Refund adjustment provision in new tax return form: IHC directs FBR to submit report

ISLAMABAD: The Islamabad High Court (IHC) on Monday directed the Federal Board of Revenue (FBR) to submit a report on whether the FBR’s new tax return form does not have any provision for refund adjustments.

The IHC has fixed the next date of hearing as September 29, 2022.

Through the instant writ petition, the petitioner, Ejaz Hussain Rathore, who is a practicing Chartered Accountant and has remained as the president of Rawalpindi/Islamabad Tax Bar Association, seeks a direction to the FBR to upload the returns of the total income of IRIS, which is in conformity with notification (SRO 978(I)/2022), which includes a provision for the refund adjustment of other year(s) against the demand for the current year in line SRO No92101.

The petitioner appeared in person and submitted that as per the consistent past practice, the refund adjustment of other year(s) against demand of tax for the current year, always appeared in the tax return forms issued by the FBR; that the Income Tax Rules, 2002 notified through Notification (SRO 820(I)/2022) dated 21.06.2022 also had similar provision and so also the final notification dated June 30, 2022, but the tax return forms uploaded by the FBR do not have any provision for the refund adjustment of other year(s) against demand for the current year; that by omitting such a provision in the tax return forms, the respondents have acted in violation of the applicable Rules; that such an omission amounts to the petitioner’s fundamental rights; that if a provision for such a refund is not included in the tax return forms, it would amount to unjust enrichment of the State. Issue notice to the respondents.

On the court’s call, Syed Ishfaq Hussain Naqvi, advocate, who is on the panel of the lawyers of the FBR, has tendered an appearance and accepted notice on behalf of the FBR.

He sought some time to submit a report. Since the last date for the submission of the income tax returns is 30.09.2022, let this matter be fixed for hearing on September 29, 2022.

Copyright Business Recorder, 2022