Failure to submit record to CA firms: LTUs and RTOs told to penalise registered companies

The Federal Board of Revenue (FBR) has directed the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) to impose penalty on registered companies, who fail to submit requisite record to the chartered accountant firms hired for audit of corporate sector.
Sources told Business Recorder here on Saturday that the FBR has implemented a plan in the field formations for finalisation of the cases where audit cases of companies were outsourced to CA firms. According to the FBR directive to the LTUs/RTOs, in all those cases where the taxpayers have failed to provide the requisite record to CA firms, RTO/ LTU will take penal action against the taxpayers. In case the taxpayer fails to comply even after penal action, audit will be transferred from CA firms to the department and any fee paid will be refunded to the RTO/LTU within a fortnight from transfer of case from CA firm to RTO/LTU.
All the cases where advance payments have not yet been made to CA firms shall be transferred to the respective RTO/LTU whether or not audit proceedings have been stayed by the courts in such cases. The cases where there is no stay by the courts shall be audited by the Department on priority and the audit process may be finalised. All the cases stayed by the courts may also be transferred from CA firms to the RTO/LTU and the department may itself conduct audit or otherwise depending on the decision of the courts. Any advance fee if already paid to the CA firm will be refunded to the department within fortnight of the transfer of the case.
Sources said that the audit process for the tax year 2008 has not yet been completed by the CA firms despite expiry of a considerable period and exercise should be concluded without further delay. The representatives of the CA firms informed the Board that out of total 401 corporate audit cases, 117 were stayed by superior courts. In another 117 cases advance payments were not made by the Department. No action could be taken in respect of these 234 cases. As regards the remaining 167 cases, the record was not being provided by the taxpayers in 62 cases. Thus CA firms were left with only 105 cases out of which 96 cases have been finalised where reports have either been issued or they are under submission. The remaining 9 cases which are still in process will be finalised.
The Chief Commissioner and Commissioners will look into the affairs personally and ensure that audit of both companies and AOPs for the tax year 2008 is completed. The Chief Commissioners will personally monitor audit by holding regular meetings with the Chartered Accountant firms and Commissioners of Audit Divisions to hammer out any operational issues and to speed up the pace of audit. The audit of corporate sector and the association of persons (AOPs) for the tax year 2008 will be completed.