ISLAMABAD: The IT Wing of Federal Board of Revenue (FBR) has developed e-module for settlement of assessment cases under Section 122D of Income Tax Ordinance, 2001.
In an office memo issued to chief commissioners Inland Revenue (CCIR) of Large Tax Offices (LTOs), Medium Tax Office (MTO), Corporate Tax Offices (CTOs) and Regional Tax Offices (RTOs), the FBR said that e-module of agreed assessment under Section 122D of Income Tax Ordinance, 2001 is available in IRIS.
The FBR said that the option to avail the opportunity of agreed assessment is visible to taxpayers, who have been issued show cause notices under Section 122(9) of the Ordinance.
The FBR directed the CCIRs to sensitize unit officers about the e-module and also aware legal fraternity and taxpayers about this addition in IRIS.
The FBR further directed the CCIRs to provide information in respect of taxpayers, who opted for agreed assessment by 5th of every month along with details of number of cases applied, number of cases finalized and demand created in settlement cases.
The CCIRs have also been directed to form assessment oversight committees at their tax offices and send details to the FBR by January 05, 2021.
The Section 122D of the Ordinance has been introduced through Finance Act, 2020. Prior to the Finance Act, 2020 there was no mechanism under the Ordinance for negotiated settlement of tax disputes before finalization of an assessment/amended assessment.
In order to facilitate taxpayers, reduce burden on the formal appeal system and effecting speedy recoveries, a new section 122D enabling agreed assessment has been inserted through the Finance Act, 2020.
If a taxpayer intends to settle his case on or after receipt of a notice for amendment of assessment under section 122(9) of the Ordinance, he shall have the option of filing an offer of settlement in the prescribed form before the Assessment Oversight Committee for resolution of his dispute.
In addition, the taxpayer shall also be obliged to file a reply in response to notice for amendment of assessment under section 122(9) of the Ordinance before the concerned Commissioner.
The Assessment Oversight Committee shall comprise the Chief Commissioner Inland Revenue, the Commissioner Inland Revenue and the Additional Commissioner Inland Revenue having jurisdiction over the taxpayer.
The Committee shall examine the offer of settlement and may also call for the record of the case. Moreover, the Committee shall have the mandate to accept or modify the offer of settlement of the taxpayer through consensus after affording the taxpayer an opportunity of being heard.
In case, the Committee’s decision is acceptable to the taxpayer, the taxpayer shall be obliged to deposit the amount of tax payable, including penalty and default surcharge, in accordance with the decision of the committee pursuant to which the Commissioner shall amend the assessment in accordance with the decision of the committee.
Moreover, in such instances, the taxpayer shall forego his right to file appeal against such amended assessment.
In case, the Committee is unable to arrive at a consensus in respect of the offer of settlement or the taxpayer is not satisfied with the decision of the Committee, the concerned commissioner shall decide the case on the basis of reply filed by the taxpayer in response to notice of amendment issued under section 122(9) of the Ordinance.
Cases involving concealment of income or interpretation of question(s) of law having effect on other cases have been ousted from the purview of the agreed assessments under section 1220 of the Ordinance.