FBR notices explained, and what to do when a 114(4) arrives

A notice from FBR is not an accusation and it is not a bill. It is a formal request with a legal clock attached, and almost all of the damage people suffer comes from letting the clock run out rather than from the underlying tax position. This guide covers what the common notices are, what a section 114(4) notice specifically requires, how far back it can reach, and the sequence that follows if it goes unanswered.

If a notice has already arrived and you would rather hand it over, our income tax filing service is staffed by FBR registered consultants who handle notice responses as well as returns. If the notice is about a return you never filed, you may also want how to become a filer in Pakistan.

The notices you are most likely to receive

• Section 114(4), notice to furnish a return of income. The Commissioner is of the opinion that you were required to file and did not.
• Section 116(1), notice to furnish a wealth statement, which the Commissioner may require from any individual.
• Section 176, notice to obtain information or evidence. It can be addressed to any person, whether or not liable for tax, and can require you to furnish specified information or to attend and be examined on oath, producing accounts, documents or computer stored information.
• Section 122(9), the show cause step. An assessment cannot be amended or further amended unless you have been given an opportunity of being heard, and an order under section 122 is to be made within one year of the show cause notice or such extended period as the Commissioner allows.
• Section 137(2), the demand notice. Where tax is payable under an assessment order, a notice is served specifying the amount, and it must be paid within thirty days from the date of service.

All of these appear in your IRIS inbox. If you receive an email or an SMS asking for money or credentials and you cannot see a matching entry in IRIS, do not act on it until you can.

What a section 114(4) notice actually says

Section 114(4) of the Income Tax Ordinance 2001 lets the Commissioner, by notice in writing, require any person who in the Commissioner's opinion is required to file a return for a tax year but has failed to do so, to furnish that return within thirty days from the date of service of the notice, or such longer or shorter period as may be specified in the notice or as the Commissioner may allow.

Three things follow from that wording, and the third is the one that gets people into trouble.

• The clock starts on the date of service, not the date you happened to open IRIS.
• Thirty days is the default position, and the Commissioner has an express power to allow more.
• The notice can lawfully specify a shorter period. A notice giving you seven or fourteen days is not defective for that reason. Never assume thirty.

You can read the section yourself in the consolidated Income Tax Ordinance 2001 published by FBR.

How far back a 114(4) notice can reach

Section 114(5) sets the reach, and it is longer than most people expect.

• The ordinary position is one or more of the last five completed tax years.
• Where a person has not filed a return for any of the last five completed tax years, the notice may be issued for one or more of the last ten completed tax years.
• The time limit does not apply at all where the Commissioner is satisfied, on reasons recorded in writing, that a person who failed to furnish a return has foreign income or owns foreign assets.

The second point is the sharpest one. Long term non filing does not eventually become safe through the passage of time. It moves you from a five year window into a ten year window.

What happens if you do not respond

Section 121 is the consequence. Where a person fails to furnish a return in response to a notice under section 114(3) or 114(4), the Commissioner may, based on any available information or material and to the best of his judgement, make an assessment of the taxable income and the tax due on it. Section 121(1A) allows that assessment to be built on sectoral benchmark ratios notified by the Board, meaning standard ratios for your business sector rather than your own books.

That is the practical danger. A best judgement assessment is not a guess in your favour. It is an assessment made without your figures, and the burden of dislodging it then sits with you.

An assessment order under section 121 must state the taxable income, the tax due, the tax paid and the time, place and manner of appealing. It must be issued within six years after the end of the tax year, or, where the ten year notice window was used, within two years from the end of the tax year in which the notice was issued.

On top of the assessment, section 182 imposes a penalty for failing to file by the due date: the higher of 0.1 percent of the tax payable for each day of default or PKR 1,000 per day, with a minimum of PKR 10,000 for an individual whose income is 75 percent or more from salary and PKR 50,000 in all other cases, capped at 200 percent of the tax payable for the year. The penalty is reduced by 75, 50 or 25 percent where the return is filed within one, two or three months respectively of the due date or extended due date. And unpaid tax attracts default surcharge under section 205 at 12 percent per annum or KIBOR plus 3 percent, whichever is higher.

If an assessment has already been made

You appeal to the Commissioner (Appeals) under section 127. The points that matter operationally:

• The appeal must be lodged within thirty days of the date of service of the notice of demand relating to the assessment or penalty.
• The Commissioner (Appeals) may admit a late appeal on written application, if satisfied that you were prevented by sufficient cause.
• No appeal against an order of assessment may be made unless the taxpayer has paid the amount of tax due under section 137(1).
• The prescribed fee for an appeal against an assessment is PKR 5,000 for a company and PKR 2,500 where the appellant is not a company.
• Since the Finance Act 2025 an aggrieved person may either appeal to the Commissioner (Appeals) or surrender that right and go directly to the Appellate Tribunal Inland Revenue.

What we would do on day one

1. Open the notice in IRIS and write down two things: the section it is issued under and the tax year or years it covers. A 114(4) for tax year 2022 and a 176 for tax year 2025 are entirely different problems.
2. Find the stated compliance date on the notice itself and diarise it. Do not assume thirty days from the date you read it.
3. Check whether the underlying obligation is real. A 114(4) rests on the Commissioner's opinion that you were required to file. If you were genuinely not required to file for that year, that is an answer, and it is made in writing through IRIS rather than by silence.
4. If you were required to file, file. Filing the return in response to the notice removes the basis for a best judgement assessment and starts reducing the section 182 penalty through the one, two and three month reductions.
5. If you need more time, ask before the date passes. The Commissioner has an express power under section 114(4) to allow a longer period, and section 119 provides the extension route for a return that is not yet due. Both are applications, not assumptions.
6. Keep every acknowledgement. The IRIS record of what you filed and when is the evidence you will need if the matter goes to appeal.

A note on notices about years you thought were closed

If you have been off the Active Taxpayer List for several years, a 114(4) is a reasonable thing to expect, and the arithmetic of the five and ten year windows is worth doing before you respond. It is also worth knowing what your status is costing you in the meantime, which we set out in filer and non filer in 2026, and what the current year's deadline and surcharge look like, in the deadline guide.

General information, not tax or legal advice. Notice handling depends on the facts of your own case and on the exact wording of the notice you received. Take advice on your own notice before responding or letting a date pass.