Tax dept accused of conducting audit proceedings under ‘repealed’ law

LAHORE: A taxpayer has accused the tax department for carrying out audit proceedings under repealed provision of the law.

According to sources, the taxpayer had filed income tax return electronically, which was treated by the department as an assessment order in terms of the income tax law. However, owing to the late filing of the return, taxpayer’s case was selected for audit under a repealed provision of the law and a show cause notice was issued on account of certain discrepancies found in the return and wealth statement, which culminated in passing of amended assessment order determining income level higher than what was claimed in the original assessment by the taxpayer. Being dissatisfied, the taxpayer appealed against the amended assessment order and the appellate tribunal annulled the disputed order.

The department was of the view that the income years related to the period covered under the repealed provisions can be brought under scrutiny. Therefore, the tribunal has erred to hold that power to use the repealed provision of the law was not available to the department after its omission from the Ordinance.

But the taxpayer stressed that any such power is not available to be exercised by the officers subsequent to the omission of the provision of the law. In the meantime, the taxpayer also approached the office of Federal Tax Ombudsman, who directed the department to withdraw the audit proceedings regarding late filing of return. The FTO has also dismissed a review petition filed by the Federal Board of Revenue, followed by another rejection of representation filed before the President of Pakistan. Both the forums held that department cannot be given the right to issue notice under a repealed provision of the law.

Copyright Business Recorder, 2024