Section 218 of Income Tax Ordinance, 2001: KTBA asks FBR to withdraw clarification about services of notices, other documents

KARACHI: The Karachi Tax Bar Association (KTBA) has requested the Federal Board of Revenue (FBR) to withdraw the clarification regarding services of notices and other documents under section 218 of the Income Tax Ordinance, 2001.

In a letter sent to the chairman FBR, the KTBA showed grave concern upon withdrawal of FBR's earlier clarification of February 22, 2018 and restricted the entire mechanism of service of notices and other documents to only one mode which is electronic service.

It termed it as unrealistic and unpleasant, saying that the board had completely ignored the mode or method of "personally served" for the cases of resident individual taxpayers and "personally served on the representative of the person" for the other taxpayers as provided in clause (a) of sub-section (1) of section 218 and clause (a) sub-section (2) of section 218 of the Ordinance respectively and by putting all its weight on only one clause i.e. clause (d) of both the said sub-sections providing for electronically mode of service and also completely ignoring the presence of clauses (b) of both the said sub-sections of section 218 appearing in the Ordinance.

The KTBA further said that the earlier clarification issued by FBR on February 22, 2018 was a material of good reading of the statute and was very much in accordance with the law while the new clarification issued by FBR after the lapse of almost three years, on February 03, 2021 was a result of bad reading of statute, which was not in accordance with the law.

It said that this amendment would tarnish the image of FBR and would not only be counterproductive but detrimental as well and added that it was very much clear in the law that any notice, order or requisition that required to be served on a taxpayer should be served in two ways - it should be personally served on the taxpayer; and it should either be sent by registered post/courier or service of summons or electronically in the prescribed manner.

Therefore, the KTBA has requested the FBR to withdraw the new and harsh clarification issued on February 03, 2021 and restore the earlier clarification of February 22, 2018 to facilitate the taxpayer at optimum level.

Copyright Business Recorder, 2021