LAHORE: The Federal Tax Ombudsman (FTO) has issued a directive instructing the Chief Commissioner Inland Revenue Corporate Tax Office, Islamabad, to suspend all fresh tax audit proceedings. This suspension is to remain in effect until the refund process, which was previously ordered by the FTO, is fully implemented.
Furthermore, the FTO has summoned the Chief Commissioner Inland Revenue (IR) to appear and provide an explanation for the continued non-compliance and the delay in submitting the required compliance report.
Serious Concerns Over Non-Compliance
Sources indicate that the FTO has expressed serious concern over what it perceives as a “blatant disregard of legal obligations.” The Ombudsman has issued a stern warning that appropriate action will be taken if the defiance continues.
It is reliably understood that this directive stems from persistent delays and apparent non-compliance with earlier FTO recommendations concerning the issuance of lawful refunds for the Tax Years 2008 to 2017. The FTO has emphasized that initiating fresh audit proceedings for Tax Years 2020, 2021, 2022, and 2023 without resolving these long-pending refund matters constitutes maladministration and imposes undue hardship on taxpayers.
Adherence to FBR’s Own Instructions
The FTO’s order explicitly references existing FBR instructions dated February 4, 2022, which state that no fresh audit or recovery proceedings should be initiated against a taxpayer while a complaint is pending before the FTO, unless a tax year is about to become time-barred. The FTO’s directive reiterates this principle, instructing the Chief Commissioner IR not to conduct any audit during implementation proceedings of the refund order.
The order further notes the department’s repeated requests for extensions in submitting the final compliance report. “Case was fixed for hearing on 30.05.2025 and 20.06.2025 for filing of final compliance report. Instead of filing compliance report department again sought time for filing of final compliance report, case is finally fixed for 10.07.2025. You are directed to explain the reason of non appearance and delay in furnishing compliance report,” the FTO order states.
This decisive action by the FTO underscores the critical need for transparency, timely implementation of tax laws, and safeguarding taxpayers’ rights against arbitrary administrative actions, ensuring that the FBR adheres to its own rules and judicial directives.
