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Tax officials’ power to select income tax return for audit should be withdrawn

KARACHI: Tax practitioners have recommended that the selection of income tax returns for audit should be rest only with the Federal Board of Revenue (FBR) and powers of commissioner in this regard should be withdrawn.

“The power to select the return of income may rest only with the FBR under Section 214C of the Ordinance,” according to proposals for budget 2020/2021 submitted by Pakistan Tax Bar Association (PTBA).

There is a dire need to explain the two terms in section 122(5A) of the Ordinance so that the taxpayers are not harassed in the garb of returns being ‘erroneous’ and ‘prejudicial to the interest of revenue’.

The error of law or fact must be floating on the surface of the available record.

The time limit for amendment of assessment under section 122(4) of the Ordinance, 2001 be reduced to two years.

The commissioner once amend the original order should not have the powers amend the laws as many time as decided by him.

Moreover, the combined audit of income tax, sales tax and monitoring of withholding of taxes should be provided to unburden taxpayers from the exercise of producing the same records. This will also reduce cost of doing business.