Large Tax-payer Units (LTUs) and Regional Tax Offices (RTOs) have started imposing penalty on non-filers of income tax returns (Tax Year 2011) where date of filing of returns has expired on November 30, 2011. Sources told Business Recorder here on Friday that the field formations of the Federal Board of Revenue have started legal action against the non-filers of income tax returns for Tax Year 2011.
In this regard, field formations have started issuing legal notices to taxpayers, which is an effective enforcement measure for ensuring filing of returns in a timely manner. It is expected that during the exercise FBR will generate additional revenue in the form of late filing penalty and default surcharge under the relevant provisions of the Income Tax Ordinance 2001.
This enforcement measure will improve the compliance not only in the area of income tax return filing but ensure filing of withholding tax statements and sales tax returns. It is also learnt that the taxpayers who have filed their returns after receipt of e-intimations from the FBR system will not be penalised if the compliance has been made before issuance of the legal notice. Through imposition of minimum penalty of Rs 5,000 under the relevant provisions of the Ordinance 2001, the FBR will take action against non-compliant persons.
Under the legal process, initially a show cause is being served for non-filing or late filing of filing returns for providing opportunity of hearing. In case of non-filing or late filing of return, the tax department can impose minimum penalty of Rs 5,000. The section 182 of the Income Tax Ordinance empowers the tax officials to impose the penalty for failure to submit return of income or statement under section 115 or wealth statement and wealth reconciliation statement and monthly statement. The penalty could be maximum up to 25 percent of the tax payable under section 182 of the Income Tax Ordinance 2001.
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