Got Notice u/s 11(1) read with section 26 and 33(1) of Sales Tax Act 1990 from FBR

Notice u/s 11(1) read with section 26 and 33(1) of Sales Tax Act 1990

SHOW CAUSE NOTICE NON-FILING OF MONTHLY SALES TAX RETURN(S)

Please refer to the subject cited above.

2. As per analysis of Sales Tax Profile data available with FBR’s E-Portal it has been observed
that you have not filed monthly sales tax return(s) for the tax period(s) 202010,xxx011 by the due date
establishing non-filing on your part. It is violation of Section 6, 7 & 26 of Sales Tax Act, 1990 read with
Sales Tax Rules, 2006 which attracts penalty of Rs.10,000/-under Section 33(1) of said Act, 1990 and
default surcharge under Section 34(1)(a) ibid. You are, therefore, requested to file the sales tax return(s)
through e-portal e.fbr.pk within five (15) days from the date of issuance of this notice along with the
penalty and the default surcharge due as per law.
3. Non-compliance on your part will lead this office to determine the minimum tax liability
under the provisions of Section 11(6) of Sales Tax Act, 1990 as per available record/information without
prejudice to any other action due as per law.
4. Please do not hesitate to contact the under-signed, if you have any query in this regard.
Assignment Date :
Due Date :
09-Mar-21
From :
Reminder Issued
NAME Compliance Date :
Assignment : 09-Mar-21
NAME (Commissioner Assistant / Deputy)
To :
My dear Taxpayer,
Reference Subject.
Vide this office earlier notice issued and as mentioned in the subject, you were apprized to file the Monthly Sales
Tax Return for Tax Year ……
2. Perusal of our electronic information reveals that so for you have failed to file your Sales Tax Return to the
subject mentioned notice. You are hereby provided another opportunity to make compliance of the said notice by………,
failing which it will be construed that you have nothing to offer in your defense hence further appropriate action under the
law shall be taken forthwith in accordance with the facts already shared with you.

A 11(1) Notice from the Federal Board of Revenue (FBR) refers to Section 11(1) of the Income Tax Ordinance, 2001, which is related to the assessment of income tax. This notice is typically issued by FBR in cases where there is an issue with your tax return or a need for further verification, investigation, or audit of your financial affairs.

What You Should Do Upon Receiving a 11(1) Notice:

1. Understand the Purpose of the Notice

Assessment of Income: Section 11(1) grants FBR the authority to assess the income and tax liability of a taxpayer if they have not filed a return, if there is any suspicion of tax evasion, or if the return filed is incomplete or inaccurate.
Request for Information: The notice may request additional information or documentation to verify the details of your tax return, or it could indicate that FBR has initiated an income tax assessment or audit.

2. Review the Notice Carefully

Reason for the Notice: The notice will specify the reason for the assessment or audit, such as:
- Non-filing of tax return.
- Failure to comply with tax obligations.
- Inconsistencies or discrepancies in the filed return.
Information Requested: The notice may outline specific information or documents that FBR requires. These may include income records, business transactions, invoices, bank statements, or other supporting documents to verify the details of your tax return.

3. Gather Required Documents

Prepare Your Records: Collect the documents and financial records requested by FBR. This could include:
- Income details (e.g., salary, business income).
- Bank statements or financial statements.
- Invoices or contracts if you are a business.
- Tax deduction certificates (if applicable).
- Any other documentation that supports your claims in the tax return.
Ensure Accuracy: Make sure that all documents are accurate and reflect your true financial position. Inaccurate or misleading information could lead to penalties or an audit.

4. Respond to the Notice

Timely Response: You must respond within the deadline specified in the notice. If no deadline is mentioned, FBR generally expects a prompt response.
Submit Documents: Submit the required documents or information through the FBR e-filing portal, or as instructed in the notice.
Clarifications: If you need to clarify any discrepancies or provide explanations for discrepancies in your tax return, do so clearly in your response.

5. File a Return if Required

File a Tax Return: If the notice is issued because you have not filed your return for a particular year, make sure to file your income tax return as soon as possible.
Correct Errors: If the notice is due to errors in your filed return, file an amended return with accurate information. This can be done via the FBR e-filing portal.
Pay Any Outstanding Tax: If your response or corrected return reveals that you owe taxes, make sure to pay the outstanding amount as soon as possible to avoid penalties and interest.

6. Seek Professional Assistance (if needed)

Consult a Tax Professional: If the information requested is complex or if you are unsure how to proceed, it may be beneficial to seek help from a tax consultant, chartered accountant, or tax lawyer. They can assist you in gathering the necessary documents, responding to the notice, and ensuring that your tax obligations are properly addressed.
Audit Risk: If the notice is part of an audit process, a tax professional can help you navigate the audit and ensure that you provide the correct information to FBR.

7. Pay Penalties and Interest (if applicable)

Penalties for Non-Compliance: If the notice indicates that you have failed to file your return or have provided inaccurate information, you may be subject to penalties and interest on the outstanding tax liability.
Settle Outstanding Tax Liabilities: If you owe any taxes as a result of the assessment or audit, pay the amount as soon as possible to minimize penalties and interest.

8. Monitor the Outcome

Confirm Submission: After you have submitted the required documents, check the status through the FBR e-filing system or directly follow up with the tax authorities to ensure that they have received and processed your response.
Final Decision: FBR will assess the information you provide and issue a final decision regarding your tax obligations. If there are any outstanding taxes or penalties, FBR will issue a demand for payment.

9. Prepare for Future Compliance

File Timely Returns: To avoid receiving notices in the future, make sure to file your tax returns on time and ensure they are complete and accurate.
Maintain Records: Keep thorough and accurate records of your income, expenses, and financial transactions throughout the year, so that your tax filings are always in compliance with the law.

Possible Outcomes:

Resolution: If you provide the requested documents or correct any issues, FBR may resolve the matter, and no further action will be taken.
Tax Assessment: If discrepancies or underreporting are found, FBR may issue a revised tax assessment and demand payment of any taxes due, along with interest and penalties.
Audit: If FBR is not satisfied with your response, the matter may be escalated to an audit.
Further Penalties: Failure to respond appropriately or on time could lead to penalties or additional legal action.

Conclusion:

A 11(1) Notice from FBR typically indicates a request for information or tax assessment due to issues with your filed tax return. To address the notice:

Gather and submit the required documents within the given time frame.
Correct any errors or file an amended return if necessary.
Seek professional advice if you are unsure about the process.
Ensure compliance to avoid penalties and future issues with FBR.

By addressing the issues raised in the notice promptly, you can ensure that your tax affairs are in good standing with FBR.

You can also read about Got 221(2) (Notice for rectification of mistake in assessment order) from FBR – What should you do? by click here.