Income Tax Ordinance 2001: Commissioner IR has court powers for production of taxpayers’ record

KARACHI: The tax laws have empowered Commissioner of Inland to act as a court under the Code of Civil Procedure for compelling production of records of any person.

According to updated Income Tax Ordinance, 2001 issued by the Federal Board of Revenue (FBR), the Section 176 empowered Commissioner IR with vast powers to obtain information from any person

Section 176: Notice to obtain information or evidence

Sub-Section (1): The Commissioner may, by notice in writing, require any person, whether or not liable for tax under this Ordinance –

“(a) to furnish to the Commissioner or an authorised officer, any information relevant to any tax leviable under this Ordinance or to fulfill any obligation under any agreement with foreign government or governments or tax jurisdiction, as specified in the notice; or”; and

(b) to attend at the time and place designated in the notice for the purpose of being examined on oath by the Commissioner or an authorised officer concerning the tax affairs of that person or any other person and, for that purpose, the Commissioner or authorised officer may require the person examined to produce any accounts, documents, or computer-stored information in the control of the person ; “or”

(c) the firm of chartered accountants, or a firm of cost and management accountants as defined under the Cost and Management Accountants Act, 1966 (XIV of 1966), as appointed by the Board or the Commissioner, to conduct audit under section 177, for any tax year, may with the prior approval of the Commissioner concerned, enter the business premises of a taxpayer, to obtain any information, require production of any record, on which the required information is stored and examine it within such premises; and such firm may if specifically delegated by the Commissioner, also exercise the powers as provided in sub-section (4).

“(1A) A special audit panel appointed under sub-section (11)of section 177, for any tax year, may, with the prior approval of the Commissioner concerned, enter the business premises of a taxpayer, to obtain any information, require production of any record, on which the required information is stored and examine it within such premises and such panel may if specifically delegated by the Commissioner, also exercise the powers as provided in subsection(4).”

Sub-Section (2): The Commissioner may impound any accounts or documents produced under sub-section (1) and retain them for so long as may be necessary for examination or for the purposes of prosecution.

Sub-Section (3): The person from whom information is required, may at his option, furnish the same electronically in any computer readable media. Where a hard copy or computer disk of information stored on a computer is not made available as required under sub-section (1), the Commissioner may require production of the computer on which the information is stored, and impound and retain the computer for as long as is necessary to copy the information required.

Sub-Section (4): For the purposes of this section, the Commissioner shall have the same powers as are vested in a Court under the Code of Civil Procedure, 1908 (Act V of 1908), in respect of the following matters, namely: —

(a) enforcing the attendance of any person and examining the person on oath or affirmation;

(b) compelling the production of any accounts, records, computer-stored information, or computer;

(c) receiving evidence on affidavit; or

(d) issuing commissions for the examination of witnesses.

Sub-Section (5): This section shall have effect notwithstanding any law or rules relating to privilege or the public interest in relation to the production of accounts, documents, or computer-stored information or the giving of information.

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