Professionals resent electronic notices to taxpayers

KARACHI: Tax professionals on Friday criticised electronic issuance of notices to the taxpayers prior to freezing of their bank accounts by the Federal Board of Revenue (FBR), saying it is unlawful.     Pakistan Tax Bar Association (PTBA) said lawful procedure of serving a notice to the taxpayers is via registered post or through courier.

PTBA added that taxpayers are facing immense difficulties in complying with the tax laws as they are unable to receive the notices and tax authorities are deciding the cases ex-parte. Abdul Qadir Memon, president of KTBA said a large number of taxpayers approached the tax bar, complaining about the action of freezing bank accounts by the FBR without prior information to taxpayers.

Memon said the Federal Board of Revenue offices directly sent notices of audit, monitoring and assessment to the taxpayers’ account on IRIS, which is the Federal Board of Revenue’s online software. 

“In most of the occasions, taxpayers could not access to their accounts (on IRIS) and after prescribed date on the notices the Federal Board of Revenue takes one-sided action,” he added.

The Pakistan Tax Bar Association, in a letter to FBR said Section 218(I) of Income Tax Ordinance, 2001 binds tax authorities to personally serve notice to an individual on the prescribed address. “The construction of the language of the section does not leave any grey area for anyone to interpret,” the letter said. 

The Pakistan Tax Bar Association said service of notice through electronic means was envisaged under Rule 74 of Income Tax Rules, 2002. The rules, however, cannot prevail over the Ordinance even in the event of any conflict between the both. 

“The rule cannot expand the scope of the ordinance, therefore, allowing electronic medium for communication under the rules is null and void,” it added. Pakistan Tax Bar Association general secretary Muhammad Zubair said taxpayers usually do not access their bank accounts on daily basis.

“Recently, the Federal Board of Revenue attached several bank accounts and recovered amount on the basis of electronic notices,” he said. Taxpayers have a right of opportunity of being heard under the law. The bar urged the Federal Board of Revenue to ensure serving of notices only through postal or courier means.