Income Tax Ordinance, 2001 — Section 138B: Estate in bankruptcy

2[138B. Estate in bankruptcy.—(1) If a taxpayer is declared bankrupt, the tax liability under this Ordinance shall pass on to the estate in bankruptcy.

(2)If tax liability is incurred by an estate in bankruptcy, the tax shall be deemed to be a current expenditure in the operations of the estate in bankruptcy and shall be paid before the claims preferred by other creditors are settled.] 139. Collection of tax in the case of private companies and associations of persons.—(1) Notwithstanding anything in the 3[Companies Act, 2017 (XIX of 2017)], where any tax payable by a private company (including a private company that has been wound up or gone into liquidation) in respect of any tax year cannot be recovered from the company, every person who was, at any time in that tax year

(a)a director of the company, other than an employed director; or

(b)a shareholder in the company owning not less than ten per cent of the paid-up capital of the company, shall be jointly and severally liable for payment of the tax due by the company.

(2)Any director who pays tax under sub-section (1) shall be entitled to recover the tax paid from the company or a share of the tax from any other director.

(3)A shareholder who pays tax under sub-section (1) shall be entitled to recover the tax paid from the company or from any other shareholder to whom clause (b) of sub-section (1) applies in proportion to the shares owned by that other shareholder. Chapter X – Procedure

(4)Notwithstanding anything in any law, where any tax payable by a member of an association of persons in respect of the member’s share of the income of the association in respect of any tax year cannot be recovered from the member, the association shall be liable for the tax due by the member. 1[(5) Notwithstanding anything contained in any other law, for the time being in force, where any tax payable by an association of persons in respect of any tax year cannot be recovered from the association of persons, every person who was, at any time in that year, a member of the association of persons, shall be jointly and severally liable for payment of the tax due by the association of persons.

(6)Any member who pays tax under sub-section (5) shall be entitled to recover the tax paid from the association of persons or a share of the tax from any other member.] Chapter X – Procedure

(2)Subject to sub-section (3), the amount set out in a notice under sub section (1)

(a)where the amount of the money is equal to or less than the amount of tax due by the taxpayer, shall not exceed the amount of the money; or

(b)in any other case, shall be so much of the money as is sufficient to pay the amount of tax due by the taxpayer.

(3)Where a person is liable to make a series of payments (such as salary) to a taxpayer, a notice under sub-section (1) may specify an amount to be paid out of each payment until the amount of tax due by the taxpayer has been paid.

(4)The date for payment specified in a notice under sub-section (1) shall not be a date before the money becomes payable to the taxpayer or held on the taxpayer’s behalf.

(5)The provisions of sections 160, 161, 162 and 163, so far as may be, shall apply to an amount due under this section as if the amount were required to be deducted from a payment under Division III of Part V of this Chapter.

(6)Any person who has paid any amount in compliance with a notice under sub-section (1) shall be treated as having paid such amount under the authority of the taxpayer and the receipt of the Commissioner constitutes a good and sufficient discharge of the liability of such person to the taxpayer to the extent of the amount referred to in such receipt. 1[(6A) Notwithstanding anything contained in this Ordinance or any other law or any rule, any decision or judgment of any court, forum or authority, the tax payable under any provision of this Ordinance or any assessment order shall become immediately payable subject to the following conditions

(a)that the case has been decided in the favor of the department at three appellate forums including the High Court;

(b)that the recovery under this section shall only be made to the extent of lowest amount of demand which has been confirmed by any of the three appellate forums; and

(c)that the tax payable exceeds rupees two hundred million, and the Commissioner shall proceed to recover the said amount irrespective of the time provided under any other provision or the said decision or judgment.] 1 Sub-section (6A) inserted by the Finance Act, 2025. 288 Chapter X – Procedure 1[ ] 2[ ] 3[ ]

(10)In this section, "person" includes any Court, Tribunal or any other authority.