LAHORE: Federal Tax Ombudsman (FTO) Dr Asif Mahmood Jah has directed the Information Technology (IT) wing of the Federal Board of Revenue (FBR) to review IRIS application to ensure that the system should not allow completion of audit/assessment in cases where returns are incomplete.
He also sought an immediate implementation of system based scrutiny of returns at least at the Large Tax Offices (LTOs) and Corporate Tax Offices (CTOs), identify short of documents cases, generate necessary notices, and maintain updated profile for all concerned officers and invalidate incomplete returns.
He said the FBR has organized LTOs/CTOs on functional lines whereby different functions are performed by different dedicated zones - audit, enforcement and legal etc. He added that this scheme is the cornerstone of tax reforms implemented by the FBR but a number of tax cases indicate glaring pitfalls in the implementation of this functional scheme.
He lamented that almost all tax returns are being filed without notes, which is an integral part of mandatory audited accounts. This trend indicates perpetual filing of incomplete tax returns, he stressed.
According to him, it has been found in a number of cases that mandatory audit notes were not submitted electronically as required under the relevant rules. This situation was resulting into the department was declaring already assessed returns as incomplete after a lapse of multiple years simply to block taxpayers’ legal and admissible refunds.
The FTO has maintained that both the LTOs and CTOs claim that tax returns are examined and scrutinized through desk audit, followed by segregation of incomplete returns, yet the position is altogether different on ground. Non-compliance of stereo type notices are not monitored by the department, he added.
He said a number of taxpayers are approaching his office against the departmental harassment, violations of protocols, Standard Operating Procedures (SOPs) and fiscal laws while misusing the authority. Taxpayers have a concerted opinion that the department was involved in undue harassment with a design to block their legal and admissible refunds.
The FTO has observed that tax records exhibited before him reveal that maladministration was embedded in routine neglect, inattention, delay and incompetence of departmental functionaries and in the administration and discharge of duties and responsibilities at the LTOs and CTOs.
In a recent decision, the FTO has directed the FBR to withdraw such a notice while declaring it illegal as a prior order has already validated the return.
He has directed the IT wing to also ensure that indiscreet notices are not issued by the enforcement officers for tax years where audit and assessment proceedings were already completed and finalized. He has also sought system based scrutiny of returns.
Copyright Business Recorder, 2023
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