How to respond to an FBR notice

A notice from the FBR is not an accusation and it is not a demand. It is a step in a process that has a deadline, and the single thing that turns a manageable notice into an expensive one is letting that deadline pass.

First, find the section number

Every notice states the section it is issued under, printed near the top, usually as "u/s 114(4)" or "under section 122(9)".

That number tells you what the department wants, what your rights are, and how long you have. A notice under section 176 asks for information. A notice under section 122(9) proposes to increase your assessed income. They call for entirely different replies.

Our notice decoder explains the common sections in plain language, including the deadline and what happens if you do not reply.

Second, find the deadline

The notice states its own deadline, commonly fifteen or thirty days from the date of service.

Note the date of service, not the date you happened to read it. Notices are served electronically to your IRIS account, and the clock starts when it lands there. People who do not check IRIS often discover a notice with three days left on it.

If you need more time, an adjournment can be requested through IRIS, but the request must go in before the original date expires. After that the officer is entitled to proceed as though you chose not to reply.

Third, work out what is actually being asked

Read the notice for the specific transaction, amount or year it concerns. Most notices are narrow. A bank credit of a particular amount on a particular date, a property purchase, an expense claimed.

A reply that answers the actual query in two paragraphs with three documents attached is far stronger than a long letter about your general circumstances.

Fourth, gather the evidence before you write

For a question about funds, the answer is always documentary: the bank statement showing the credit, and the document showing where it came from. A sale deed, a loan agreement, a remittance advice, an inheritance document.

For a question about an expense, it is the invoice and the payment. For a question about withholding, it is the challan and the statement.

Assemble these first. Writing the reply before you have the documents produces a reply that promises evidence, which is the weakest possible position.

Fifth, file the reply through IRIS

The reply goes in electronically against the same reference number. A reply emailed to an officer or handed over at the counter is not on record, and when the file moves to another officer or to appeal, what is not on record did not happen.

Keep the acknowledgement.

When to get a practitioner involved

A notice asking for information you have can reasonably be answered yourself.

A notice that proposes to amend your assessment, imposes a penalty, or invokes section 111 on unexplained assets should not be. The reason is not complexity, it is that admissions made in an early reply are extremely difficult to withdraw later, and appeals are decided on the record you built at this stage.

Under Pakistani law, only a registered Income Tax Practitioner, an advocate, or a chartered accountant can represent you in these proceedings. An unregistered agent cannot appear for you, whatever they say.

What happens if you ignore it

The officer proceeds without you. For a failure to file, that means a best judgement assessment under section 121, where he estimates your income himself. That estimate is not a guess in your favour.

Once that order is passed and the appeal period expires, the demand is final and recoverable. The department can attach your bank account under section 140 and require your debtors to pay it instead of you. Recovering from that position is possible but far more expensive than a reply filed on time.