182(2) Notice for Failure to Furnish Return u/s 114: What to Do – Complete Guide for Taxpayers in Pakistan
Please refer to this office notice issued u/s 114(4) for filing of Income Tax return. In response to said notice; neither a return has been submitted nor has an adjournment been sought. Since, no compliance has been made by you on the due date without any reason.
This non-compliance on your part invokes provisions related to penalty u/s- 182(1) Sr. No. 1 of the Income Tax Ordinance, 2001 for non-filing of return of income u/s-114 of the Income Tax Ordinance, 2001, which is reproduced here under:
Offences:
Where any person fails to furnish a return of income as required under section 114 within the due date. Penalties:- Such person shall pay a penalty equal to 0.1% of the tax payable in respect of that tax year for each day of default subject to a maximum penalty of 50% of the tax payable provided that if the penalty worked out as aforesaid is less than 20 thousand rupees or no tax is payable for that tax year such person shall pay a penalty of forty thousand rupees. Section of the Ordinance to which offence has reference:- (114)
You are therefore show cause under section 182(2) of the Income Tax Ordinance, 2001 that as to why penalty of Rs.50,000/- u/s-182(2) may not be imposed upon you for non-compliance of section 114(4) of the Income Tax Ordinance, 2001. You are afforded an opportunity in pursuance of section 182(2) of the ordinance to furnish your reply along with supporting documents on or before the due date. Please note that in case of non-compliance or unsatisfactory reply penalty proceedings shall be finalized accordingly.
182(2) Notice for Failure to Furnish Return u/s 114
Receiving a notice under section 182(2) of the Income Tax Ordinance, 2001, for failure to furnish your income tax return as required under section 114 can be stressful and confusing.
Below we have explained what the notice means, why you received it, the penalties involved, and the step-by-step actions you should take to resolve the issue and avoid further complications.
Understanding the 182(2) Notice
A notice under section 182(2) is a formal communication from the Federal Board of Revenue (FBR) in Pakistan, informing you that you failed to file your income tax return by the due date as required under section 114 of the Income Tax Ordinance, 2001. This non-compliance is considered an offense and makes you liable to a penalty235.
Why Did You Receive This Notice?
You received the 182(2) notice because:
-
You did not file your income tax return for the relevant tax year within the prescribed deadline.
-
The FBR’s IRIS system automatically detected the default and generated the notice.
-
You may have missed the deadline due to oversight, misunderstanding, technical issues, personal emergencies, or deliberate non-compliance235.
Legal Provisions: Sections 114 and 182(2) Explained
Section 114: Requirement to File Return
Section 114 of the Income Tax Ordinance, 2001, specifies who must file a tax return, including individuals with taxable income, owners of certain assets, and those meeting specific financial thresholds7. If you fall into any of these categories, you are legally required to file your return by the due date.
Section 182(2): Penalty for Non-Filing
Section 182(2) empowers the FBR to impose penalties on individuals who fail to file their tax returns as required under section 114. The notice serves as a “show cause” opportunity for you to explain your non-compliance before the penalty is finalized235.
Penalties for Non-Filing: How Much Will You Pay?
The penalty for failing to file your income tax return is calculated as follows:
| Category | Penalty Calculation | Minimum Penalty | Maximum Penalty |
|---|---|---|---|
| General (Non-Salaried) | 0.1% of tax payable per day of default | Rs. 40,000 | 50% of tax payable or Rs. 40,000, whichever is higher78 |
| Salaried (Salary < Rs. 5 million) | Rs. 5,000 | Rs. 5,000 | – |
| Individuals with 75%+ salary income | Rs. 10,000 | Rs. 10,000 | – |
| All Others (Business, Self-Employed) | Rs. 50,000 | Rs. 50,000 | – |
| Flat Rate (Recent Years) | Rs. 1,000 per day of default | – | 200% of tax payable4 |
Important: The penalty will not exceed 200% of the tax payable for that tax year4.
What Should You Do After Receiving a 182(2) Notice?
1. Review the Notice Carefully
-
Confirm the tax year in question.
-
Note the deadline for your response.
2. File Your Income Tax Return Immediately
-
If you have not yet filed your return, do so as soon as possible. Late filing is better than non-filing and may reduce your penalty exposure7.
-
Use the FBR’s IRIS portal or consult a tax professional for assistance.
3. Prepare a Written Explanation (Reply to Show Cause)
-
Draft a formal response explaining the reasons for your late filing or non-filing.
-
If your tax liability was already deducted at source (e.g., salaried individuals), mention this to show that the government did not suffer a financial loss due to your delay23.
-
Attach any relevant supporting documents (e.g., evidence of deduction, proof of technical issues, medical emergencies).
4. Submit Your Response Before the Deadline
-
File your reply through the IRIS portal or as instructed in the notice.
-
Ensure your explanation and documents reach the FBR before the deadline to avoid automatic penalty imposition235.
5. Seek Professional Help if Needed
-
If you are unsure how to respond or calculate your penalty, consult a tax consultant or accountant specializing in Pakistani tax law.
Sample Table: Penalty Scenarios for Non-Filing
| Scenario | Daily Penalty | Minimum Penalty | Maximum Penalty |
|---|---|---|---|
| Non-salaried individual, tax payable | 0.1% of tax/day | Rs. 40,000 | 50% of tax payable |
| Salaried (< Rs. 5 million salary) | – | Rs. 5,000 | – |
| 75%+ salary income | – | Rs. 10,000 | – |
| Business/Other | – | Rs. 50,000 | 200% of tax payable478 |
Common Reasons for Missing the Filing Deadline
-
Forgetting the due date
-
Misunderstanding tax obligations
-
Technical issues with the FBR portal
-
Personal emergencies (illness, travel)
-
Lack of awareness about filing requirements
What Happens If You Ignore the Notice?
-
Failure to respond to the 182(2) notice will result in the automatic imposition of the penalty as indicated in the notice235.
-
Continued non-compliance can lead to further legal action, including prosecution and additional penalties.
Legal and Practical Tips to Avoid Future Notices
-
Mark tax deadlines on your calendar and set reminders.
-
Register your correct email and mobile number with FBR to receive timely notifications.
-
File your return even if you have no taxable income, if you fall under mandatory filing categories (e.g., property, vehicle ownership)7.
-
Consult a tax professional annually to ensure compliance.
Frequently Asked Questions (FAQ)
Q: Can I appeal the penalty imposed after 182(2) notice?
A: Yes, you can file an appeal with the Commissioner (Appeals) if you believe the penalty was wrongly imposed or excessive. Provide documentary evidence to support your case.
Q: What if my entire tax was already deducted at source?
A: Clearly mention this in your reply. While the penalty may still apply for late filing, the FBR may consider your situation more leniently23.
Q: Are there any exemptions from penalties?
A: Penalties may be reduced or waived in cases of genuine hardship, technical errors, or if you can prove that no tax loss occurred due to your delay. However, this is at the discretion of the tax authorities.
Conclusion
Receiving a notice under section 182(2) for failure to furnish your income tax return under section 114 is a serious matter but can be resolved efficiently by prompt action. File your overdue tax return immediately, respond to the FBR with a clear explanation and supporting documents, and seek professional help if needed. Timely compliance will help you avoid hefty penalties and future legal complications.