I.   BACKGROUND

This refers to the related Important TLQC 1211 of --------- about in trail, blue, italic and double line TO cannot seek information over 6 years even 174(3) in certain cases but can pass order u/s 177 - LHC

II.   UPDATED COMMENTARY – EXECUTIVE SUMMARY

Further to KQU ----- of --------, being an important matter, we would inform you about  ----------------- (Attachment 3125.1). in the ensuing paragraph, in Italic with emphasis in bold & Underline, heading ours for quick reading.

The SCP noted that if a case is subjudice before a legal forum then it is enough for proviso of Section 174(1) of the ITO, 2001, to kick in and dilute the effect of six-year timeframe till the matter is taken to its logical end under the law.

SCP set-aside the LHC order directing that the taxpayer shall not be required by the department to produce records, on account of lapse of statutory timeframe.

The SCP noted that a blanket cover was given to the taxpayer as far as retention of record is concerned. It said no doubt a timeframe is prescribed under the law; i.e., Section 174(1) for retaining the documents; however, it is supplemented by the proviso along with an explanation inserted by Finance Act, 2010, which say; “Provided that where any proceedings is pending before any authority or court the taxpayer shall maintain the record till final decision of the proceeding. “Explanation: Pending proceedings include proceedings for assessment or amendment of assessment, appeal, revision, reference, petition or prosecution and any proceedings before an Alternative Dispute Resolution Committee]”.

III.   DETAILS

A writ petition challenging a notice dated --------- issued by petitioners was challenged by the taxpayer on the count that it violates the findings and law laid down in ----------------

Lahore High Court allowed the petition however observed that proceeding of audit may continue but the taxpayer shall not be required by the department to produce record, on account of lapse of statutory timeframe prescribed to retain document in terms of section 174(1) of the ITO, 2001(hereinafter referred to as ‘the Ordinance’).

Notices were ordered in this CPLA whereas respondent chose not to appear and an ex-parte order was passed by this court on ---------- as under:

-------------------------------------------------

SCP heard the learned counsel for the petitioner and gone through the order, impugned before us. It seems that a blanket cover is given to the taxpayer as far as retention of record is concerned. No doubt a timeframe is prescribed under the law i.e. section 174(1) of the Ordinance for retaining the documents, however, it is supplemented by the proviso along with an explanation inserted by Finance Act, 2010. The proviso with explanation reads as under:

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IV.   FURTHER DETAILS & SERVICES

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Advisory, Statement or Return Filing or Review services, or related accounting matters like the above, please feel free to email Mr Amsal at amsal@786tax.com with CC to info.kasbati@professional-excellence.com. Your Goodself may continue to get other services from your current Tax & Legal Advisors.

Best regards for Here & Hereafter

Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner 

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc Quick Commentary Service Provider and High Level 440+ Tax & Levies Laws Consultants)