Section 214-D: experts see no benefit of prospective amendment to IT Ordinance 2001

The proposed amendment in the Income Tax Ordinance 2001 to delete section 214-D should be retrospective through Finance Bill 2018 to exclude all pending cases automatically selected for audit due to late e-filing of returns because the prospective withdrawal of said section will not serve any purpose unless past cases have been withdrawn from the said provision of the law.
Tax experts said that if the government abolish section 214-D of the Income Tax Ordinance, it remains to be seen whether the amendment would be made retrospectively or prospectively. The question arises whether the Parliament would allow retrospective amendment in the Income Tax Ordinance 2001 to delete cases selected during the last few years under section 214-D of Income Tax Ordinance, 2001. It is important aspect because prospective withdrawal of section 214-D of Income Tax Ordinance, 2001 would not serve any purpose unless past cases are withdrawn from the said provision of the law.
Recently, Special Assistant to the Prime Minister on Revenue Haroon Akhtar has said the government was considering scrapping Section 214-D of the Income Tax Ordinance, which was the main reason behind majority of over 925,000 pending cases.
Under section 214-D of Income Tax Ordinance, 2001, the cases would be selected automatically over late e-filing of returns for audit under the aforesaid section. The provision would be applicable for late filers who would file returns from December 16 onwards.
Tax Reform Implementation Committee (TRIC) has already recommended that the Finance Bill 2018 may amend section 214-D (automatic selection for audit) of the Income Tax Ordinance 2001 to implement a comprehensive risk-based audit framework based on data matching principles.
It was decided that the section 214-D of the Ordinance would be revisited in the upcoming budget in view of the burgeoning pendency of audit cases due to automatic selection of late-filers for audit.