WHT audit monitoring: FBR gives concurrent jurisdiction to other RTOs/LTUs

The Federal Board of Revenue (FBR) has given concurrent jurisdiction for monitoring and audit of withholding taxes to the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) other than those within the realm of the said withholding agents.
Tax experts told Business Recorder here on Wednesday that the Income Tax Circular 5 of 2011 has allowed tax officials to have concurrent jurisdiction over withholding agents like banks, insurance companies and other multinational companies having different offices across the country.
Earlier, only officials used to have jurisdiction over taxpayers (withholding agents) for monitoring under section 161 of the Income Tax Ordinance 2001. For example, if a taxpayer was registered with LTU Karachi, the monitoring would also be done by the same officer. Now, the officer not having jurisdiction over the concerned taxpayer could also be exercising monitoring powers on the basis that the person (withholding agent) has branch or operation within his jurisdiction.
Experts further explained that now two or more officers could be exercising jurisdiction and passing multiple orders under section 161 of the Income Tax Ordinance 2001. This kind of multiple jurisdiction will create unnecessary litigation and problems for withholding agents.
Primarily, this will affect the banking companies, insurance companies and other multinational companies having various offices of operations in the country. For example, a multinational company having registered office in Karachi may also have branch offices in other big cities like Lahore and Islamabad. The IR officers in Lahore and Islamabad would have concurrent jurisdiction over the said branch offices and may also pass orders, if required under the law.
According to the FBR order, where withholding agent's "place of assessment" is other than its "place of business" which is located in the jurisdiction of another RTO/LTU, the Inland Revenue Officers of the other RTO/ LTU where the "place of business" is located, shall have concurrent jurisdiction on the person located in their territory for the purpose of monitoring of withholding taxes under Inland Taxes subject to the follow conditions:
Firstly, power to proceed u/s 161 or 205 of the Ordinance or under section 3 read with section 71 of Sales Tax Act, 1990 (as the case may be) in such cases shall be with the RTO/LTU having "original jurisdiction of assessment" on the withholding agent/person.
Secondly, the monitoring RTO/ LTU is not empowered to issue notice under the relevant provisions of law, requiring the person or withholding agent to file any statement concerning withholdings etc. If they need such statement for any purpose either they shall obtain it from web portal or from the concerned office where the taxpayer/person/withholding agent is legally obliged to file such statements and the collection of taxes enforced shall be accounted for by the monitoring RTO/ LTU, the FBR order added.