The Federal Board of Revenue (FBR) has taken serious notice of the ongoing harassment of the business community and has ordered its field formations to immediately stop making illegal cases about the concealment of income or misdeclarations against the taxpayers disguised as ‘audits’ or ‘definite information’.
The FBR’s instructions to the field offices revealed the harassment of the business community to which notices have been issued without the completion of the legal requirements under the Income Tax Ordinance, 2001.
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In most cases, the Inland Revenue field formations are actively involved in the amendment of the income tax assessments of taxpayers under the cover of ‘audits’ or ‘definite information to raise frivolous tax demands against the taxpayers. Tax officials are amending the assessments of income tax returns under this ongoing practice to revise the taxes declared by the taxpayers.
The tax officials are involved in the amendment of tax assessments to impose higher taxes and create extraordinary demands by ignoring the procedure stipulated by the law. Additionally, the words ‘definite information’ of concealment of income and tax evasion has been grossly misused particularly by the tax officials working in the field formations.
Moreover, the purpose of the exercise is to recover undue taxes from the business community by issuing notices to the registered taxpayers to amend their declared income tax returns.
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The FBR has taken notice of the letter of the Pakistan Tax Bar Association and issued instructions on Tuesday for this illegal practice of the tax officials working in the field formations to be stopped.
The FBR’s instructions read: “The representations have been received in the Board suggesting that field officers are recklessly issuing notices u/s 122(5) read with 122(9) of Income Tax Ordinance, 2001 (hereinafter “the Ordinance”) where purportedly the threshold of “definite information” as defined u/s 122(8) is not met.”
The instructions continued as: “It goes without saying that amendment proceedings u/s 122(5) of the Ordinance, merely on the basis of audit suspicion picked from within the declarations lodged by the taxpayers themselves, is an enforcement travesty and need to abate. The scheme of law warrants that a taxpayer must be dealt with precisely as per principles of justice and fair play. The adherence to law and due diligence must be ensured in respect of each taxpayer and no case be opened merely on surmises and assumptions. All taxpayers must be provided an adequate opportunity of being heard too”.
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