‘Simultaneous’ probe of same taxpayer: IHC seeks explanation from FBR

ISLAMABAD: Islamabad High Court (IHC) has directed the Federal Board of Revenue (FBR) to explain that how different FBR’s departments can simultaneously investigate tax affairs of same taxpayer of a specific tax period.

The IHC has further instructed the FBR to submit the legal position that how the Directorate General of Intelligence & Investigation (Inland Revenue) and Commissioner, Automatic Exchange of Information (AEOI) are simultaneously conduct audit of same taxpayer for the same period.

In this regard, the IHC has issued directions to the FBR Member Legal to explain the legal position to the court.

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FBR Member Legal has been further directed to appear in person on the next date of hearing and explain how jurisdictions have been allocated such that taxpayers are being investigated by different directorates working under FBR in relation to the same tax year, IHC order said.

The IHC observed: “This court is not satisfied with the explanations rendered by the learned counsels for the Directorate of Intelligence & Investigation, as well as, the Commissioner, AEOI, who is undertaking the audit.

The court deems it essential to hear from the Federal Board of Revenue (FBR) to understand how is it that various officers working under the same organisation simultaneously continue to investigate tax affairs in relation to one, particular tax year.

Let the Member (Legal), FBR, appear in person on the next date of hearing and explain how jurisdictions have been allocated such that taxpayers are being investigated by different directorates working under FBR in relation to the same tax year,“ IHC added.

The matter in contention before the IHC is that for purposes of tax year 2018 an audit has been instituted and is underway and all affairs of the taxpayer for tax year 2018 are under scrutiny.

The Directorate of Intelligence & Investigation also continues to seek information under Section 36 of the Income Tax Ordinance, 2001, for various tax years’ including tax year 2018 for which an audit is already underway. IHC has fixed January 25, 2024 as next date of hearing of the case.

Copyright Business Recorder, 2023