Tax Consultants

  I. Introduction A. Definition of the Doctrine:    The doctrine of past and closed transactions in tax matters refers to a principle in taxation that provides legal protection to taxpayers against the reassessment or reopening of tax assessments for a particular period once the time for such review has expired. In essence, it establishes a cutoff point beyond which tax authorities cannot revisit or amend tax assessments, ensuring tax certainty and finality for taxpayers . B. Significance in Taxation: The doctrine is of great significance in taxation as it helps strike a balance between the need for governments to collect revenue and the rights of taxpayers to have a predictable and stable tax environment. It prevents arbitrary or repetitive assessments, providing taxpayers with a sense of security and stability in their  financial planning . C. Purpose of the Doctrine: The primary purpose of the doctrine is to promote tax compliance and stability by limiting the ta...

  In a third world country, ordinarily governmental agencies tend to abuse powers and  tax departments of Pakistan  (federal, provincial or city/district governments) are no exception. Ordinarily, on receipt of a notice (informative and inquisitorial) an ordinary taxpayer of Pakistan – according to my 16 years’ experience as a tax lawyer – is driven by three reactions. A reaction of fear A reaction of aversion A reaction of misunderstanding In their approach, these reactions are negative, evasive and reactive in character and instead of resolution of the issue there is a likelihood of exploitation or an expedient conclusion which might prove self-defeating in short or medium terms for lawful  tax compliance . On the contrary, a prudent taxpayer and a right-conscious citizen would react to such notice with three positive approaches. He would examine as to whether the notice has been issued by exercise of excessive powers beyond the prescribed conditions and limitatio...