Adv Azam Saudagar

10/05/2026

28/04/2026

The Lahore High Court held that tax authorities cannot go beyond the scope of the show cause notice (SCN) while making assessments. In this case, the taxpayer was charged with sales suppression based on a difference between income tax and sales tax declarations. However, the Court observed that the authorities relied on assumptions without properly establishing that the alleged sales were taxable under the Sales Tax Act, 1990. It was further noted that the Appellate Tribunal failed to issue a reasoned (speaking) order as required by law. The Court emphasized that any new grounds or facts arising after the taxpayer’s reply must be addressed through a fresh or supplementary SCN; otherwise, it violates principles of natural justice. Since the authorities exceeded the SCN scope and the Tribunal passed a non-speaking order, the decision was declared legally unsustainable. Consequently, the case was decided in favor of the taxpayer and against the tax department.

18/04/2026

Tax on social media income ゚

10/04/2026

The Appellate Tribunal Inland Revenue, Multan, decided a case involving a tax demand of Rs. 19.5 million raised against Mst. Nargis Mumtaz for Tax Year 2016. The taxpayer had passed away on 11 June 2020, yet the tax authorities issued notices and passed an ex-parte assessment order in June 2022 without involving her legal heirs. The legal heir challenged the order, contending that proceedings against a deceased person are illegal and void, as proper notices must be served to the legal heirs. The Tribunal observed that the assessing officer failed to follow due legal procedure by continuing proceedings against a dead person, which constitutes a fundamental legal defect. Relying on settled law and judicial precedents, the Tribunal held that no tax liability can be created or enforced against a deceased individual and that any such proceedings are void ab initio. Consequently, the impugned assessment order was annulled, and the appeal was allowed. However, the Tribunal clarified that the tax department may initiate fresh proceedings against the legal heirs, if permissible under the law.

08/04/2026

No tax on Foreign remittance ゚

04/04/2026

In this case, Supreme Court of Pakistan granted pre-arrest bail to Shahid Chaudhry in a case registered under the Anti-Money Laundering Act, 2010 and Income Tax Ordinance, 2001.
The allegation was that during Tax Years 2017 and 2018, the petitioner declared limited income in his tax returns, but very large amounts were found in his bank accounts. Based on this difference, authorities alleged concealment of income, tax evasion, and money laundering.
However, the Court observed that before filing an FIR for tax evasion or money laundering, tax liability must first be properly determined through tax assessment proceedings under the Income Tax Ordinance. Since no proper assessment had been completed before registration of the FIR, the Court held that the criminal case was prima facie contrary to law and against the principle already settled in Taj International case (PLD 2025 SC 633).
The Court also noted that later the tax liability had already been annulled by the Appellate Tribunal Inland Revenue (ATIR), which further weakened the prosecution case. Since the evidence was mainly documentary (tax record and bank statements), the Court found that arrest was unnecessary and confirmed pre-arrest bail.

04/04/2026

FBR introduces a new taxation procedure for resident persons earning income from social media content in Pakistan. It applies to individuals receiving income from platforms such as YouTube and other monetized social media platforms.

Under the draft rules, taxable income will be calculated by taking total remuneration received from social media content and deducting allowable expenses up to 30% of total revenue. Total remuneration will be considered as the higher of actual income received or income calculated using revenue per 1,000 views (RPM), average views, and total number of posts. For this purpose, RPM has been fixed at PKR 195 per 1,000 views.

The rules also require quarterly advance tax payment under section 147 of the Income Tax Ordinance, 2001. Social media income must be declared separately in the annual tax return, and if declared income is lower than the prescribed formula, the tax authority may revise the return and recover additional tax.

01/04/2026

Circular No. 07 of 2025–26 to clarify the applicability of withholding tax under section 236C of the Income Tax Ordinance, 2001 for builders and developers covered under section 7F. Under section 7F, certain builders and developers are taxed under a special regime where income is calculated as a fixed percentage of gross receipts instead of normal business profit. The circular explains that tax collected under section 236C usually adjusts against capital gains tax, but since income under section 7F is treated as business income, such adjustment may not be possible, creating unnecessary cash flow pressure for taxpayers. Therefore, taxpayers who have fully discharged tax under section 7F and have no other taxable income may apply to the concerned Commissioner Inland Revenue under section 159 for an exemption certificate to avoid advance tax collection under section 236C. Commissioners are instructed to review each application carefully and issue decisions according to law within prescribed timelines.

26/01/2026