a provisional amended assessment order as soon as practicable

 In this section, concealed asset means any property or asset
which, in the opinion of the Commissioner, was acquired from any
income subject to tax under this Ordinance

14.  Where the ownership of any property the income from
which is chargeable to tax under this Ordinance is in
dispute in any Civil Court in Pakistan, an assessment
order or amended assessment order in respect of such
income may be issued at any time within one year after
the end of the financial year in which the decision of the
Court is made.

15.  The production of an assessment order or a certified copy of an
assessment order shall be conclusive evidence of the due making of the
assessment and, except in proceedings relating to the assessment, that
the amount and all particulars of the assessment are correct.
 Any of assessment or other document purporting to be made, issued, or
executed under this Ordinance may not be
 (a) Quashed or deemed to be void or voidable for want of form; or

 (b) Affected by reason of any mistake, defect, or omission therein,
 if it is, in substance and effect, in conformity with this Ordinance and the
person assessed, or intended to be assessed or affected by the
document, is designated in it according to common understanding
 Rectification of mistakes sec 221

16. Point of
comparison
PAKISTAN INDIA
Types of Income 1. Salary
2. House Property
3. Business / Profession
4. Capital Gain
5. Other Sources
1. Salary
2. House Property
3. Business / Profession
4. Capital Gain
5. Other Sources
Types of
Assessment
1. Best Judgment Assessment,
Sec 121
2. Amendment of assessments ,
Sec 122
3. Provisional assessment ,Sec
122C
4. Assessment Of Persons Who
Have Not Furnished A Return ,
sec(121)
5. Self assessment
1. Sec 140 A – Self Assessment
2. Sec 143 (3) – Regular /
ScrutinyAssessment
3. Sec 144 – Best Judgment
Assessment
4. Sec 147 – Assessment /
Reassessment of Income
5. EscapingAssessment

17. Point of comparison PAKISTAN INDIA
Normal Procedure of
Taxation
The usual process ofT axation is:
1)The assessee earns income
2) He deposits
3)The assessee fils IncomeTax
Return (IT R)
The usual process ofTaxation
is:
1)The assessee earns income
2) He deposits tax – based on
self calculation – or as
determined by
hisT ax Consultant
3)T he assessee fils IncomeT
ax Return (IT R)
Assessee The ‘Person’ who is under
assessment is called the Assessee
The ‘Person’ who is under
assessment is called the
Assessee. The Person /
Assessee can be an Individual /
HUF / Firm / LLP / Cooperative
/ Company / AOP / BOI /
Artificial Juridical Person

18. Point of
comparison
PAKISTAN INDIA
Evidence of
assessment
The production of an assessment order
or a certified copy of an assessment
order shall be conclusive evidence of
the due making of the assessment and,
except in proceedings relating to the
assessment, that the amount and all
particulars of the assessment are
correct.
The production of an
assessment order or a
certified copy of an
assessment order shall be
conclusive evidence of the due
making of the assessment
and, except in proceedings
relating to the assessment,
that the amount and all
particulars of the assessment
are correct.

19. SAAD ALI

20.  SINDH HIGH COURT
 Before AqeelAhmed Abbasi and Sadiq
Hussain Bhatti, JJ
 AminuddinAnsari for Applicant. Amjad
Jawaid Hashmi for Respondent.
 Messrs KURDISTANTRADING COMPANY
(Partnership, firm) through Authorized
Attorney

21.  AQEEL AHMED ABBASI, J.---
Being aggrieved and dissatisfied with the order dated 30-10-
2009 passed by the Income Tax Appellate Tribunal in I.T.A. No.281/KB/2008 (Tax Year 2004),
whereby the appeal filed by the applicant was dismissed. The applicant has filed immediat
e Reference Application under section 133(1) of Income Tax Ordinance, 2001 and has wishe
d-
for the following two questions of law, which according to learned counsel for the applicant
arise from the impugned order passed by the Tribunal and require authoritative pronounce
ment by this Court
 (a) Whether in terms of section 133(2A) of the Income Tax Ordinance,2001
on the date of hearing of appeal on 10-10-
2009 when more than six months had gone since the filing of appeal on 12-4-
2008; the Appellate Tribunal ceased to have jurisdiction to hear and decide th
e appeal and the relief wanted in the grounds of appeal by the appellant/tax
payer shall be deemed to have been allowed to the tax payer?
(b) Whether clause 3A of Part IV of the Second Schedule to the Income Ta
x Ordinance, 2001 inserted through Finance Act, 2004, is in the nature of corr
ect/beneficial legislation and is applicable to tax year 2004 and the applicant/
tax payer is entitled for exemption claimed?

22.  Brief facts as recorded by the Appellate Tribunal and stated by the learne
d advice for the applicant in the instant reference application are that the
taxpayer filed return of income for tax year 2004 declaring income of Rs.
814,064. The assessment was deemed to have been finalized under the p
rovisions of section 120 of the Income Tax Ordinance, 2001. The Addition
al Commissioner of Income Tax found the deemed assessment wrong in s
o far as damaging to the interest of revenue and he issued show-
cause notice to the taxpayer as under:--
"On examination of your case record for the Tax Year 2004 open th
at you have declared income from score amounting to Rs.42,766,374 and
claimed its exemption under State Bank of Pakistan, Circ0ular No.29 of 2
002. The exemption claimed under State Bank of Pakistan, Circular is not
allowable under Income Tax Ordinance and same is to be disallowed und
er section 70 of Income Tax Ordinance, 2001 and mark up is be treated an
d taxed income from business.“
 The explanation furnished was not found satisfactory by the taxpayer,

23.  Learned advocate for the applicant has pressed question No. 2 only whic
h according to learned advocate is a important question of law which aris
es from the order passed by the learned tribunal in the instant case. Whil
e giving the brief history of the case, it has been contended by learned co
unsel that for the tax year 2004 the applicant could not file return of inco
me within due date i.e. 30th September 2004
 on the other
hand, learned advocate for the respondent has controverted the submissions
made by the learned advocate for the applicant and has supported the impu
gned order passed by the Income Tax Appellate Tribunal in the instant case. I
t has been contended by the learned advocate for the respondent that on the
expiry of last date for filing of return for the tax year 2004 i.e. 30th Septembe
r 2004, the matter became past and closed transaction for the tax year 2004,
whereas the applicant was required to furnish the return of total income keep
ing in view the provision of law as existed on the closing date of the tax year i.
e. 30th June 2004

24.  We have heard both the learned counsel and perused the record. S
ince the learned counsel for the applicant has pressed question No
.2 only which relates to prospective or retrospective application of
Clause (3A) of Part-
IV of the Second Schedule, therefore, will be advantageous to repr
oduce the provision of Clause (3A) of Part IV of the Second Sched
ule, section 34 and section 70 of the Income Tax Ordinance, 2001
. If we may examine the provision of Clause 3A of Part IV of the Sec
ond Schedule to the Income Tax Ordinance, 2001, it can be seen th
at the said provisions are remedial and beneficial in nature as certa
in relief has been given to the tax payers by excluding its benefit d
erived by way of waiver of profit and debt or the debt itself, from t
he chargeability to tax

25.  In view of hereinabove facts and by applying the ratio of afore cite
d judgments, we are of the opinion that the Provision of Clause (3
A) of Part IV of the Second Schedule of Income Tax Ordinance, 200
1 inserted through Finance Act, 2004 are remedial and beneficial i
n nature, hence will apply retrospectively, whereas its benefit may
also be extended to the case of the present applicant for the tax ye
ar 2004, which was pending and not finalized in terms of section 1
20(1) of the Income Tax Ordinance, 2001. Accordingly, instant refe
rence application is allowed and the question No.2 as proposed he
reinabove through instant reference application is answered in affi
rmative in favour of the applicant. Since the learned counsel for th
e applicant has not pressed question No.1 nor advanced any argu
ments in this regard, therefore, we would not answer such questio
n, which otherwise, appears to be a question of law.

26. Conclusion