The Federal Board of Revenue has yet to issue the relevant statutory regulatory order (SRO) for granting 15 days period for obtaining views on the draft income tax returns for Association of Persons (AOPs) individuals and corporate sector for the Tax Year 2010.
Legal experts told Business Recorder here on Saturday that the FBR has placed the draft of the new return on its website for comments. The final returns are expected to be issued on August 20, but the SRO to give time period for obtaining comments of the stakeholders has not been issued by the board.
The FBR has not issued the amendment in the Income Tax Rules, 2002 through an SRO which is necessary under section 237 of the Income Tax Ordinance 2001. As per section 237 of the Ordinance 2001, the Board may, by notification in the official Gazette, make rules for carrying out the purposes of this Ordinance. Legally, it is a requirement to issue the SRO to publish the draft of the return for the information of all persons likely to be affected hence notice has to be issued that the draft shall be taken into consideration after specified days of its publication in the official Gazette. The SRO also mentions that any objection or suggestion, which may be received from any person, in respect of the said draft before the expiry of the deadline, shall be considered by the board.
Under the General Clauses Act, amendment in the rule or amendment in any new rule must be circulated for public opinion for specific period. General Clauses Act further said that the publication shall be made in such manner as that authority deems to be sufficient, or, if the condition with respect to previous publication so requires, in such manner as the (Government concerned) prescribed. There shall be published with the draft a notice specifying a date on after which the draft will be taken into consideration, it added.
So far, the FBR has not issued the said SRO, which is a legal requirement under the General Clauses Act. Resultantly, the new income tax returns may be challenged in the courts in the absence of the relevant SRO. How the FBR can notify the return without giving time period for comments under the amendments in the Income Tax Rules? Experts raised a question.
When contacted, another expert opined that the draft of the returns have been placed on the FBR website for comments. In the era of information technology (IT), it is not necessary to issue the draft for a period of 7-15 days. The stakeholders can submit their comments on the draft within 4-5 days electronically. Therefore, draft could be finalised in few days in view of recent advancements in the IT. The electronic communication between the FBR and the taxpayers not only save time, but also reduce direct interaction between the department and the taxpayer, he added.