Government of Pakistan
REVENUE DIVISION
Central Board of Revenue
***
C.No.
4(2)IT-Jud/97-Pt
Islamabad, March 28, 2000
Circular
No. 06 of 2000
(Income
Tax)
Sub Tax
Amnesty Scheme, 2000 – Clarification Regarding
The Board vide Circular No. 4 of 2000 dated
March 1, 2000 has released Tax Amnesty Scheme, 2000 ‘TAS, 2000’. Queries have
been made regarding treatment of undervalued assets or exempt income or assets
created out of exempt income etc. The position is explained as under. -
1. Undisclosed Income
The definition of ‘undisclosed income’ has
been given in paragraph-2 of the Scheme.
(a) As regards an asset where value has been
under-declared or undervalued, it is clarified that such an asset can be
declared under the Scheme. The amount suppressed to the extent of
under-declaration shall be recorded in the column relating to valuation in
Part-II of the declaration. However, the declarant must append a note with the
declaration indicating the real value and the value already declared, the
document in which it was declared (e.g., balance sheet or wealth statement) and
the assessment year for which it was declared.
(b) Exempt income
cannot be declared as on such income no income tax was payable. Similarly, an
asset created out of exempt income cannot be declared because the Scheme
relates to undisclosed income on which tax was chargeable but was not so
charged.
(c) ‘Undisclosed
income’ includes any notional or deemed income chargeable to tax under the
Income Tax Ordinance, 1979. However, in such a case the declarant shall append
a note to the declaration indicating the assessment year to which such income
relates and also the relevant provision of law under which such income was
liable to tax. However, if such notional or deemed income does not include
actual cash receipts, no asset or expenditure can be declared against such
income.
(d) Assets held
outside Pakistan can be declared if these have been created out of income which
was liable to tax but tax was not paid thereon. Similarly, expenditure incurred
outside Pakistan out of such income can also be declared. The declarant shall,
however, describe fully the particulars of such assets or expenditure. The
value of assets held outside Pakistan would be the actual cost of acquisition
of such assets.
(e) In the case of a
firm or an AOP, where the undisclosed income or assets created out of such
income, results in increase in the capital contribution of the partners or
members, as the case may be, the increase in capital can be declared only be
the individual partners/ members in their respective declarations.
f. If undisclosed income is utilized in purchase of an
asset, which has not yet been transferred in the name of the purchaser, such
undisclosed income can be declared by the purchaser, as advance money towards
purchase of such asset. However, if the law recognizes the purchaser as legal
owner of such asset, then he may declare the asset as such.
1. Payment of Tax
a. Tax payable under the Scheme can be paid through
challan/ bank draft or pay order as convenient to declarant. Payment by cheque
will not be accepted. The declaration is required to be accompanied by proof of
payment of tax.
b. The tax payable under Scheme can be adjusted against
the refund of income tax/ wealth tax already determined by the department where
no further verification in this regard is pending. The procedure in this regard
will be as under.-
i.
The declarant shall file
an application at least ten days before the date on which he wants to file the
declaration to the DCIT concerned and with one copy to the IAC concerned. In
the application, the declarant shall indicate the amount of refund due and the
relevant assessment year(s) to which the determined refund relates.
(ii) The DCIT shall
issue certificate (Annex-A) indicating the amount of refund due to the
declarant. The set off of adjustment of tax will be given when the original
certificate is enclosed with the declaration.
1. Incorporation of Undisclosed Income in Books of
Account
As regard,
incorporation of undisclosed income in the books of account, only that income
can be accounted for in books on which tax is paid in accordance with the
provisions of the Scheme. The declarant cannot account for that undisclosed income
on which the tax has not been fully paid. Likewise, the income of the rejected
declarations under Paragraph-10 of the Scheme cannot be accounted for in the
books.
2. Pending Proceedings
Assessments/
re-assessment not finalized up to March 1, 2000 will be treated as pending for
the purposes of TAS, 2000. However, the declaration filed under Scheme, will
not effect the pending proceedings. These will be finalized under the normal
law as provided thereof. No set off or credit for the undisclosed income as per
declaration will be given against the income assessed under the normal law.
3. Finality of Proceedings
The assessing officer concerned will make a
preliminary examination of all declarations to check mistakes/ deficiencies, if
any. If any mistake in calculation of tax or any other deficiency is noticed by
DCIT, he will issue a show cause notice on that point, with the prior approval
of Commissioner of Income Tax to the declarant requiring him to meet the
deficiency and explain his position within 30 days of the service of the said
notice. Examples of mistakes/ deficiencies are given below for illustration
purposes:-
i.
As per declared
undisclosed income, the tax payable comes to Rs 20,000 but due to oversight or
any other reason it has been recorded Rs 2,000 (but paid Rs 20,000). In such a
case, only intimation will be given to the declarant, and if there is no other
deficiency in the declaration, it will be accepted accordingly.
ii.
The covered area of an
immovable property recorded in the relevant column of Part-II of Declaration
Form is 3500 sq.ft. Its valuation as per Paragraph-12 of the Scheme comes to Rs
10,50,000 and tax thereon Rs 1,05,000. But either the valuation has not been
correctly done or tax is not correctly worked out.
iii.
Size of property ‘X’ is
500 sq. yards. The rate for the purposes of stamp duty on 30th day
of the relevant year of acquisition was Rs. 250 per sq. ft but the rate applied
by the declarant is less than the applicable rate.
iv.
Other deficiencies, such
as leaving blank any column of the Declaration Form, not recording make and
type or registration number of vehicle in the relevant column, or omission of
description of property or location or identification number of property.
If the mistakes or deficiencies as pointed
out in the show cause notice are found to be correct, the declarant shall file
a revised declaration correcting the mistakes or deficiencies.
1. Valuation of Assets
Valuation of Constructed Properties
As regards, the valuation of constructed
properties, it is required to be made separately (i.e., land and super
structure separately as provided in Paragraph-12 of the Scheme). In Part-II (E)
of the Declaration Form, the separate columns for ‘size of plot etc’ and
‘covered area’ have been provided. The total of valuation of these two (i.e.,
land + super structure) is to be recorded in the next column i.e., valuation as
per Paragraph-12 of the Scheme’.
Share/ Bonds & Proofs
Shares
The declarants are required to specify the
name of company, quantity of shares held, date of acquisition and value of
shares in the Part-II of the Declaration Form.
Bonds
In case of prize bonds, the total amount of
prize bonds and the date of acquisition will suffice, no proof is required to
be enclosed in this regard.
Agricultural Land & Industrial Properties
& Other Assets
a. As regards, the undisclosed agricultural land, it is
covered under the Scheme under the head ‘Other Assets’ and shall be valued as
provided in the Wealth Tax Rules, 1963.
b. As regards, the industrial properties (land/ building)
these to be valued on the same basis as applicable to the commercial properties
as laid down in Paragraph-12 of the Scheme.
Plant and Machinery
Initially, the declarants were required to
enclose the proof of purchase of plant and machinery. This requirement has been
relaxed, now the declarants are not required to enclose the proof of purchase
of machinery.
1. Filing of Declaration Form
·
The declarant is
required to fill all columns of the declaration form.
·
If the declarant is a
new assessee (not holding NTN), he is required to enclose an application form
for allotment of NTN with the declaration.
·
In case, the application
form (for allotment of NTN) is not filled in properly or its few particulars
are incomplete, or the required documents are not filed therewith, as the case
may be, the DCIT will issue a notice to the declarant, to furnish the required
documents or make-up the deficiency etc within specified time. If the declarant
fails to meet with any of the requirements specified in the notice, within
stipulated time, a final show cause notice shall be issued and properly served
upon the declarant. If he again fails to meet with any of the requirements of
the said notice, the declaration shall be rejected by the DCIT, with the prior
approval of the CIT.
·
If the space provided in
Part-I or Part-II of the declaration form falls short, the declarant may
enclose additional sheets to declare the details, however, all additional
sheets enclosed are required to be signed by the declarant and number of
enclosures will also be recorded on the face of the declaration.
·
Para (E) of Part-II of
the Declaration Form has been revised which is enclosed.
Encl As
above
(Ali Husnain)
Secretary
(IT-Judicial)
Annex-A
Certificate
It is certified that refund amounting to Rs.
______________________ for assessment year or years ___________________________
is payable to Mr. Mrs./ M/s ____________________________________ assess at
National Tax Number __________________________. He may adjust this refund
against the tax payable by him under Tax Amnesty Scheme, 2000.
Date: ____________
Signature ________________
Name of the
Officer________________
Official Seal/Stamp_______________
Officer’s Code No. ________________
(E) IMMOVABLE PROPERTY
|
Description of Property |
Location & Identification No. of property |
Income year in which acquired |
Commercial/ residential |
Size of Plot/ value as per Para 12 of the Scheme |
Covered area/ value as per Para 12 of the Scheme |
Valuation as per Para 12 of the Scheme |
Tax Paid |
|
1 |
2 |
3 |
4 |
5 |
6 |
Value of 5+6 |
8 |
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Government
of Pakistan
REVENUE
DIVISION
Central
Board of Revenue
. .
*
C.No. 4(2)IT-Jud/97-Pt Islamabad, March 28, 2000
Corrigendum
Sub Tax
Amnesty Scheme, 2000
In Board’s Circular No. 4 of 2000 dated March
1, 2000, in Part-II of the declaration form, the words, ‘as per rule No. 12’
shall be read ‘as per paragraph-12’.
(Ali
Husnain)
Secretary
(IT-Judicial)