The Federal Board of Revenue may suffer huge loss if the tax machinery fails to complete legal proceedings in thousands of cases which would become time-barred by June 30, 2011 and recovery would not be possible in such cases. In this connection, the FBR on Thursday issued instructions to the Chief Commissioners of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) to finalise all such cases before June 30, 2011 to avoid huge revenue loss.
The issue of the time-barred cases was discussed during the last Chief Commissioner Conference held on April 12, 2011 at the FBR Headquarters. According to sources, the tax officials have to complete assessments and other legal actions in different cases framed in the field formations. All these cases would become time-barred by June 30, 2011 in case timely action has not been taken by the tax officials. Once a case become time-barred, the FBR would not be in a position to conduct recovery proceedings against such time-barred cases. To avoid revenue loss, the FBR has asked the field formations to timely complete legal action in all such cases which would become time-barred by June 30, 2011. Otherwise, recovery would not be legally possible for the tax machinery, sources added.
If a case becomes time-barred, the tax official is not legally empowered to conduct income tax assessment of that case and subsequently unable to the recover the involved amount, sources added. During the last Chief Commissioner Conference, Sajjad Haider Khan, Director, Internal Audit pointed out huge revenue losses, which may be plugged in the interest of revenue generation.
The cases detected by the internal audit should be pursued for early recovery from the units, which would generate revenue. He also pointed out that there are cases which are going to be time barred on 30th June, 2011 which must be given top priority. The FBR Member Inland Revenue (IR) gave seven days to settle the time barred cases and collect the revenue before June 30, 2011.
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