FTO issues instructions to FBR: Field formations should not demand individual CPRs from taxpayers

ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) that the field formations should not demand individual computerised payment receipts (CPRs) from the taxpayers (withholdees) where bulk withholding payments are received from the banks and telecom companies.

According to the FTO’s instructions issued to the FBR, the FBR should direct Member lR (Operations) to issue necessary instructions to IR field formations to the effect that in cases (banks/Discos/telecom companies) where bulk withholding payments are received by the department, individual CPRs are neither generated nor should be demanded from the withholdees.

The FBR should also direct the concerned Commissioner-IR, Faisalabad to ensure that in line with similar cases credit of withholding tax is allowed to the taxpayer by rectifying the order u/s 1 22(5A) of the Ordinance for Tax Year 2010, as per law.

The details revealed that department sanctioned refund of Rs 1.410 million for Tax Year 2010 and remaining amount of Rs.0.043 million was rejected being no verified. Subsequently, complainant filed instant complaint against the rejection of Rs.0.043 million.

According to the Complainant, deduction was made u/s 231A by banks and he had the deduction certificate of the relevant banks. Complainant filed rectification application on November 30, 2023 before the tax department, but the department failed to do needful as per law.

On merits, it was contended that department issued refund of Rs 1.410 million

by passing order u/s 170(4) of the Income Tax Ordinance, 2001 after completing due verification of documents and certificates.

The FTO order stated that it is not practicable to enforce provisions of section 164 of the Income Tax Ordinance, 2001 in its literal meanings. Thus, currently payment of taxes made by millions of customers of banks, telecom companies and power distribution companies remains incompatible with the provisions of Section 164.

The departmental insistence in literal compliance of Section 164 is also plagued with glaring pitfalls as, while department readily accepts payments in bulk especially from Banks, its insistence on individual challans is self-contradictory.

The above discussion explained that the Tax department only misled itself into believing that verification of withholding tax supported by certificate and collateral evidence in bank account statement left anything to prove by the Complainant.

Examination of record provided that concerned bank duly verified and attested the certificate issue by it. Again, asking the taxpayer to go to appeal on such frivolous matter sounds callous. It is beyond any doubt that maladministration is involved and complainant has been subjected to wilful harassment, the FTO order added.

Copyright Business Recorder, 2024