Home »Taxation » Pakistan » Ending audit proceedings: FBR may prescribe two-year time limit

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  • May 11th, 2017
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The Federal Board of Revenue (FBR) may prescribe a two-year time limit to end audit proceedings under Sec 177 of the Income Tax Ordinance 2001 in upcoming budget 2017-18; it was learnt here. According to sources, the said proposal was discussed during budget meeting held in Islamabad and the FBR was strongly urged to prescribe a two-year time limit to end audit proceedings under Sec 177 of the Ordinance.

They said that presently there was no time limit for completion of audit under said section and once the audit was started by tax authorities, in some cases, it remained pending for unreasonable time. Furthermore, if nothing is found as against the prejudice of the interest of revenue, no order is being passed by the tax authorities, they added.

Keeping the said problem in view, it is therefore recommended during budget meeting that audit proceedings may be concluded within the time limit of two years from the selection of case for audit and once the proceedings are concluded and a show cause is issued, it should be made mandatory to pass an order within a year of issuance of the show cause notice, sources said.

A proviso ''sub-section (6)'' is proposed to be added in section 177 of the Ordinance. The proposed sub-section (6) of section 177: "Provided that no order shall be passed under section 122(1) or 122(4) as the case may be, after a period of 2 years from the date on which the case was selected for audit by the Board under section 214 (c) or by commissioner under sub-section (1) or within one year of issuance of final show cause notice under sub section (9) of section 122, whichever is later".

It is also recommended that order for amended assessment proceedings may be concluded within the time limit of one year from the issuance of show cause notice under section 122(5) or 122(5A) of the ordinance as there was no time limit to pass an order after issuance of show cause notice under section 122(5) and 122(5A) of the Ordinance and in some cases, the pendency remains for unreasonable time, sources maintained. For the purpose, the FBR has urged to add two provisos ''sub-section (4) & sub-section (5B) in the section 122 of the ordinance. Sources said that these sub-sections restrict authority concerned to pass order within period of one year from issuance of final show cause notice under sub section (9) of section 122.



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