Assessment orders: tax officials not addressing jurisdictional issues: FBR

The Federal Board of Revenue has observed that tax officials are not properly addressing the jurisdictional issues before passing assessment orders in taxpayers'' cases which is one of the main reasons for high rate of appeals decided in favour of registered taxpayers.
Sources told Business Recorder here on Monday that the FBR has evaluated the reason for the high rate of appeals allowed in taxpayer''s favour and suggest specific measures to resolve this problem. The FBR was of the view that the problems have been assessed, but a plan to put in place measures to correct them is yet to be prepared.
Giving reasons for high rate of appeals allowed in taxpayer''s favour, FBR said that according to the principle, the first appellate authority is bound under the law of precedence to follow its earlier order as well as order of the Tribunal, High Courts and the Supreme Court. If a Tribunal or High Court annual or cancel an order, the first appellate authority is bound to follow that order in all subsequent cases on similar issue and the department has to follow its earlier interpretation until the issue is settled by the Supreme Court.
Another reason for high rate of appeals allowed in taxpayer''s favour is the non-provision of sufficient opportunity to the taxpayers/registered person, application of wrong provision of law, importer service of notices etc. Thirdly, lack of experience of the officer posted in audit units/appellate forums. Fourthly, selection of cases for audit on weak grounds is also one of the reasons for high rate of appeals allowed in taxpayer''s favour. In certain cases Jurisdictional issues are not properly addressed before passing assessment orders, sources said.
Sometimes representation by the department before the appellate authorities is inadequate, FBR added. Suggesting corrective measures, sources said that the refresher courses for the officers on law and procedure are being arranged at RTOs/ LTUs level. A plan for posting of audit officers on rotation basis in the audit units of field formations is gradually being implemented. Filed formations are being instructed to ensure monthly review of appellate orders passed, by the legal fora, by all concerned so that the same mistakes are not repeated. Moreover, the supervisory officers are directed to carry out regular inspection of the units working under their supervision and to provide necessary guidelines to the officers subordinate to them.