The desk-audit of income tax returns has detected huge revenue loss of Rs 452.321 million, showing corporate sector's failure to deposit four equal quarterly instalments of advance tax under Income Tax Ordinance, 2001.
Sources told Business Recorder on Thursday that the income tax department had conducted desk-audit of returns for the tax years 2003, 2004, and 2005 to ascertain whether the taxpayers were paying their admitted liability under section 147 of the Income Tax Ordinance, 2001 in the prescribed time limit or not.
The FBR has found that taxpayers particularly companies have not paid the advance tax under section 147 in four equal quarterly instalments. The non-payment of advance tax attracted additional tax, but there is no proper mechanism in place to check this irregularity.
Sources said that the department needed verification of advance tax payment under section 147 of the Ordinance as well as liability under section 137 of the Ordinance.
For this purpose, desk-audit of thousands of income tax returns was conducted during 2006-07. It was a gigantic task to scrutinise data of returns in the absence of an authentic system within the income tax department. The department has submitted the final report to the FBR in December 2007, pinpointing towards serious violations of section 147 of the Ordinance 2001.
As a result of this exercise, it has been found that board has suffered revenue loss of Rs 452.321 million due to violations of sections 147 and 137 of the Ordinance. It is important to mention that the revenue loss merely reflected desk-audit of selected returns during the past few years.
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