The Supreme Court has issued leave grant order and suspended Sindh High Court (SHC) judgement relating to resident taxpayers’ separate declaration of foreign assets, income, expenditure and liabilities. Hafiz Ahsaan Ahmad Khokhar, Advocate Supreme Court of Pakistan, represented Federal Board of Revenue (FBR) in Supreme Court on Monday against the judgment of SHC in cases related to the challenging of show cause notices proceedings issued to resident taxpayers under new legal amendments in the Income Tax Ordinance 2001 introduced first time by the Parliament through Finance Act 2018 whereby the legislature has specifically required and provided special procedure with rational and wisdom, legally bound and required every resident tax payer under new Section 116A (1), Section 109A of ITO, 2001 to separately declare their foreign assets, incurring foreign expenditure, earning foreign income and owning foreign liabilities through their separate foreign income and asset statement, starting from tax year 2019 with certain default consequence made liable under new Section 182(1) at Serial 1AAA of the Income Tax Ordinance 2001. The SHC held in the impugned judgment that in absence of notified format required under Section 116A (2) of the Income Tax Ordinance 2001, and whereas, nothing has been concealed nor there is any consequence either on income or tax liability of petitioners for non-filing of foreign income and assets statement along-with return of income for tax year 2019, as required under Section 116A1, the penal provisions under section 182 (2) of the Ordinance could not be invoked. Further, hold that the department failed to establish willful default or mens-rea on the part of respondent/taxpayers in the subject cases, therefore issuance of notices under section 182 (2) could not be validated and declared as illegal and resultantly of no consequence.). On default, Show cause notices were issued for their tax explanation then how department failed to establish willful default at this stage. Hafiz Ahsaan Ahmad Khokhar Advocate submitted that SHC failed to appreciate that foreign income and assets statement under Section 116A (1) of the Income Tax Ordinance, 2001 are different in nature and providing different financial positions of taxpayers and serves the different purposes of resident taxpayers for the financial transparency in Pakistan and the subject petitions were premature and not maintainable against these show cause notices, that only replies were sought and neither any assessment order was passed nor adjudication was finalized against taxpayers, and moreover the remedy along with complete process for challenging the same, if aggrieved, has been prescribed and was available with tax payers under different provisions of the Income Tax Ordinance, 2001, therefore, the impugned judgment is liable to be set aside. Hafiz Ahsaan Ahmad Khokhar Advocate submitted that SHC invalidated show cause notices proceedings in constitutional jurisdiction on presumptions when regular adjudication proceedings were pending before the authority under the prescribed provision of the Ordinance superior courts also held that the proceedings initiated under special taxing statutes to be responded and resolved before the authority and the forums, provided under the statute for such purpose and any departure from such legal procedure would amount to frustrate the proceedings which is initiated by the public functionaries under the law and will further preempt the decision on merits by the authorities and the forums which provided under the statute for such purpose, therefore, the impugned Judgment is against the law and judgments of Supreme Court liable to be set-aside. Hafiz Ahsaan Ahmad Khokhar submitted that that SHC ought to have looked into the matter with different angles as to whether compliance of law at the time of invoking show cause notices proceedings has been made or if any of the provisions has been omitted or violated then what prejudice is likely to cause to the taxpayer to whom show cause notice was given, but in the instant case, it is respectfully submitted that no prejudice was caused to the taxpayers as the compliance of the relevant law was made by the department without any malafide and jurisdictional defect and these aspects have been totally ignored while passing the impugned judgment, therefore, the impugned Judgment is liable to be set-aside. Hafiz Ahsaan Khokhar submitted that Sindh High Court was not justified to set aside the proceedings of statutory Notices issued under Section 182 (2) read with Section 116A (1) of the Income Tax Ordinance, 2001 and passed observations without comprehending the legal position that levying penalty under Section 182 (2) of Ordinance is in nature of mandatory compliances provided separately under Chapter-X of the Ordinance 2001with independent consequences whereas the legislature promulgated Chapter XI for Criminal Offences and Prosecution in the Income Tax Ordinance 2001 therefore, the impugned judgment is not sustainable and liable to be set aside. Ahsaan Khokhar submitted that SHC failed to appreciate that fine is one of the punishments provided under Section 53 of the Pakistan Penal Code, 1860 for the offences, whereas penalty is liability for civil wrongs and breach of civil obligations prescribed in Chapter-X of the Ordinance 2001 with independent consequences, therefore the impugned judgment is not based on correct interpretation of the relevant laws, hence not sustainable under the law and is liable to be set-aside. The Supreme Court after hearing both sides accepted the contentions of FBR and issued leave granting order and suspended the judgment of SHC.