To end harassment during the audit of taxpayers, the Federal Board of Revenue (FBR) has introduced a new kind of concept of E-Audit eliminating direct interaction between the audit officer and taxpayer selected for audit.
The FBR intends to implement online audit (e-audit) proceedings, which is aimed at facilitating taxpayers for attend hearing without going to tax offices or FBR Headquarters.
The FBR issued SRO 636(I)/2021 to make amendments in the Income Tax Rules, 2002. The FBR has invited comments on the draft rules and asked stakeholders to provide their inputs within 15 days of issuance of the SRO.
Under the new facility, the “e-audit” means the audit proceedings of a registered person conducted through electronic means including video links, or any other facility as may be specified by the Board from time to time.
Under the procedure, where a case has been selected under section 177 or section 2I4C of the Income Tax Ordinance, the competent authority may issue direction to conduct an e-audit. The cases selected for e-audit shall be processed through the Automated Case Selection System which will create an assignment for issuing notices through IRIS to the taxpayer against the selection of cases for audit.
For issuance of notices, Automated Case Selection System will configure the list of officers of Inland Revenue to whom the case can be assigned; and list of the cases to be marked across the jurisdiction; and thereafter, intimate to the concerned Commissioner IR.
Where the case has been assigned by the Automated Case Selection System, the concerned Commissioner Inland Revenue where the case has been assigned by the Automated Case Selection System shall serve a notice, specifying the reasons for selection of his case for audit.
The taxpayer shall produce the record or documents including books of accounts maintained under Income Tax Ordinance, 2001 through IRIS or electronic data carrier notified by the Board.
The taxpayer shall not be required to appear either personally or through an authorized representative in connection with any proceedings under e-audit before the officer of Inland Revenue. In case of any explanation required by the taxpayer or officer of Inland Revenue, requests for personal hearing, shall be made through IRIS and may be allowed to do so in assigned Jurisdiction and such hearings shall be conducted exclusively through video links from the personal computer system or any of the nearest Tax Facilitation Centre situated at the premises of the different Tax Offices, as the case may be.
The audit officer if finds no discrepancy and has no conclusive proof against the taxpayer may close the audit and send it to the Automated Case Selection System. However, if the Audit Officer to whom the case is assigned, does not agree with the declared version and proposes an order for the assessment of tax, shall prepare an audit report, containing audit observations/ findings and forward the report to the taxpayer through IRIS and Automated Case Selection System simultaneously.
The Automated Case Selection System will once again configure and assign the case to any Adjudication Officer across the jurisdiction to make an order for assessment of tax under section 122, including the imposition of penalty and default surcharge in accordance with sections 182 and 205 of the Ordinance if required, as pointed out in the audit report.
Courtesy: Pro Pakistani