Deduction of WHT by freezing bank accounts: FBR to allow another chance to DMCs to file appeals

Federal Board of Revenue (FBR) has decided to allow another chance to District Municipal Corporations (DMCs) for filing appeals against the order of the Regional Tax Office (RTO)-III; it was learnt. According to sources, the RTO-III, which had taken up this issue in December 2015 and attached 32 bank accounts of DMCs and recovered Rs 750 million on account of withholding tax on the payments of its contractors, had now been directed by the member IR operation Dr Muhammad Irshad to exercise the power of section 214-A of the Income Tax Ordinance 2001 to allow DMCs for filing appeal against the order.
To a question, the sources said that DMCs were pressurising the FBR for refunding the said amount, which had been deposited to the national exchequer. They said that member policy -IR had ordered the RTO-III to give DMCs another chance for filing an appeal against the order under section 214-A of the ordinance 2001. Moreover, they said that if they successfully clarified their position through appeal then the whole recovered amount would be refunded.
They said that the RTO-III had presently de-frozen 10 bank accounts of two DMCs - Central and West while the rest of 22 bank accounts were still attached. Needless to mention, the action was taken to recover withholding tax amounting to Rs 950 million, which have been pending since 2014-15. In response to the said action, DMCs has not only dumped tones of garbage in front of FBR office located at Gulistan-e-Johar but also putting political pressure on FBR to get the frozen bank accounts restored.
Meanwhile, sources in FBR said that provincial minister for local body was actively pursuing the case and approached finance minister Ishaq Dar and chairman FBR to revert RTO-III action. They said that FBR had been directed to find legal way to resolve the issue and the directives of member IR to allow DMCs for filing appeal against RTO-III order was aimed at giving relief to them, which were presently not in a position to pay salaries to the workers after said action by the tax office.