LAHORE, May 1: The income tax authorities have directed the Parks and Horticulture Authority to submit its accounts along with all receipts of income and expense for the determination of income tax.

The notice, which requires the PHA to submit all documents needed for the determination of the income tax on Monday, is said to have been served under Section 61 of the Income Tax Ordinance, 1979, due to PHA’s failure to file IT returns despite a direction by the tax department under Section 56.

The notice says an “ex-parte decision may be taken against the PHA if it fails to produce the documents and accounts on the said date, i.e., May 5.” An ex-parte decision may entail a penal action.

“Such a notice is issued only when the tax collectors actually believe that the income is chargeable to tax,” Eastern region (company zone-II) officials said on Thursday.

PHA lawyer Shafqat Mahmood Chohan in the reply to the earlier notice under Section 56 of the Income Tax Ordinance, 1979, submitted to the income tax department that the income of the PHA was not chargeable to tax. He had contended in his reply that the “PHA was a local authority set up under the Punjab Development of Cities Act, 1976, and hence was exempt from income tax”.

Similarly, he had argued that the “PHA was part of the Punjab government and its entire income was the income of the provincial government that could not be taxed”.

“However, the income tax department rejected this plea, and is moved ahead with its assessment that the PHA income is taxable by having served another notice requiring it to produce its accounts and other books containing the record of its income and expense,” the PHA sources said.