The email you receive from Iris will reference your tax year (3/4 years ago) and reference Section 122(5A).
Most taxpayers read the email twice and think the worst. The warning is understandable but it is not a tax demand. However, what you include in your response will determine whether it does.
This article will help you understand what a Section 122(5A) notice from FBR really means, what you can and can’t do and how to construct a watertight response.
What is Section 122(5A) of the Income Tax Ordinance?
When a taxpayer submits a complete tax return, it is deemed to be an assessment order by the Commissioner under Section 120. This means there is nothing done on the day.
However, under Section 122(5A), the Commissioner has the power to revise any deemed assessment, or any other assessment order, if he believes this is erroneous and prejudicial to the interest of revenue.
Two criteria must be met.
The order must be incorrect AND result in loss to the treasury.
The Appellate Tribunal Inland Revenue have said many times that if this weren’t the case, Section 122(5A) would become another audit power and Section 177 would be redundant.
Not a Fishing Licence
The Lahore High Court,, Rawalpindi Bench, was,was clear in February 2026 that Section 122(5A) is a clear power to revise errors, not to revisit assessments based on suspicion.
If the FBR has referred to external information such as bank or property details, it should do so under Section 122(5). You need a clear piece of information. You can highlight this in your response.
Time Limit
Generally, an assessment can only be revised within 5 years of the end of the financial year it was issued/deemed. Check the date on your note.
An opportunity to have your say
Section 122(9) prohibits adjusting an assessment unless the taxpayer is given a chance to be heard. This is why you’ll receive a show cause notice first.
Is it Automatic?
No, the Section 122(5A) notice relies on the Commissioner’s view of the order. The Commissioner needs to think it through.
In fact, the FBR does use its matching and risk algorithms to flag situations. But it must mention a particular fault. If it is generic, then there could be issues.
How to Find the Notice on the Iris FBR Portal
Do not just rely on the email. Log in to the Iris FBR portal.
- Log in to iris.FBR.gov.pk using your CNIC/NTN and password.
- Go to Inbox and click on Notices.
- Open the notice and read the contents and annexures.
- Take note of the notice number, tax year, section, issuing officer and compliance date.
- Download the PDF and store it.
Iris updates regularly, so the headings may differ slightly.
To respond to the notice, you can use the response option in the same notice. If the compliance deadline is too short, you may request a formal extension.
Common Reasons for a Section 122(5A) Notice
FBR Assessment Notice 122 cases are generally similar.
Wealth statement does not balance.
Your wealth has increased beyond the income and expenses you have declared. One of the most common causes of receiving a notification is an unbalanced wealth statement.
Unreported property sales
The FBR receive information from registrars and housing authorities. If you have not declared a property sale or capital gain, this will show.
No Withholding Tax Receipts
You claimed tax credits, but the FBR do not have a record to match this. This may lead to the FBR denying your tax credit and recovering the difference.
Income does not match.
Your income does not match between your bank, sales tax, or third-party information. Often business turnover is compared directly to sales tax.
Errors in Return
Sometimes the notice will highlight errors on your return. This can relate to incorrect tax rates, incorrect exemptions, non-admissible expenses, or not declaring minimum tax. These are typical 5A cases.
The first bullet points generally relate to external information, so as explained above, this can cause an issue with using Section 5A.
How to Respond to an FBR Amendment Notice
Responding to an FBR amendment notice correctly can be broken down into 3 stages. Missing any will weaken your file.
Stage 1: Analyse the Basis of Notice
Read through all the objections and list each of them individually. Include the amount.
Ensure they have a legal basis.
- Is it within the 5-year limit?
- Are they stating a real error or just suspicion?
- Have they mentioned how it prejudices revenue?
- Have they used information that should be within Section 122(5)?
If they raise any issues, put them at the top of your response.
Stage 2: Gather Evidence
Without evidence, you will lose the argument at the first hearing. Gather evidence for each objection.
- Bank Certificates and Statements for the tax year.
- Property Sales and Purchases. Include registry/transfer letter.
- Withholding Tax Certificates and Payment Challans.
- Pay Slip from Employer.
- Wealth Explanations. These could be gift deeds, loan agreements or inheritance arrangements.
- Audited/Management Accounts for businesses.
For each objection, you must provide evidence. Please label your attachments.
Step 3: Write Your Argument
A solid answer will have both a legal and numerical argument.
Legal Argument: Challenge the lack of jurisdiction. Mention both criteria. Highlight that it is outside the 5-year5-year limit, and that they don’t have the right to a proper hearing. Reference any tribunal/court decisions.
Numerical Argument: Answer each objection. Show your wealth balance by adding your income and receipts and subtracting your expenses.
Use a formal voice. Do not take any action without analysis. Do not bring up any new topics in your response.
What if I don’t reply?
If you do not respond to the notice, the officer may change your rating. This is usually much worse than the original proposal.
A Demand Notice will be issued under Section 137. Action can be taken to recover tax under Section 138, affecting your bank accounts.
Tax Penalty for Section 122(5A) Cases
The tax penalty for these cases will vary. You may be liable to pay the extra tax, default surcharge under Section 205, and,, if the officer claimsalleges concealment, a penalty under Section 182.
Appealing the Order
You can appeal to the Commissioner Inland Revenue (Appeals) under Section 127. This is generally within 30 days of receiving the order. A well-constructed response to the notice will give you a much better chance of success.
Can I Revise my Return?
Sometimes the officer will be correct and revising your return may be cheaper.
Rules for Revising Income Tax Returns (2026)
You can make changes to your return within 5 years of filing . Section 114 ( 6 ) . The rules are:
- If you revise your return within 60 days – No approval is required.
- If you revise your return after 60 days – Written approval from the Commissioner.
- If no decision is made within 60 days of requesting – Approval is given.
- You cannot revise your income to less than what has been set by any FBR order.
As the tax year will be old, you have missed the 60 day window. You will require approval.
Penalty Waiver
If you amend your return willingly before the FBR takes any action, you will not be levied a penalty under section 114(6A). . However you must pay the difference with default surcharge.
However, if a show cause notice has been issued under Section 122(9), you will be liable to 50% of the penalty. This is still better than paying the whole penalty for an amended order.
Amend or Defy?
If there is indeed a mistake and you can prove it, you should amend your return. However if the notice has legal issues or the numbers balance, you should defend.
Many files will require you to do both. You may want to concede on a small point and dispute the rest. This should be decided before uploading anything.
Receive a Litigation-Grade Response
A bad reaction is worse than no reaction at all. You will be admitting to things that you don’t need to and this will be used as the basis for the amended order. This will follow you into your appeal.
Our litigation team at TaxAccountant.pk (including Rana Asim, Advocate High Court) can draft responses to Section 122(5A) notices for businesses, salaried taxpayers and companies. We will analyse the notice for any jurisdictional issues, prepare your wealth statement and submit your response and attachments via Iris.
Upload your notice to us before the compliance date. The sooner we receive it, the more options we have.
