Karachi Tax Bar Association (KTBA) has expressed strong resentment over manual selection of audit cases for tax years 2010, 2011 and 2012. In a letter sent to chairman Federal Board of Revenue (FBR), the association said the commissioners from the Regional Tax Offices (RTOs) are either selecting cases for tax years 2010, 2011 and 2012 or asking to make compliances of the pending cases that manually selected for audit under section 177 of the Income Tax Ordinance, 2001, albeit the FBR is the only authority to select cases through computer ballot.

It said the Lahore High Court in its latest detailed judgement in case No WP.No 393/2012 declared the section 171 of the Income Tax Ordinance, 2001 as subsequent to section 214C. Therefore, the taxpayer will first be selected for audit under section 214C by the FBR and only then the commissioner can conduct its audit in accordance with procedure given in section 177.

Moreover, it said the Sindh High Court has also granted the stay on the same legal issue which is a matter of record and could be referred to for issuing the instructions for the benefit and justice to the taxpayers. It said after the insertion of section 72B through Finance Ad. 2010, the FBR was empowered to select persons for audit of tax affairs through computer balloting which may be random or parametric.

Keeping this in view, the association has urged the FBR to direct its all field formations to withdraw the cases selected manually under section 177 of the Income Tax Ordinance, 2001 for audit besides requesting to issue directives to its all field formations to initiate audit in only those cases that were selected through computer ballot.

Copyright Business Recorder, 2012