Question

(a) Anwar had filed his return of income for the tax year 2013 on 31 August 2013. Discuss the following in the light of provisions of the Income Tax Ordinance, 2001:
(i) By which date the Commissioner of Income Tax could make the first amendment of the assessment, if required. (02)
(ii) By which date any further amendment can be made if the first amendment was made on 15 February 2017. (02)
(b) On 1 December 2017 Bruce Lee was appointed by a Chinese company as a Technical Director for Pakistan. He has provided you the following details:
Arrival in Pakistan 15 December 2017
Joined office in Pakistan 20 December 2017
Visit to Dubai on an official trip 21-30 March 2018
Visit to South Korea for vacations 12-21 April 2018
Visit to northern areas of Pakistan for personal trip 4-9 June 2018
In view of the provisions of the Income tax Ordinance, 2001 and related Rules thereunder, comment on the residential status of Bruce Lee for the tax year 2018. (03)

(c) Under the provisions of the Income Tax Rules, 2002 list the records to be kept by a taxpayer in respect of his income from: (03)
(i) Salary (ii) Property (iii) capital gain

(kindly solve in the context of pakistan)

Answer 1

A)

i) Financial year will be 1^st July 2012 to 30^th June 2013.
   Assessment year will be 2013-2014

The commissioner of Income Tax could make the first amendment of the assessment, if required, within 5 years from the end of the financial year after the commissioner has issued or is treated as having issued the assessment order on the taxpayer.

So, the date will be on or before 30^th June 2018 within which Commissioner of Income Tax could make the first amendment.

ii) If 1^st amendment was made on 15^th February 2017, i.e. Financial year 2016-2017, then further amendment could be made within one year from the end of financial year in which the commissioner of Income Tax has issued the amended assessment order to the taxpayer

So, the date for further amendment will be on or before 30^th June 2018.

B)

An individual shall be treated as a resident if he satisfy the following two conditions, namely

a) is present in Pakistan for an aggregate period of 183 days or more in the tax year

b) is an employee or official of the Federal Government or Provincial Government posted abroad in the tax year.
In the case of Mr.Lee , date of arrival in Pakistan was 15^th December 2017.

No of days in December 2017 will be 17 days

No. of days in January 2018 will be    31 days

No of days in February 2018 will be    28 days

No. of days in March 2018 will be       21 days ( Visit to Dubai 21-30Mar-10 days)

No of days in April 2018 will be           18 days( Visit to S.Korea12-21Apr-12days)

No. of days in May 2018 will be           31 days

No. of days in June 2018 will be          30 days

Total stay in Pakistan during 2018 will be 176 days.

He is working in a Chinese Company.

As Mr. Lee’s could not fulfil both the conditions (a) and (b), he will be treated as Non-resident.

C) The Commissioner of Income tax may require any person to use electronic tax register of such type and description as may be required for the purpose of storing / accessing information regarding any sort of transaction that will have a bearing on the tax liability of such individual.