The FBR has defended its decision to recover Rs. 30 million from the bank account of a Pakistani taxpayer. The tax authority says the recovery was carried out under the Income Tax Ordinance, 2001, after the individual failed to pay outstanding tax liabilities despite receiving multiple notices.
The case gained public attention after the FBR issued a detailed statement explaining the legal process behind the recovery. The authority also alleged that the taxpayer attempted to stop the recovery by submitting forged appellate orders to his bank.
According to the FBR, the individual publicly described himself as a non-resident Pakistani. However, the authority said he declared himself a resident taxpayer in his income tax returns for the 2017 and 2018 tax years.
Under Pakistan’s tax laws, resident individuals are generally liable to pay tax on their worldwide income.
Tax Assessment and Exemption Claim
The FBR said the taxpayer declared Rs. 23.52 million in foreign income as exempt during each of the two tax years.
According to the authority, this amount exceeded the applicable exemption limit of Rs. 5 million.
Officials stated that notices were issued under Section 122(9) of the Income Tax Ordinance, 2001. The taxpayer was given several opportunities to submit documentary evidence supporting the claimed exemption.
The authority alleged that no supporting documents were provided during the assessment process.
After reviewing the case, the FBR amended the taxpayer’s assessment and raised a tax demand of Rs. 30 million.
Recovery Through Bank Account
The tax authority said the assessed amount remained unpaid after the demand was issued.
As a result, recovery proceedings were initiated under the Income Tax Ordinance.
According to the FBR, Section 140 allows the tax authority to recover unpaid taxes directly from a taxpayer’s bank account after completing the required legal procedure.
Officials maintained that the recovery action was taken only after the assessment, demand notice, and recovery process had been completed.
Alleged Forged Documents
The FBR also claimed the taxpayer later submitted alleged appellate orders to his bank through WhatsApp to stop the recovery.
According to the authority, the documents were never issued by the department.
Officials said the documents contained no official barcode and did not exist in the Inland Revenue System (IRS). The FBR therefore described them as forged and released copies marked as “FAKE.”
The authority further stated that the taxpayer filed an appeal before the Commissioner Inland Revenue (Appeals) on June 24, 2026, the same day he publicly objected to the bank account recovery.
Tax Expert Explains the Legal Process
Tax expert Amer Sharif explained that Pakistan’s tax laws provide the FBR with the legal authority to recover unpaid taxes directly from bank accounts. However, he said this power can only be used after completing several legal requirements.
He explained that Section 82 determines whether an individual is considered a resident or non-resident for tax purposes. Resident taxpayers are generally taxed on worldwide income.
According to Amer Sharif, Section 122(9) allows the FBR to amend a tax assessment after giving the taxpayer an opportunity to respond and submit evidence.
If the assessed tax remains unpaid, Sections 137 and 138 allow the authority to issue a formal tax demand and recovery notice.
Only after those steps have been completed can Section 140 be used to recover outstanding tax from a taxpayer’s bank account.
The tax expert also clarified that although Section 111 was widely discussed on social media, the FBR’s official statement does not indicate that this provision was used in the present case.
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The authority maintains that its action was based on the assessment process under Section 122(9) and that the recovery was carried out in accordance with the law after the taxpayer allegedly failed to provide documentary evidence supporting the claimed tax exemption.
