KARACHI: Federal Board of Revenue (FBR) has directed the offices of Inland Revenue (IR) to avoid undue recovery proceedings until a case has passed the test of appeal at first appellate.
In an official note circulated to all chief commissioners of Large Taxpayers Offices, Corporate Tax Offices, Medium Taxpayers’ Office and Regional Tax Offices regarding undue recover proceedings under Section 138 at first appellate.
READ MORE: FBR directs 85 big retailers to integrate businesses
The revenue body previously on October 12, 2021 issued directives to field formations and instructed to avoid coercive measures until case has passed the test of appeal at the level of Commissioner (Appeals).
“Coercive measures, until case has passed the test of appeal at the level of Commissioner IR (Appeals), may avoided. Moreover, in order to utilize collective wisdom, a committee comprising of senior commissioner IR headed by Chief Commissioner IR may be constituted at formation level to deliberate on the cases before according approval for coercive measures.”
READ MORE: FBR issues one million tax notices to enforce compliance
The FBR said it had come to its knowledge that the instructions contained in the FBR’s letter were not being followed.
“In this regard, it is clarified that the instructions/directions issued by FBR aforementioned letter have not been withdrawn and to be followed in letter and spirit,” the FBR added.
The FBR issued these directives on the issue raised by Karachi Tax Bar Association (KTBA) regarding undue recovery proceedings.
READ MORE: FBR unveils plan to achieve Rs7.47 trillion revenue collection target
The tax bar in its letter dated September 29, 2022 to the FBR chairman stated that it had received queries from bar members and taxpayers that different officers of FBR issuing notices of alleged recovery under section 138(1) of the Income Tax Ordinance, 2001 irrespective of the fact that the, appeal is pending before the first appellate authority and yet to be finalized.
KTBA President Syed Rehan Hasan Jafri informed the FBR that there was already a circular sent to all chief commissioners IR that ‘coercive measures until case has passed the test of appeal at the level of commissioner IR (Appeals) may be avoided’ in respect of measures to avoid unnecessary litigation.
READ MORE: Customs officer awarded major penalty of rank demotion
The KTBA urged the FBR chairman to issue directives to all the officers of the IR to follow the instructions which were binding on the officers of the FBR to avoid unnecessary harassment to the taxpayers.
