The Federal Board of Revenue has enforced Chapter XX of the Income Tax Rules, 2006, from October 15, 2026, setting out procedures for faceless audits, assessments and electronic communications with taxpayers.
ISLAMABAD: The Federal Board of Revenue (FBR) has enforced rules governing faceless audits and assessments for taxpayers covered by the relevant provisions, with effect from October 15, 2026.
Through SRO 1828(I)/2026, dated October 15, 2026, the FBR brought Chapter XX of the Income Tax Rules, 2006, into force. The chapter establishes procedures for conducting specified tax audits, assessments and related proceedings through the National Faceless Centre.
Under Rule 233, the framework applies to proceedings under Section 122E of the Income Tax Ordinance, 2001, involving persons, classes of taxpayers, income categories or cases designated by the FBR under the relevant provisions. The rules therefore apply to cases brought within the framework rather than automatically covering every taxpayer.
National Faceless Centre to handle tax proceedings
According to Rule 235, the National Faceless Centre will comprise a Director General, commissioners and other income tax authorities, supported by four wings: Audit, Assessment, Quality Control and Field Operations.
Rule 236 provides for specified proceedings to be conducted through the centre, including audits under Sections 177 and 214C, proceedings under Section 111, and assessments, amended assessments, best-judgement assessments and provisional assessments under Chapter X of the Income Tax Ordinance, 2001.
The framework also covers related proceedings, including notices, requests for information and evidence, and the imposition of penalties or default surcharges arising from these cases.
Separate officers for audit, assessment and quality control
Under Rule 237, the FBR will assign cases to the centre where the relevant taxpayer or case has been designated under Section 122E. An allocation algorithm will assign audit, assessment and quality-control functions to separate officers or units.
No officer will be permitted to perform more than one of these functions in the same case for the same tax year. The identity of the officer or unit will remain recorded in the FBR’s electronic system but will not be disclosed in accordance with the relevant legal provisions.
Electronic notices and taxpayer responses
Rule 238 requires notices, orders, requisitions, audit reports and other communications issued by the centre to be generated through the FBR’s computerised system and carry a Digital Identification Number (DIN). Service of these communications will follow the procedure prescribed under Section 218.
Under Rule 239, taxpayers and their authorised representatives must submit replies, documents, evidence and other communications through their designated accounts on the FBR’s IRIS system. Documents must be provided electronically in the format specified by the board where required.
Physical verification and quality control
The rules also allow physical verification where necessary. Under Rule 241, an audit or assessment officer must record the reasons and specific matters requiring verification before referring the request to the Chief Commissioner of the National Faceless Centre.
If satisfied, the Chief Commissioner may direct the Field Operations Wing to conduct the verification. The FBR may also assign the task to another officer, and the resulting report must be uploaded to the electronic record within the specified timeframe.
Rule 242 provides for quality-control reviews of audit reports, adjudication notices and assessment orders to ensure that they are examined in light of the applicable law and facts of each case.
Penalties, surcharge and transfer of cases
Under Rule 243, notices and orders relating to penalties under Section 182 or default surcharge under Section 205 must be issued through the centre by the relevant audit or assessment officer. The prescribed procedures for notices, replies and electronic hearings will apply.
Rule 244 allows cases to be transferred from the centre to another tax authority in specified circumstances. These include cases requiring extensive physical records, repeated physical verification, search or seizure proceedings, prosecution-related requirements, or links with other proceedings that make separate handling inappropriate.
The FBR may also issue instructions, standard operating procedures and formats to implement the framework, including procedures and restrictions through IRIS, under Rule 245.
The introduction of Chapter XX establishes a formal procedural framework for conducting designated tax audits and assessments through the National Faceless Centre, with electronic communication, separate functional responsibilities and quality-control arrangements.