KARACHI: Tax offices are issuing notices to a number taxpayers for filing income tax returns of past years, where the taxpayers have already made compliance.
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KTBA protests over ex-parte tax orders against COVID patients
KARACHI: Karachi Tax Bar Association (KTBA) on Wednesday protested over ex-parte order passed by tax offices despite taxpayers, who tested positive for coronavirus, applied for adjournment.
The KTBA in a letter sent to Member Inland Revenue (Operations) of Federal Board of Revenue (FBR), said that the field formations of FBR are not considering requests from taxpayers/authorized representatives (ARs) for adjournment of hearings/compliance and are adamant to proceed ex-parte/enforce personal hearings.
“The bar has also received complaints from our members that in some of the cases, ex-parte orders have already been passed where taxpayers/ARs were observing self isolation and were quarantined for having contracted Covid-19 and were unable to attend hearing notices.”
The KTBA believes such actions of passing ex-parte orders are totally against the spirit of facilitation and will be detrimental to the image of FBR. “Additionally, passing of such orders will not achieve any objective but would not also stand test of appeals.”
The tax bar demanded the FBR of equity and fairness and urged the Member to direct field formations to refrain from passing orders where ARs / taxpayers have requested for adjournments and are isolated due to Covid-19 cases.
The Member has also been urged to direct the field formations to recall all such orders passed ex-parte in the absence of taxpayer/ARs by taking recourse of Section 122A of Income Tax Ordinance, 2001 and Section 45A of Sales Tax Act, 1990 and oblige.
As aware, coronavirus (Covid-19) pandemic has hindered the mobility of people severely across the world who now largely prefer to work/liaise online due to health reasons.
Pakistan is no exception and is currently experiencing a second wave of this malaise. Keeping in view of the rising trend Covid-19 cases, provincial governments have already issued SOPs to minimize/limit social contact and to stop the spread of Covid-19 cases.
It is worth mentioning have that the Government has very recently directed that 50 percent of the office staff shall work from home as the Covid-19 cases are rising rapidly.
The tax bar also invited the Member’s attention that presently all the members of KTBA fraternity are heavily occupied in their National responsibility i.e. preparation and filing of tax returns for the Tax Year 2020.
In this situation issuance of notices (audit, monitoring, amendments etc.) with a very short compliance date is against the principles of natural justice and fair play.
It is also worth mentioning to add that Chief Commissioners Inland Revenue at Karachi had assured of their fullest cooperation and vowed to take immediate all the remedial action in the event of any mishandling for which we are grateful.
The KTBA urged the Member to direct the field formations to strictly follow SOPs issued by the government to combat the spread of Covid-19 and also direct the officers to suspend issuance of all notices till December 08, 2020 (last date of filing of returns) and where ex-parte orders have been passed (where intimation / adjournments were available) recall such orders.
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KTBA demands time relief for submitting annexures H, F
KARACHI: Karachi Tax Bar Association (KTBA) on Wednesday demanded the tax authorities to condone time-limit for submitting annexures ‘H’ and ‘F’ of monthly returns for claiming sales tax refunds.
The tax bar in a letter to Member Inland Revenue (Operation) of Federal Board of Revenue (FBR), said that a large number of taxpayers had failed to rectify the details of their stock position through annexure ‘H’ and value addition through annexure ‘F’. Due to this sales tax refund was stuck up since July 2019.
The tax bar urged the tax authorities to grant general condonation of 60-day time to taxpayers for filing revised annexures ‘H’ and ‘F’ of sales tax returns related to tax periods from July 2019 onwards to e-file pending refunds claims.
In a letter sent to the Dr Muhammad Ashfaq Ahmed, Member IR (Operations), KTBA appreciated the efforts of the FBR to ensure speedy liquidation of sales tax refunds in consonance with Prime Minister’s Covid -19 Relief Package.
The tax bar highlighted that due to prolonged pendency, there were anomalies in annexures F and H and gaps and contradictions in its supporting documents had rendered a sizeable quantum of refund claims pending with the FBR, and all such taxpayers required to file revised Annexures F and H from July 2019 on a sequential basis.
Although the Commissioner Inland Revenue empowered to condone such cases under section 74 of the Sales tax Act 1990 but the KTBA sought a general condonation and extension of time limit.
The KTBA said that it would help the taxpayers to file annexures F and H without wastage of time.
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KTBA highlights problems in FBR’s online correspondence system
KARACHI: Karachi Tax Bar Association (KTBA) on Tuesday pointed out various problems in the online correspondence and notice system of the Federal Board of Revenue (FBR).
Muhammad Zeeshan Merchant, President, KTBA sent a letter to Dr. Muhammad Ashfaq Ahemd, Member Inland Revenue (Operations) for early removal of difficulties to facilitate taxpayers.
The tax bar held a meeting on October 17, 2020 with the Member IR Operations and discussed the issues. The Member had asked the tax bar to identify and submit a brief list of issues being faced by the taxpayers in general in respect of IRIS notice and subsequent correspondence.
The tax bar in its instant letter said that the mechanism for online correspondence available on the IRIS web portal for the compliances of Income Tax audits / assessments, covers the whole catena of proceedings, right from the issuance of notices, show cause notices to the final assessment order / notice of tax demand takes place on the above given online web portal of the FBR. This has been in vogue from the Tax Year 2014 and onwards.
The KTBA identified following issues in the online correspondence system of the FBR:
1) NEW NOTICE / CORRESPONDENCE:
Presently, as per the applicable features of the web portal, all the notices and new correspondence from the tax authorities are expected to appear under Tab / Caption “Inbox”.
As soon as any online notice / correspondence is made available in the inbox of the taxpayer online ID, it is expected that a separate intimation is issued to notify the development through SMS on the registered cell phone number and on the registered Email ID of the taxpayer. Although, this procedure is being followed in some cases, however, we expect that the same should be followed in all the cases.
2) FOLLOW-UP NOTICE / ASSIGNMENT / CORRESPONDENCE:
As mentioned above, the Email and SMS are being sent in some cases where fresh/new notices are issued, however, this feature of notification through SMS and Email is apparently limited to the development made through inbox only, which means that any subsequent development made by the tax officer through creation of task assignment feature or otherwise, is not presently being notified through SMS and Email.
The absence of this notification, understandably, is creating a severe hardship to the taxpayers and the same is actually resulting in hindrance in ensuring the requisite timely compliance of these notices including but not limited to show-cause notices.
Based on recent experiences of both KTBA Members and the taxpayers, the date of compliance of notice is generally fixed through assignment of notice (i.e. without any notification through SMS, Email and Registered Post/Courier) instead of a notice / letter in inbox, which has resulted eventually in completely unwarranted ex-parte orders in certain cases.
The tax bar said that the issue can be resolved conveniently if all the correspondence are made by the concerned tax officers mandatorily through inbox feature with a proper notification to the taxpayer through SMS, Email and Registered Post/Courier or if a similar feature of notification through SMS and Email is linked to the assignment of notice as well and there must be a pop-up window with “New Correspondence Available” with link of the destination mentioned in the pop-up window.
3) CREATION OF NEW TASK IN ASSIGNMENT IS NOT AVAILABLE NOW WHICH PREVIOUSLY WAS AVAILABLE:
Recently, we have noted that under the “Assignment Tab” of follow-up correspondence, although there is an option for the taxpayers to reply, however, the new task could not be created which is resulting in non-compliance on IRIS system. The taxpayers are then compelled to submit a manual reply which is causing hindrance and the compliance does not reach to the concerned tax officer in time.
Similarly, there is no option of partial compliance in the IRIS system. Presently, there is an option for adjournment or reply only, which sometimes creates problems in making compliances in a phased-wise manner for the taxpayers.
4) ATTACHMENT – FILE SIZE AND FILE FORMAT:
Another limitation which is generally being faced while e-filing the online response on the web portal is that the attachment size cannot exceed 5 MB file size (for a single file). Further, JPEG or any editable file format can only be attached on the web portal while filing a response through a assignment tab which means that other format (including PDF) cannot be attached. The said limitation are creating nuisance to the taxpayers.
5) ONLINE SUBMISSION VIA ASSIGNMENT TASK
Presently, there is no separate “submit button” available for submission of online response via assignment tab on the web portal. The response through assignment tab is submitted as soon as the response is saved online on the web portal, which creating nuisance to the taxpayers.
6) CORRESPONDENCE IS NOT REACHING TO THE CONCERNED TAX OFFICER ON IRIS
The bar members informed the tax bar that the reply submitted online on the IRIS web portal in response to a notice issued by a particular tax officer is delivered to another tax officer on the web portal due to certain technical issue. Thus, the compliance of the notice is apparently not reaching to the relevant tax officer for review and perusal. The same is resulting in an unnecessary hassle to the taxpayers and an uncertainty regarding the compliance of the notice.
SOLUTION / RECOMMENDATION:
Keeping in view the severity of the aforementioned grave issues and the resulting adverse consequences to the taxpayers, the KTBA urged the Member to urgently intervene and issue necessary instructions to all the tax offices for issuance of all the correspondence (including notice / letter) exclusively through inbox feature only with a mandatory intimation to the taxpayer through SMS, registered Email and registered post/courier.
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KTBA demands date extension for filing sales tax return
KARACHI: Federal Board of Revenue (FBR) has been informed that many taxpayers were unable to file their sales tax returns for September 2020 as FBR’s web-portal was stopped functioning.
Muhammad Zeeshan Merchant, President, Karachi Tax Bar Association (KTBA) in a letter on Monday apprised Muhammad Javed Ghani, Chairman, FBR about the malfunctioning of FBR’s web portal, which deprived many taxpayers in filing their sales tax returns for the period of September 2020.
The FBR chairman was informed that KTBA members had faced immense problems in e-filing the monthly sales tax return for the tax period of September 2020 which was due on October 18, 2020.
Merchant said that due to non-working of FBR web-portal for the last few days and it completely stopped functioning on Saturday October 17, 2020 and Sunday October 18, 2020.
The KTBA president also highlighted that many of the CPRs which were paid by using ADC-payment option were not reflecting in banks folders and consequently taxpayers were unable to upload their tax challans and therefore were unable to e-file the sales tax return for the tax period ‘September 2020’.
“Our members are also upset because they were not even in a position to apply for extension either manually or online as there is no provision available,” the KTBA president said.
The FBR chairman has been urged to extend the date of e-filing the monthly sales tax return for the tax period ‘September 2020’ at the earliest to facilitate bar members and the compliant taxpayer to fulfil their legal obligation properly.
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KTBA highlights return filing issues
The Karachi Tax Bar Association (KTBA) addressed significant challenges in filing income tax returns during a meeting with Dr. Muhammad Ashfaq, Member, Inland Revenue – Operations, on Saturday. The meeting aimed to shed light on the difficulties encountered by taxpayers and tax consultants while using the online tax filing system.
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KTBA advises FBR to update tax laws on its website
KARACHI: Federal Board of Revenue (FBR) has been advised to update tax laws with latest amendments on its official website to facilitate taxpayers as well as tax practitioners.
The Karachi Tax Bar Association (KTBA) in a letter to FBR Chairman Muhammad Javed Ghani on Tuesday pointed out that the available tax laws such as income tax, sales tax, federal excise and customs are not updated and required to insert latest amendments made through Finance Acts or other legislations.
In the letter, KTBA President Zeeshan Merchant said that FBR had provided soft copies of certain tax laws on its official website i.e. fbr.gov.pk for the facilitation of taxpayers as well as tax practitioners.
Merchant invited attention of the FBR chairman towards the fact that the important tax laws had been frequently amended and updated in the recent past through budgetary and other amendments. “However, it has been observed that the income tax laws as well as sales tax, federal excise and customs duty laws, which were available on the website of the FBR, have not yet been updated to incorporate such recent amendments.”
Since up to date tax laws are presently not available on the website, the same may lead to an inadvertent mistake by the taxpayer while ensuring compliance to the relevant provisions of law.
KTBA president said that the taxpayers should apply correct, up to date and valid laws in its true letter and spirit in order to be a compliant taxpayer.
The FBR chairman has been urged to issue necessary instructions for the updating the important direct and indirect tax laws which are available on the FBR’s website.
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KTBA demands time for return filing as per law
KARACHI: The Karachi Tax Bar Association (KTBA) on Monday demanded the Federal Board of Revenue (FBR) to allow extension for filing income tax return for tax year 2020 as per time prescribed under the law.
In a letter send to FBR chairman, Zeeshan Merchant, President, KTBA praised the FBR for issuing return of income for business, salaried individuals, AOPs and companies concurrently via Notification dated September 08, 2020.
Additionally simplified return of income for retailer/traders has also been notified per Notification dated September 17, 2020.
Consequently in line with Section 118(2) and (3) of Income Tax Ordinance 2001 the time prescribed/suggested for filing return in case of a company is 180 days and in other cases is 90 days from the date the relevant amendments have been incorporated in the return of income officially.
Merchant said that the media campaign launched by the FBR pressing people to file their return of income by due date i.e. September 30, 2020.
“The BAR members have however quested the soundness of FBR’s media campaign which otherwise represents September 30, 2020 as last date for filing return of income in tax year 2020,” the KTBA president said, and asked the FBR chairman to allow taxpayers and tax professionals to file return of income in tandem with law.
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Zeeshan Merchant elected unopposed KTBA president
KARACHI: The office bearers and members of executive committee have been elected unopposed for the term 2020 in the election of Karachi Tax Bar Association (KTBA). This was announced at 63rd Annual General Meeting (AGM) of the bar held on Thursday.
All the candidates for the KTBA elections have been elected unopposed. The AGM announced the successful candidates as: Syed Zeeshan Merchant, President; Syed Hassan Naeem, Vice President; Syed Faiq Raza Rizvi, General Secretary; Muhammad Mehmood Bikiya, Joint Secretary; and Shiraz Khan as librarian.
The managing committee of the KTBA includes: Arshad Siraj, Asim Rizwani Sheikh, Haris Tufail, Imran A. Karim, Imran Hyder, Irfan Ghafoor, Muhammad Yasin Merchant and Syed Wasimuddin Hashmi.
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KTBA advises FBR to suspend notices amid alarming rise in COVID cases
KARACHI: Karachi Tax Bar Association (KTBA) has advised Federal Board of Revenue (FBR) to suspend notices for various tax matters with immediate effect considering the alarming increase in cases of COVID-19 in the country.
The KTBA in a letter to FBR chairperson sent on Friday, informed that the bar members were receiving notices issued by the tax officials right in the month of June when the COVID-19 pandemic was in its worst phase in the country, and the city of Karachi is passing through its hardest times.
The grim situation at hand, in terms of helplessness and number of deaths of both taxpayers and the tax officers, cannot possibly be remained devoid of any mindful sight.
It is rather what today has the fullest attention of everyone concerned and the FBR as the tax regulator cannot simply be an exception. It cannot keep shooting notices mindlessly to the taxpayers for tax compliance when the taxpayers or their counselors cannot even reach their offices these days. The Bar equally feels compassionately about officers. “You must be aware of the deaths of tax officials posted at LTU, Karachi and at Regional Tax Office, Karachi due to Coronavirus.”
Around 160,000 coronavirus positive cases have been registered in the country out of which, almost 55,000 are in Sindh. Among the cities of Sindh, Karachi is at the top with 45,000 plus cases.
Keeping the above in view, the number of notices being issued these days is beyond ones comprehension. The members, like other service providers (shops, markets and manufacturing units are an exception), are largely not operating from their offices and are working from home, which has its own limitations. As such, in these testing times, it is not humanly possible for our members to respond to the notices issued for various proceedings discuss below.
Even otherwise responding to these notices is not possible without provision of details/ information by clients/ taxpayers who are also suffering from the short comings discussed above. On the other hand, IRIS still has its own limitations.
Any assignment created especially in ‘completed tasks’ cannot be replied via IRIS. Even if a notice can be responded to via IRIS, attachments containing details beyond a specific size are not acceptable by IRIS i.e. not every notice can be responded to via IRIS.
This would mean that bar members have to come to the tax office for making the compliance. Under the present scenario of infections (tax offices are not immune from this), this poses a great threat for the visitors.
What has been observed that as a matter of fact, the notices, which are being issued can broadly been categorized under the following categories:
(i) Audit notices for the Tax Years 2015 to 2019
(ii) Audit notices for the TY 2014 including notices for making amendment under section 122(5) of the Income Tax Ordinance, 2001
(iii) Monitoring of withholding tax
(iv) Set-aside proceedings
(v) Appeal effect proceedings
For Audit notices relating to the Tax Years 2015 to 2019, the bar is of the view that there should not arise any issue of getting barred due to any time limitation. As such, these proceedings can well be taken up at a later stage as well, say after two to three months when gravity of the spread of Coronavirus will be subsided.
The notices for monitoring of withholding tax are again not poised with any time limitation issue.
As for the notices related to the set aside and appeal effect proceedings, it would be advisable to seek an advice from the Ministry of Law as to any possible waiver from the application of calculation of limitation period under the Income Tax Ordinance, 2001 read with Section 4 of the Limitation Act, 1908 for these extra ordinary days; alternatively, some moratorium should be asked for. This will be in utter necessity for saving precious lives from any jeopardy due to any insensitivity.
The tax bar urged the FBR to suspend the notices at least till the end of July 2020. Further that no adverse action would be taken on the notices already issued.
This is acutely necessary to defuse the tension in the atmosphere and for instilling the much-needed confidence in the taxpayers of the country towards the single most pivotal federal tax regulator of the country.