SELF ASSESSMENT SCHEME FOR THE ASSESSMENT
15th June , 2002
C.No.7(7)S-Asstt/2002 In exercise of powers vested in the Central Board of Revenue under section 59 of the Income Tax Ordinance,1979 (hereinafter called the Ordinance), the following Self Assessment Scheme (SAS) is made for the assessment year 2002-2003 :-
1. SCOPE OF THE SCHEME:
1.1 All returns filed by tax-payers, other than those that are in-eligible under
(a) tax has been fully paid under section 54 of the Ordinance and proof of such payment is attached with the return;
(b) return of income for the assessment year 2002-2003 has been filed under section 55 of the Ordinance, within due date as defined in this Scheme;
(c) returns of Public Limited Companies quoted on stock exchange, where tax payable on the income declared is equal to or more than the tax payable on the income last declared or assessed, whichever is higher;
(d) returns of other Companies, where tax payable on the income declared is higher by ten percent (10%) or more compared to the tax payable on the income last declared or assessed, whichever is higher;
(e) returns of Registered Firms of Professionals not liable to pay Super Tax under clause (2B) of Para (A) of Part-IV of 1st Schedule to the Ordinance, where the tax computed, under Part-II of the 1st Schedule to the Ordinance, on income declared is higher by twenty percent (20% ) as compared to the similar tax computed on the income last declared or assessed, whichever is higher; and
(f) returns of Persons not being Companies or Registered Firms of Professionals, as indicated in sub-paras (c) (d) & (e) above, where tax payable on income declared is higher by twenty percent (20%) or more as compared to the tax payable on the income last declared or assessed, whichever is higher.
1.2 Returns filed by new taxpayers and persons deriving income from any other sources specified in section 15 of the Ordinance, shall also qualify for acceptance subject to the conditions specified in the Scheme.
The conditions regarding percentage increase in tax shall not be applicable if income consists of or includes salary and such income constitutes more than 50% of the total income declared for the year, or where income is derived only from house property.
i) For the purpose of Self Assessment Scheme, “Tax” includes surcharge but does not include additional tax/penalty.
ii) The comparison of tax shall be made with the tax payable excluding the amount deducted/ paid/ payable under sections 80B, 80C, 80CC and 80CD of the Ordinance.
iii) Where an existing assessee takes over the business of another existing assessee, the comparison of tax shall be made with the tax payable by the successor or the predecessor, whichever is the higher.
iv) “New taxpayer” means a person who has never filed a return or statement of income under the Ordinance, in the past or no assessment has ever been made in respect of his income.
(v) Where any person takes over the business of an existing assessee,” it would be a case of succession in business and the successor shall be taken to be an existing assessee, unless there is a change in the place or nature of business.
(vi) “Income last assessed” means the income for the latest year assessed immediately before the last date of filing of return by a taxpayer.
(vii) “Due date” means the date prescribed under sub-section (2) of section 55 of the Ordinance and includes the date extended by the CBR. “Due date”, however, does not include any extension beyond 15 days, granted by DCIT under sub-section (3) of section 55 of the Ordinance.
The following statements, accounts, details, documents and declarations are to be filed alongwith returns of income:
A) INCOME FROM BUSINESS OR PROFESSION:
(i) Where accounts are maintained:-
Copies of trading/manufacturing, profit and loss accounts, balance sheet of the business, receipt and expenditure statement, wherever applicable, depreciation chart as per Third Schedule to the Ordinance and personal accounts of the proprietor, members, partners or directors as the case may be, alongwith a declaration and details of the books of accounts and record maintained.
Where companies are required under the law to file copies of trading/manufacturing, profit & loss accounts and balance sheet certified by a Chartered Accountant, such copies are to be filed accordingly.
ii) Where accounts are not maintained:-
Where no accounts are maintained, Manufacturing and/or Trading Account(s) and Profit & Loss Account or Receipt and Expenditure statements on estimate basis.
B) INCOME FROM SALARY:
Salary certificate prescribed under the Income Tax Rules, 1982, showing salary, allowances, perquisites, or any other receipt and the amount of tax deducted at source.
C) INTEREST ON SECURITIES:
Evidence of payment of interest on money borrowed for investment in securities and of the commission if any paid for realizing interest on securities.
D) INCOME FROM HOUSE PROPERTY:
(i) Evidence for payment of provincial or local taxes on property, collection charges claimed if any, interest on capital borrowed for purposes of the property in question and any other admissible deductions claimed under the Ordinance.
(ii) Full particulars of the property/properties and its financing in cases where property income is declared for the first time.
(iii) Particulars of unadjustable advance rent or ‘Purgree‘, if any, received.
Wherever aggregate investment in new assets and properties exceeds Rs.5 lacs, sources of investment shall be declared and evidence attached with the return.
E) INCOME FROM OTHER SOURCES:
Description of nature and source of income as well as details of any expenses claimed alongwith necessary evidence.
F) NEW CASES:
(i) The requirements of return prescribed in paragraph 2 shall also apply mutatis mutandis to new taxpayers according to the respective category in which a case falls.
(ii) Wealth statement as on 30.6.2002 along with the sources of investment. Proof of investment, exceeding Rs. 5 lacs, shall be attached with the return.
(iii) A duly completed application form for issuance of National Tax Number shall also be filed.
3. WEALTH STATEMENT:
In cases of existing taxpayers, wealth statements alongwith reconciliation, shall accompany all returns of income where the income declared is Rs. 200,000/- (2 lacs) or more.
New taxpayers are, however, required to file wealth statements irrespective of the quantum of income declared.
4. DEDUCTIONS, REBATES AND TAX CREDITS:
Evidence of payments made on account of donations, or contributions to any approved institutions or funds and rebates and tax credits as admissible under the Ordinance, shall be attached with the return of income.
5. EXEMPT INCOME:
If any income is claimed to be exempt from tax, its computation and the basis of exemption shall be adduced to the return.
6. PURCHASE OF IMMOVABLE PROPERTY AND MOTORVEHILE:
The existing taxpayers, declaring income of less than Rs. 2 lacs and not filling the wealth statements, are required to declare and attach with returns the particulars of immovable properties and motor vehicles, purchased during the year. Note Legible copies of statements, accounts, certificate,details, documents and evidences as required in the foregoing paragraphs shall be filed alongwith the return.
7. RETURNS NOT ELIGIBLE:
Following returns shall not be eligible for acceptance and shall automatically be subjected to total audit:
i) All cases where loss has been declared.
ii) All cases where income has been arrived at by making a lumpsum addition.
iii) All cases of non-residents.
iv) All cases of modarbas and companies engaged in the banking and leasing business.
v) All cases, where a legal issue is pending in any appeal in respect of a previous assessment and the same issue exists in the current year, unless the appeal/reference is withdrawn either by the taxpayer or the Department, as the case may be, before the filing of return under the Scheme.
vi) All returns where there is evidence of concealment of income.
vi) All returns selected for total audit.
8. PROCESSING OF RETURNS FILED UNDER THE SCHEME:
(a) The assessing officer, will make initial scrutiny of the returns with respect to the provisions of Scheme to determine the acceptability thereof.
(b) In case of non-filing of documents as required by this Scheme, a notice shall be issued to the person indicating the deficiency to be made up within 15 days of the receipt of such notice.
(c) In cases of non-compliance within the time so allowed, the DCIT shall exclude the case from the SAS by passing a speaking order immediately but not later than fifteen days from the expiry of prescribed time.
9. SELECTION OF CASES FOR AUDIT:
(a) From amongst the returns filed under the Self Assessment Scheme (excluding salary and only property income cases), twenty percent (20%) returns may be selected for total audit in the following manner:-
i) through computer ballot which may be random or parametric, as deemed fit by C.B.R.
ii) By Regional Commissioners of Income Tax on the recommendations of Commissioners concerned, in the light of guidelines issued by the Central Board of Revenue in this behalf.
(b) Returns qualifying for self assessment shall be expeditiously processed either manually, or through computer, after the selection of cases for total audit. The assessing officer shall make necessary adjustments u/s 59(3) of the Ordinance, if so required, after giving a notice in writing to the assessee and considering his explanation, if any. These adjustments may include add-backs on account of:-
(i) expenses claimed which are legally inadmissible ;
(ii) any sum(s) deemed to be income under the Ordinance; and
(iii) adding agricultural income to the chargeable income for rate purposes in terms of Proviso to Clause (1) of Part-I of the Second Schedule to the Ordinance.
10. PROCESSING OF CASES SELECTED FOR AUDIT:
The cases selected for total audit, shall be scrutinized in detail, including field audit by departmental officers or by professional auditors authorized under section 4A of the Ordinance. The investigation and assessment proceedings shall be monitored and completed under guidance of supervisory officers within the meaning of section 7 of the Ordinance. Information collected from available sources shall be utilized for determining income of the taxpayer and tax payable thereon.