Karachi, January 2026 – The Federal Board of Revenue (FBR) has the authority to select taxpayers for e-audit under sales tax laws. The process is governed by Sales Tax Rules, 2006, updated for tax year 2026, allowing audits to be conducted electronically via IRIS or other approved digital platforms.
This guide explains the procedure, legal framework, and steps for taxpayers selected for e-audit.
What is a Sales Tax E-Audit?
E-Audit is an audit conducted electronically without requiring taxpayers to appear physically. It allows FBR to:
• Review records and returns through IRIS or other electronic platforms
• Conduct audits remotely via video links or approved digital channels
• Issue audit findings and assessments digitally
Benefits of E-Audit:
• Minimizes physical visits
• Speeds up audit process
• Provides transparency in audit proceedings
Legal Framework for E-Audit (Rule 44AA – 44AC)
Rules Governing E-Audit:
| Rule | Description |
| 44AA | Application – Applies to e-audit proceedings under Section 25(2A) of the Sales Tax Act, 1990. |
| 44AB | Definitions – Defines key terms such as: • Audit Officer • Adjudicating Officer • Competent Authority • e-audit • IRIS |
| 44AC | Procedure – Specifies steps to conduct e-audit, including notice, record submission, audit report, and assessment orders. |
Step 1: Selection of Taxpayer for E-Audit
A case can be selected under:
1. Section 25 of the Sales Tax Act
2. Section 72B of the Sales Tax Act
The competent authority (FBR Board or Commissioner Inland Revenue) issues directions to conduct an e-audit.
Notice to Taxpayer:
• Specifies reasons for selection
• Provides instructions on data submission
Step 2: Assignment of Audit Officer
• Commissioner Inland Revenue assigns the case to an Audit Officer
• The Audit Officer is responsible for examining records and documents electronically
Step 3: Submission of Records
• Taxpayers submit records electronically via IRIS or other electronic carriers
• No personal appearance is required
• Taxpayers may request a video-link personal hearing if needed, conducted via:
o Personal computer system
o Nearest Tax Facilitation Centre
Step 4: Audit Examination
The Audit Officer:
1. Reviews all submitted records, documents, and data
2. Seeks explanations from the taxpayer on issues raised
3. Can close the audit in IRIS if no discrepancies are found
If discrepancies exist:
• Audit Officer prepares an audit report with findings
• Copies sent to both Commissioner Inland Revenue and taxpayer via IRIS
Step 5: Adjudication and Tax Assessment
• Commissioner assigns the case to an Adjudicating Officer
• Adjudicating Officer issues a show cause notice through IRIS
• After obtaining explanations, an assessment order is passed under Section 11, including:
o Imposition of penalty
o Default surcharge under Sections 33 and 34
Flow of E-Audit Procedure
| Step | Responsibility | Action |
| 1 | Competent Authority | Select case & issue e-audit notice |
| 2 | Commissioner IR | Assign case to Audit Officer |
| 3 | Taxpayer | Submit records via IRIS |
| 4 | Audit Officer | Examine records & seek explanations |
| 5 | Audit Officer | Prepare audit report if discrepancies found |
| 6 | Commissioner IR | Forward report to Adjudicating Officer |
| 7 | Adjudicating Officer | Issue show cause notice & assessment order |
FAQs – FBR E-Audit 2026
Q1: Do I need to appear physically for an e-audit?
A1: No. E-audit is conducted electronically. Personal hearings can be requested via video link.
Q2: What platform is used for e-audit?
A2: IRIS (web-based FBR system) or other digital channels notified by FBR.
Q3: Can an audit be closed if no discrepancies are found?
A3: Yes. The Audit Officer may close the audit and inform the Commissioner digitally.
Q4: What happens if discrepancies are found?
A4: An audit report is prepared, followed by a show cause notice and tax assessment order under Sections 11, 33, and 34.
Key Takeaways
• E-Audit ensures faster, transparent, and remote audit proceedings
• IRIS plays a central role in record submission and communication
• Maintaining accurate digital records reduces audit risks
• Taxpayers have a right to personal hearings via video link
Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Consult FBR or a qualified tax professional for guidance.