ISLAMABAD: Federal Board of Revenue (FBR) has implemented a functional system separating functions of enforcement, audit and legal for big taxpayers.
This functional system has only been introduced at the large taxpayers units (LTUs) where FBR makes assessment of taxpayers with high annual turnover.
In order to implement the FBR has issued jurisdiction orders for LTUs Karachi, Lahore and Islamabad.
According to an order issued on August 05, 2020 the FBR re-designated the jurisdiction of Chief Commissioner Inland Revenue and Commissioner Inland Revenue of LTU Karachi.
The functional system has been implemented from August 10, 2020.
The Commissioner Audit shall have powers and functions included:
Income Tax:
(a) Calling for information and audit of cases under Part VIII of chapter X, assessment, amendment of assessment and agreed assessment under Part II of Chapter X, charge of tax under Chapter II, computation of taxable income and total income under Chapter III and computation of taxable income under Part II of Chapter X arising out of such orders, rectification of orders related to audit and exercise of powers and functions under Section 175 and 176 or under any specific provision of law and rules provided in the Income Tax Ordinance, 2001 and Schedules thereto in respect of audit and assessment;
(b) assessment under Section 143 and 144;
(c) Computation of income chargeable to tax, determination of tax payable thereon, allowing credit of the tax already paid or of the determined refunds while exercising powers and performing function and mentioned at (a) and (b).
(d) Best judgment assessment under Section 121 read with sub section 10 of Section 177 in respect of cases under audit;
(e) Exercising powers to determine income under ‘Anti-Avoidance’ provisions contained in Chapter VIII;
(f) Revision of assessment under Section 122A in respect of audit related cases;
(g) imposition of penalty under Part X of Chapter X against defaulters in respect of cases under audit;
(h) Perform any other functions in determining and computing income chargeable to tax and correct tax payable under the said Ordinance and Rules made thereunder;
(i) To process / finalize complaints in respect of existing taxpayers’ cases;
(j) Implementation of audit planning and audit strategy in accordance with audit guidelines and audit manuals developed by FBR or Member (Taxpayers’ Audit);
(k) To grant approval for revision of return of income and wealth statements;
(l) Disposal of external / internal audit paras related to audit;
(m) Giving effect to orders of the appellate authorities / FTO orders related to audit;
(n) Any other audit functions assigned the Chief Commissioner Inland Revenue or FBR for achieving the purpose of the Income Tax Ordinance, 2001 & Rules and Procedures framed thereunder.
Sales Tax:
(a) Audit and assessment of registered persons;
(b) Risk based audit through profiling and analysis;
(c) Recovery of un-disputed liability detected during audit;
(d) Monitoring of audit schedule, etc.;
(e) Maintenance and analysis of audit records and audit related database;
(f) Post refund audit and scrutiny;
(g) Deregistration audit;
(h) Investigative audit in cases related for audit under Section 38 of the Sales Tax Act, 1990, and exercise of powers under Section 38A and 38B in respect of cases under audit;
(i) Implementation of audit planning and audit strategy in accordance with audit guidelines and audit manuals developed by FBR or Member (Taxpayers’ Audit);
(j) Disposal of external/internal audit paras related to audit;
(k) Granting approval for the revision of returns;
(l) Grant of extension in time/condonation of delay in respect of audit related functions as per the relevant provisions of Sales Tax Act and Rules made thereunder;
(m) Exercise of powers under Section 38 regarding functions/assignments related to cases selected for audit;
(n) Exercise of powers under section 45A(4) in respect of the cases related to audit functions;
(o) Rectification of mistakes in respect of orders relating to audit functions;
(p) Giving effect to orders of the appellate authorities/FTO orders relating to audit;
(q) Any other audit function given by the Chief Commissioner Inland Revenue or FBR for achieving the purpose of Sales Tax Act, 1990 and Rules and Procedure framed thereunder.
Federal Excise:
(a) Audit and assessment of registered persons;
(b) Risk based audit through profiling and analysis;
(c) Maintenance and analysis of audit records and audit related database;
(d) Implementation of audit planning and audit strategy in accordance with audit guidelines and audit manuals developed by FBR or Member (Taxpayers’ Audit);
(f) Disposal of external / internal audit paras related to audit;
(g) Granting approval for the revision of return;
(h) Grant of extension in time / condonation of delay in respect of audit related functions as per the relevant provisions of Federal Excise Act 2005 and Rules made thereunder;
(i) Rectification of mistakes in respect of orders relating to audit functions;
(j) Exercise of powers and chapter IV of FED Act, 2005 regarding functions/assignments related to audit to the extent of conducting search of a premises;
(k) Any other audit function given by Chief Commissioner Inland Revenue or FBR for achieving the purpose of Federal Excise Act, 2005 and Rules and procedures framed thereunder.
The Commissioner Enforcement shall have powers and functions included:
Income Tax:
(a) Enforcement, recovery and collection of income tax;
(b) Ensuring and enforcing compliance of the statutory provisions regarding filing of statutory returns, statements, furnishing of information, maintenance of prescribed accounts, documents and records; imposition of penalty and taking other action under the law against non-compliant taxpayers;
(c) Best judgment assessment under Section 121, except in cases under audit;
(d) Provisional Assessment under the Tenth Schedule;
(e) Monitoring of deduction, collection and payment of tax at source by withholding/collecting agents; issuance of exemption/lower rate certificates and charging of tax on defaulting withholding/collecting agents;
(f) Passing orders under Division IV of Part V of Chapter X of the Income Tax Ordinance, 2001;
(g) Imposition of penalty and charging default surcharge for non-filing of statutory statements and default of withholding/payment of withholding taxes;
(h) To make any other related action under the provisions of the Income Tax Ordinance, 2001 regarding withholding taxes;
(i) Effect collection and recovery of tax under Part-IV and V of Chapter X;
(j) Determine and issue refunds under Part-VI of Chapter-X including refund adjustments;
(k) Rectification of mistakes in respect of orders relating to the enforcement functions;
(l) Giving effect to orders of the appellate authorities / FTOs orders relating to enforcement;
(m) Rectification of cases not related to audit;
(n) Launching prosecution under Part-XI of Chapter-X;
(o) Disposal of international and external audit observation / paras other than those related to audit and assessment;
(p) Imposition of penalty under Part-X of Chapter-X except the cases under audit;
(q) Revision of assessment under Section 122A in respect of enforcement related cases;
(r) Grant of extension in filing of returns/statements;
(s) Any other powers and functions not specifically assigned to any other commissioner Inland Revenue;
(t) Exercise powers under Section 175 and 176 in respect of cases other than cases under audit;
(u) Any other enforcement related powers and functions assigned by the Chief Commissioner Inland Revenue or FBR for achieving the purpose of the Income Tax Ordinance, 2001 and Rules and procedures framed thereunder.
Sales Tax:
(a) Enforcement and collection of sales tax;
(b) Recovery action under section 11 of the Sales Tax Act, 1990 against non-filers and short-filers, and any other auction under Section 11 for enforcement related functions, except the cases under audit;
(c) Suspension, black listing and deregistration of the registered persons;
(d) Enforcement of returns;
(e) Sales Tax registration;
(f) Processing and sanctioning of refund claims filed under Section 10 and 66 of the Sales Tax Act, 1990;
(g) Reporting of Revenues;
(h) Disposal of international and external audit observations/paras related to enforcement functions;
(i) Disposal of CREST discrepancies;
(j) Industrial Surveys;
(k) Powers and functions regarding investigation, prosecution and arrest of a person;
(l) Implementation of enforcement planning and strategy in accordance with guidelines developed by the FBR;
(m) Extension in time/condonation of delay regarding filing of returns/refund claims;
(n) Authorization of zero rated/concessionary imports and local purchases;
(o) Exercise of powers under Section 38, 38A and 38B regarding functions/assignments related to enforcement;
(p) Exercise of powers under section 40B and 40C;
(q) Exercise of powers under section 45A(4) in respect of cases related to enforcement functions;
(r) Giving effect to orders of appellate authorities / FTO orders relating to enforcement;
(s) Rectification of mistakes in respect of orders relating to enforcement functions;
(t) Any other powers and functions not specifically assigned to any other commissioner Inland Revenue;
(u) Any other enforcement related power function assigned by the Chief Commissioner Inland Revenue or FBR for achieving the purpose of Sales Tax Act 1990 and Rules made there under.
Federal Excise:
(a) Enforcement and Collection of Federal Excise;
(b) Processing and sanctioning of refund claims filed under Federal Excise Act 2005;
(c) Enforcement of returns and registration of persons liable to be registered;
(d) Reporting of Revenue;
(e) Disposal of internal and external audit observations/paras/Crest discrepancies related to enforcement functions;
(f) Implementation of enforcement planning and strategy in accordance with guidelines developed by the FBR or Member (Enforcement and Accounting);
(g) Extension in time / condonation of delay for filing of return;
(h) Exercise of powers under chapter IV of the FED Act 2005 with the exception of the powers and functions assigned to Commissioners Inland Revenue Audit.
(i) Rectification of mistakes in respect of orders relating to enforcement functions;
(j) Any other powers and functions not specifically assigned to any other Commissioner Inland Revenue;
(k) Any other enforcement related power and function assigned by the Chief Commissioner Inland Revenue or FBR for achieving the purpose of Federal Excise Act, 2005 and Rules and Procedures framed thereunder.
The Commissioner Legal shall have powers and functions included:
Income Tax:
(a) Defending appeals before Commissioner Inland Revenue (Appeals), instituting and defending departmental appeals and references under Part-III of Chapter X, prosecution of cases instituted under any provision of the Income Tax Ordinance, 2001, filing and pursuing CPLAs in the Supreme Court of Pakistan, and representing the department in the process of liquidation;
(b) Defending complaints before Federal Tax Ombudsman (FTO);
(c) File/defend presentations before the President of Pakistan;
(d) Appoint legal advisors and assign cases, wherever required, for representation before appellate fora;
(e) Grant recognition/approval to provident funds, superannuation funds, and gratuity funds under the Sixth Schedule; and exercise all the powers under the said Schedule;
(f) Grand of approval to Non-Profit Organizations under Section 2(36).
(g) Any other legal functions assigned by the Chief Commissioner Inland Revenue or the FBR for achieving the purposes of Income Tax Ordinance, 2001 and Rules made thereunder.
Sales Tax:
(a) Preparation, institution, follow up and defense of cases before Supreme Court, High Court, Appellate Tribunal;
(b) Preparation, follow-up and defense of cases before Commissioner (Appeals) and Alternative Dispute Resolution Committee;
(c) Matters relating to Federal Tax Ombudsman (FTO); and
(d) Any other legal function assigned by the Chief Commissioner Inland Revenue or the FBR for achieving the purpose of Sales Tax Act, 1990 and rules made thereunder.
Federal Excise:
(a) Preparation, institution, follow up and defense of cases before Supreme Court, High Court, Appellate Tribunal;
(b) Preparation, follow-up and defense of cases before Commissioner (Appeals) and Alternative Dispute Resolution Committee;
(c) Matters relating to Federal Tax Ombudsman (FTO); and
(d) Any other legal function assigned by the Chief Commissioner Inland Revenue or the FBR for achieving the purpose of FED Act 2005 and rules made thereunder.
