Tax consultants and taxpayers were of the view that the Directorate exercised the power of collecting financial details of the taxpayers conferred under SRO 660(I)/2007, which they termed as beyond its jurisdiction and tantamount to taxpayers' harassment. They said that they were asked to submit the copies of tax returns of last five years, wealth statements, bank statements and personal expenses. They said that there were already two departments - Directorate Intelligence and Investigation IR and audit department, which were already functioning as monitoring departments and made detection of tax evasion, under-reporting and under-assessments, which may transpired due to inefficiency, corrupt practices and lack of adequate skills.
Now, the Directorate has initiated similar exercise however, being internal control of FBR, it was entitled to safeguard revenue leakages by checking the accuracy and reliability of departmental working to promote efficiency and encourage adherence to prescribed law and procedures, they said and added that submission of said records to three different departments for same purpose is cumbersome for the taxpayers.
Meanwhile, the FBR official website apprised that the board had granted specified functions, jurisdiction and powers to the Directorate General of Internal Audit through SRO660 and it shall have the powers specified in section 176 of the Income Tax Ordinance, 2001.
When Contacted, Director DIA Dr Ghulam Murtaza said that we have the same powers, which were granted to the Directorate Intelligence and Investigation (DI&I)-IR but we were not exercising the whole powers. He said that Directorate was only exercising the sub-section (I) of section 176 under Income Tax Ordinance 2001 to facilitate the taxpayers; adding that the role of assessing officers were earlier given to taxmen under 1971 Ordinance but now ITO 2001 had empowered taxpayers for the same. Therefore, Directorate, which at that time used to monitor the assessment orders of the taxmen, is now scrutinizing self-assessment orders (returns) of the taxpayers under the Ordinance 2001 with widened scope.
Moreover, he said that Directorate through notices under section 176 of the Ordinance gave an opportunity to the taxpayers to clarify their position and if taxpayers enabled to make cleared its 70-80 per cent required documents then Directorate did not make any note against them for further action.
He also answered that if the Directorate obtained financial details of the taxpayers directly from system and made assessments and wrote notes then taxpayers would not only deprive from hearing opportunity but would also face audit or action under section 125A of the Ordinance. Director DIA further said that Directorate had issued nearly 400 notices during last financial year and recovered Rs 5-6 billion approximately while the revenue retrieval only in June was stood at Rs 4 billion through this exercise.
Copyright Business Recorder, 2017