Without rectifying the shortcomings in the faulty income tax return devised for Tax Year 2012, the Federal Board of Revenue closed the process of regular return filing by not extending last date beyond October 10, 2012.
A Lahore-based tax expert Waheed Shahzad Butt Advocate told Business Recorder here on Monday that though any taxpayer can file return at any point of time subject to payment of penalty and default surcharge, what will happen in case of prominent mistakes apparent in the faulty tax returns, as FBR has simply adopted the silence mode.
The FBR has not taken up some very crucial issues in the new return form. This is professional negligence on the part of the Board that without correcting anomalies in the tax return, filing process under regular mode has been closed. Whereas, threatening electronic messages have been issued to various taxpayers after the last extended date of 10.10.2012. It is also evident from the record that recommendations issued by Federal Tax Ombudsman (FTO) in C.No 1258/2010 regarding faulty tax return for Tax Year 2010 are still pending at FBR's end without any lawful excuse.
In this regards to avoid situation like TY-2010, a comprehensive write up was earlier forwarded to the Member Inland Revenue, FBR Islamabad by the tax expert on September 29, 2012 but to date neither any response has been received from FBR nor anomalies pointed out in the tax return have been rectified/removed, he said.
Expert further stated that taxation of services are liable to withholding tax under section 153(1)(b) of the Income Tax Ordinance @ one percent read with SRO 333(I)/2011 dated May 2, 2011 has not been taken into account in the wrongly devised tax return form. The FBR has not placed receipts of services sector under Minimum Tax Regime in light of Proviso (b) to sub-section 3 of section 153 of the Ordinance, 2001. This will create unnecessary litigation amongst the taxpayers and FBR for not disclosing the receipts liable to Minimum tax u/s 153 of the Ordinance.