USAS only for regular filers: FBR may propose change

The Federal Board of Revenue is planning to propose a major change in the Universal Self Assessment Scheme (USAS) of the Income Tax Ordinance 2001 by restricting the USAS to only regular filers of income tax returns/statements while non-filers should be excluded from the self-assessment scheme.
Sources told Business Recorder here on Saturday that the FBR is seriously considering a proposal to restrict the entire self-assessment scheme launched through an Ordinance in 2001 for those persons who file income tax returns on their own. According to the preliminary proposal, the USAS should only be limited to persons who are voluntarily filing their income tax returns.
However, the persons, who would file returns in response to notices, should not be considered under the self-assessment scheme. The returns filed in response to notices may not be considered as accepted under the self-assessment scheme. In such cases, the FBR may conduct assessments of such non-filers without accepting them under the USAS.
Sources said that if the proposal is accepted by the ministry of finance, the amendment in the Income Tax Ordinance would be introduced through the Finance Act 2011. However, this is a proposal, which is presently being considered at the level of the FBR.
If such proposals are finalised, the persons, who are reluctant to timely file their income tax returns would be excluded from the self- assessment scheme. Presently, the returns filed in response to notices are accepted under the self-assessment schemes. On the other hand, there is no specific restriction on the late filers of returns under the USAS. The main rationale behind this proposal is that if a person is not compliant under the self assessment scheme, he should be excluded from the USAS and return should not be automatically accepted by the tax department.
When contacted, a tax expert said that the FBR has to introduce an amendment in section 120 of the Income Tax Ordinance 2001 for making such change in the self-assessment scheme. Presently, the provisions of section 120 of the Income Tax Ordinance 2001 stipulate that the moment return of income is filed by the taxpayer whether on his own or in response to notice to file a return, the sane shall be treated to be an assessment order passed by the commissioner.
Apparently, it is proposed that the treatment of returns as an assessment order should only be allowed to those taxpayers who file the return on their own within the specified period ie in case of individual on or before September 30th of each year.
For a taxpayer who is not filing return on his own and is called by the commissioner to file his tax return, the said return should not deem to be an assessment order but treated as return of income on which the assessment order would be passed by the assessing officer after considering the information necessary, expert added.