KARACHI: Commissioners of Inland Revenue have been empowered to conduct audit of a registered taxpayer every year after removal of restriction through Finance Bill 2019.
Through Finance Act, 2018 a restriction was imposed on offices of the Federal Board of Revenue (FBR) under which they would conduct audit of taxpayers once in every three years.
However, the Finance Bill 2019 proposed to delete the proviso which was introduced through Finance Act last year.
Experts at EY Ford Rhodes Chartered Accountants said that certain taxpayers challenged the audit proceedings under Section 25 where sales tax audit had already been conducted during any of the last three years on the premise that the amendment introduced through the Finance Act, 2018 was procedural change in law and was applicable retrospectively.
Recently, the Honorable Lahore High Court has adjudged the matter in favor of the taxpayer. It appears that the proposed deletion of the third proviso to Section 25 will neutralize the judgment of the Honorable Lahore High Court.