ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to withdraw notices of monitoring of withholding tax issued to a deceased taxpayer.
The FTO issued the order after the FBR’s field formation issued notices to a deceased taxpayer for monitoring of withholding taxes after receiving intimation of his death from family members. According to the order of the FTO issued on Friday, the complaint was filed against the tax department in terms of section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance), for issuance of illegal notice and not cancelling the registration/ NTN of the deceased person.
Briefly as per the complaint, Gharon Khan Warar, a registered taxpayer expired in 2019 but the tax department kept on issuing notices even after the death of the taxpayer. The authorised representative submitted an application for the closure of NTN to the Income Tax Office but did not get any response.
The department responded that no death intimation of the deceased was submitted by his family members. It is on record that the taxpayer filed return of income for tax year 2020, as well as, for tax year 2021 in which he declared business income, agricultural income and turnover in spite of the fact that the taxpayer had already expired in 2019.
As per provisions of the Income Tax Ordinance, the commissioner may cancel the registration/ NTN on the death of an individual proprietor in terms of Rule 82(5) of Income Tax Rules 2002, the FTO said.
It is observed that even after the death of the taxpayer, the returns are regularly filed on behalf of the deceased. Whosoever is conducting business of the deceased after his death should have obtained fresh NTN and STRN against his own CNIC, as in case of individual proprietorship, registration in income tax, as well as, sales tax are issued against particular CNIC.
Copyright Business Recorder, 2023