The salaried individuals and commercial importers, exporters, suppliers, contractors, commission income earners, commission agents, CNG sector, owners of petroleum pumps, recipients of banks interest, etc, are desperately waiting for new income tax return and statement forms for Tax Year 2011 to be filed on or before the deadline of August 31, 2011.
Waheed Shahzad Butt, a renowned legal expert on taxation matters told Business Recorder Wednesday that the last date for electronic filing of income tax returns and statements by certain categories of taxpayers is August 31, 2011. So far, the FBR has not notified new return as well as statement forms creating serious problems for the persons liable to follow the deadline of August 31, 2011.
As per provisions of Sub section (3) of section 118 of the Income Tax Ordinance, 2001 the deadline for furnishing of income return through eFBR web portal in the case of salaried person and statement of tax required under sub-section (4) of section 115 of the Income Tax Ordinance, 2001 is August 31, 2011. The FBR has made it mandatory for certain categories of taxpayers to fulfil their legal obligation by filing their income tax returns electronically through eFBR Web Portal, while till date tax return for Tax Year 2011 is not available for electronic filing, therefore, persons liable to file returns electronically and willing to file the same now, cannot fulfil their obligation due to failure/deficiency on the part of FBR/eFBR/Pral.
Lahore-based tax lawyer said that the FBR has failed to upload income tax return format on its E-portal websites FBR/eFBR/Pral since April 13, 2011 when the draft of tax returns for Tax Year 2011 was first issued. Later another SRO was issued on August 08, 2011 without intimating the fate of earlier tax returns announced through SRO dated April 13, 2011. Though FBR had circulated the draft of the proposed return few months back, but the final tax return has not been issued due to unknown reasons. Apparently, the FBR functionaries were unable to devise the tax return covering each and every aspect of taxation of income under all heads and thereon computing correct income tax as per provisions of the Income Tax Ordinance, 2001, in each and every proposed form anomalies were pointed out. He pointed out that the electronically filed income tax returns and statements are necessary for salaried persons, persons registered with the sales tax department and refund claimants, etc.
Waheed said that it is interesting to note that the issue of devising correct income tax return for Tax Year 2010 is also pending at FBR for which specific recommendations have already been made by the Honourable Federal Tax Ombudsman in complaint C.NO. 719/LHR/I.T.(594)/1258/2010. Following recommendations were issued by FTO under section 11(1) of the FTO Ordinance, 2000:
(i) ensure that apparent defects in the electronic return placed on the FBR web portal are removed so that tax payable is correctly worked out when all the fields are filled out;
(ii) issue appropriate instructions for retrieval of any revenue lost in services sector Returns filed up to October, 2010; Similarly as per provisions of Income Tax Ordinance, 2001 all taxpayers whose business year closes on 30th day of September 2010 and 31st day of December 2010 like sugar industries, some permanent establishments of Non-Resident or Banking Companies etc, who are interested to fulfil their legal obligation in filing of income tax returns for Tax Year 2011, cannot file the same by using FBR Web-Portal solely due to fault by FBR to devise correct income tax return form, tax lawyer said.
Till today FBR has not yet notified/uploaded the format of income tax return for Tax Year 2011. Similarly in case of taxpayers having status of Individual/AOP are also obliged to fulfil their obligation to submit return for the financial years which closed on June 30, 2011 but return form for such categories of taxpayers is also absent from the FBR web portal.
Due to failure on the part of FBR, taxpayers liable to file tax returns electronically cannot fulfil their legal obligations. Resultantly, taxpayers cannot discharge their responsibility under the prevailing circumstances because the return for tax year 2011 is not available at the FBR/eFBR/Pral web portal. Presently, there is no provision available on the FBR Web Portal to select the Tax Year 2011 for filing of income tax returns, Waheed added.