FBR Recovers Rs. 3 Crore Directly From Citizen’s Bank Account

The Federal Board of Revenue (FBR) has defended the recovery of Rs. 30 million (3 crore) from the bank account of a Pakistani citizen after he allegedly attempted to stop the recovery by submitting forged FBR appellate orders to his bank.

FBR irresponsibly shared the individual’s private details on X but that is a separate story. It said the citizen publicly portrays himself as a non-resident expat but declared himself a resident individual in his income tax returns for tax years 2017 and 2018. Under Pakistan’s tax laws, residents are generally liable to pay tax on their worldwide income.

FBR said this individual declared Rs. 23.52 million in foreign income as exempt in each of the two tax years. This exceeded FBR’s applicable exemption limit of Rs. 5 million.

FBR said it issued notices under Section 122(9) of the Income Tax Ordinance, 2001, and gave him many opportunities to submit documentary evidence supporting his claim, but alleged that no evidence was furnished.

It also subsequently amended his tax assessment and raised a tax demand of Rs. 30 million. After the amount remained unpaid, it initiated recovery proceedings under the Income Tax Ordinance. With this rule, FBR is empowered to recover outstanding tax directly from a taxpayer’s bank account.

FBR said this individual later presented forged FBR appeal orders through WhatsApp to his bank in an attempt to stop the recovery. It said the documents were never issued by the department, carried no official barcode, did not exist in its Inland Revenue System (IRS), and were therefore fake. It shared copies of the alleged forged orders, each marked “FAKE.”

Is FBR’s stance justified?

Tax expert Amer Sharif (X: @AmerSharifOFCL) gave all the details to ProPakistani about how FBR can legally withdraw outstanding dues under special circumstances such as this one.

He said that under the Income Tax Ordinance, 2001, the power exists but only after several legal steps are completed.

Section 82: Resident Status

Amer explained that if an individual stays in Pakistan for 183 days or more during a tax year, they are generally treated as a resident for tax purposes.

A resident is taxable on worldwide income, while a non-resident is generally taxed only on income sourced from Pakistan.

The FBR statement said the individual declared himself a resident in his tax returns, while publicly claiming to be a non-resident.

FBR mentioned that the individual filed an appeal before the Commissioner Inland Revenue (Appeals) on June 24, 2026—the same day he publicly raised his grievance over the bank account recovery.

Section 122(9): Amendment of Tax Assessment

Amer said if FBR believes a tax return contains incorrect information or insufficient evidence, it may issue a notice under Section 122(9) proposing amendments. This provision requires FBR to inform the taxpayer and provide an opportunity to explain or submit evidence before finalizing the amended assessment.

FBR says this process was followed and that multiple notices were issued to the citizen.

Sections 137 and 138: Tax Demand and Recovery Notice

Once an amended assessment is finalized:

• Section 137 specifies when the assessed tax becomes payable.
• If the tax remains unpaid, Section 138 allows FBR to issue a formal demand and recovery notice.

Amer said that only after these steps can enforcement action legally begin.

Section 140: Direct Withdrawal From Taxpayer’s Bank Account

Amer said Section 140 gives FBR the authority to direct a bank to transfer money from a taxpayer’s account to the government to recover unpaid tax.

However, this is not an independent power. It is intended to be used after the assessment, demand, and recovery notice process has been completed. In the above case, FBR says it correctly exercised its powers only after completing the assessment and recovery process and after the tax remained unpaid.

What about Section 111?

Amer added that Section 111 deals with unexplained income or assets and allows FBR to treat unexplained amounts as taxable income where a taxpayer cannot justify their source.

Social media discussions have linked Section 111 to this case because it involved foreign income. However, FBR’s official statement does not say it invoked Section 111.

FBR exercised Section 122(9) because no documentary evidence was provided supporting the claimed exemption for the individual.