Tax office surrenders circular

KARACHI: The Federal Board of Revenue (FBR) on Friday surrendered a circular that was judged to be aimed at pulling the strings of officials at the first appellate forum of the tax judicial system.

A notification issued by the FBR stated the letter dated February 15, 2021 had been withdrawn ab-initio.

The FBR had issued the disputed letter directing Commissioners Inland Revenue (Appeals) to avoid unnecessary annulment of orders with direction, saying "frequent annulments with directions orders would reflect adversely on the performance of the tax officials".

Through that circular the FBR had authorised the commissioners to exercise powers under Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Federal Excise Act, 2005 for grievance redressal of taxpayers against adverse orders passed by IR officers.

The legal fraternity had strongly reacted to the directives issued by the FBR and termed it an interference with the independence of judiciary.

Commissioner (Appeals) is the first forum of 4-tier judiciary for tax matters. They are in direct administrative control of the FBR. Therefore, it was believed that the tax authorities through such order intended to influence the first judicial forum.

Sources in the FBR said the letter had been withdrawn after an outpouring of severe criticism from the legal fraternity, especially the apex tax bar of the country.

Pakistan Tax Bar Association (PTBA) in its letter dated February 20, 2021 had expressed annoyance over the text of the letter and directions issued by the Commissioner Appeals.