Immediate Tax Recovery After Notice Without Payment Deadline Unlawful: Experts

Tax practitioners have denounced the Federal Board of Revenue’s (FBR) practice of recovering funds from taxpayers’ bank accounts on the same day notices are issued under Section 140 of the Income Tax Ordinance, calling it a clear violation of the law.

According to legal experts, Section 140 mandates that any notice for recovery must specify a future date by which the taxpayer is expected to make the payment. However, FBR often proceeds to recover funds within minutes or just a few hours after appellate decisions are uploaded—leaving no room for taxpayers to respond or challenge the move.

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Sources have revealed that in many instances, massive tax demands worth billions of rupees are raised through sudden return amendments. On the same day, Section 140 notices are generated, and recovery actions are executed—sometimes within 30 minutes, even during late-night hours.

Legal analysts stress that Section 140(1) explicitly requires that a clear deadline for payment be mentioned within the notice. Bypassing this requirement, they argue, undermines due process and strips taxpayers of their constitutional rights, including the right to appeal.

Experts urge that even in cases where coercive measures are permitted under the law, procedural safeguards must be followed, and taxpayers must be allowed reasonable time to comply before such aggressive recoveries are initiated.