The Federal Board of Revenue has started selecting cases for audit for Tax Year 2013 under section 177 of Income Tax Ordinance, 2001, it is learnt on Monday. According to sources, taxpayers are facing immense difficulties following phone calls from the tax department asking them to appear before concerned commissioners for audit.
They said there were reports concerned commissioners were using powers to 'harass' taxpayers through audit notices. They added that several audit notices had already been withdrawn by concerned commissioners against undue gains. "This is tantamount to harassment which is not expected to be done either by the commissioners or the FBR," sources said. When contacted, Ali A Rahim, former president, Karachi Tax Bar Association confirmed that taxpayers were receiving audit notices for Tax Year 2013 under section 177 of Income Tax Ordinance, 2001.
He said: "After the induction of section 214C of the Income Tax Ordinance, 2001 through Finance Act, 2010 power to select the case for audit rests only with the FBR." He said section 177 of the Income Tax Ordinance, 2001 was subservient to section 214C, hence the substantive power to select a person for audit was provided in section 214C and the provision providing procedure for conducting the audit was in section 177.
He said no computerised random balloting had so far been carried out for the audit for Tax Year 2013, which was a mandatory requirement for selecting cases for audit. However, the relevant commissioners are presently misusing powers and selecting cases for audit for the said tax year under section 177 of Income Tax Ordinance, 2001, he maintained. Moreover, he said taxpayers would first be selected for audit under section 2l4C by the FBR and only then the commissioner would conduct its audit in accordance with the procedure given in section 177. He urged the chairman FBR to look into the matter and take appropriate measures to provide relief to taxpayers.
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