ISLAMABAD: The officers of Federal Board of Revenue (FBR) have been empowered to make arrest in cases where income has been concealed.
In this regard amendment has been proposed to the Income Tax Ordinance, 2001 through Finance Bill, 2021.
In its commentary on budget 2021/2022, PwC A. F. Ferguson & Co. Chartered Accountants said that the term ‘concealment of income’ is proposed to be introduced to include (a) suppression of any item of receipt liable to tax in whole or in part, or failure to disclose income chargeable to tax; (b) claiming any deduction or any expenditure not actually incurred; and (c) any act referred to in sub-section (1) of section 111.
An explanation has also been added to clarify that where any item of receipt declared by the taxpayer is claimed as exempt from tax, or where any deduction in respect of any expenditure is claimed, mere disallowance of such claim shall not constitute concealment of income or the furnishing of inaccurate particulars of income, unless it is proved that the taxpayer deliberately claimed exemption from tax in respect of the aforesaid item of receipt or claimed deduction in respect of such expenditure not actually incurred by him.
The above definition is relevant for proposed provisions 203A to 203H relating to powers of an authorised officer, to arrest any person who, on the basis of material evidence, is believed to have committed such offence.
Detailed provisions are proposed for procedural and other aspects relating to such powers. In order to curb the potential abuse of such powers, there is a need to rationalize the provisions including a certain approval / adjudication process where after the provisions could be applied.