The Federal Board of Revenue (FBR) has categorically said that it would not disclose risk parameters used for selection of income tax cases for audit for the Tax Year 2015. In a clarification, the FBR has also stated that the cases selected for audit for the Tax Year 2014 can again be selected for Tax Year 2015 as there is no bar in Audit Policy, 2016.
According to a clarification issued by the FBR on Audit Policy 2016 Friday, Taxpayers' Audit Wing, FBR, has received numerous representations regarding Audit Policy 2016. Most of the representations involve similar issues. It is clarified that as per subsection (IA) of the section 214C of the Income Tax Ordinance, 2001, the FBR will keep parameters confidential. Therefore, risk parameters used for selection of Income Tax Cases for audit for Tax Year 2015 cannot be disclosed.
Cases selected for audit for Tax Year 2014 can also be selected for Tax Year 2015 as there is no bar in Audit Policy, 2016. In case of any clarification on the Audit Policy 2016, it is requested to contact the FBR, the letter added. An expert told Business Recorder that the audit policy for the Tax Year 2015 was challenged in Lahore High Court (LHC). When challenged, the court directed the tax department to tell taxpayers basis/parameters for selection of their cases for audit. To clarify its position, the Board issued a letter that subsection (IA) of the section 214C of the Income Tax Ordinance, 2001 allows the FBR to keep parameters confidential.
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