LAHORE: Concurrent tax notices for assessment and audit, issued simultaneously by assistant, deputy and additional commissioners of income tax have irked taxpayers by and large, running from one office to another with similar replies to face an unending thread of inquiries.
According to sources, taxpayers, particularly the private limited companies, are confused over the situation as to why the notices of similar nature are being served to them from the higher authorities and their subordinates.
They said relevant provisions of the law are being massively misused by the tax officials. Despite the fact that law requires relief to the taxpayers at the forum of additional commissioners, 90 percent of them are also focused on issuing assessment notices then to inquire their subordinates for the issuance of unnecessary assessment and audit notices.
The field formations have turned into clusters for functional division of work instead of treating their taxpayers on the basis of territorial division, said official sources. It may be noted that scope of inquiries under section 122(5A) of the Ordinance has been a bone of contention since 2001 when the said amendment was incorporated to the law.
The superior courts have held through a number of reported case laws that the scope of section 66A (now 122(5A)) is limited and cannot be stretched to conduct fishing and roving inquiries or investigations.
Tax experts have pointed out that the Finance Act 2012 had attempted to change this position and tried to expand the scope of the relevant law by allowing Commissioner to conduct inquiries. Subsequent to Finance Act 2012, they added, a number of notices were issued to the taxpayers requiring details, information and documents in a manner that proceedings under the law almost became identical to audit proceedings, they added.
They said the purpose of amendment in the law was to enable additional commissioners to make or cause to make inquiry does not mean that he could make inquiry from the taxpayer.
However, instead of making independent inquiries at their own to favour the taxpayers, they have also embarked upon issuing the notice. The said making inquiries or seeking information, details, documents and record from the tax payer was against the spirit of law.
Meanwhile, the departmental sources said empowering the additional commissioners to issue assessment notices has defeated the element of relief altogether and it has opened up a window of corruption. They said the Federal Board of Revenue (FBR) should make sure that the additional commissioners should use the law in favour of taxpayers while holding their subordinates for initiating uncalled for inquiries.
Copyright Business Recorder, 2022
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