ISLAMABAD: The Federal Board of Revenue (FBR) has implemented a new framework for conducting tax audits, assessments and related proceedings through the National Faceless Centre (NFC), effective October 15, 2026.
According to SRO 1828(I)/2026, the FBR has enforced Chapter XX of the Income Tax Rules, 2002, while SRO 1825(I)/2026 brings Chapter VIAC of the Sales Tax Rules, 2006, into effect from the same date.
The framework provides for electronic handling of tax proceedings, separation of official functions and quality-control reviews to improve transparency and procedural oversight.
Under the income tax rules, the faceless mechanism applies to cases designated under Section 122E of the Income Tax Ordinance, 2001, rather than automatically covering every taxpayer.
The covered proceedings include audits under Sections 177 and 214C, proceedings under Section 111 and assessments under Chapter X of the Ordinance.
The rules require audit, assessment and quality-control functions for the same case and tax year to be assigned to separate officers or units.
Notices, orders and other official communications must be generated through the FBR’s computerised system and carry a Digital Identification Number (DIN).
Taxpayers and their authorised representatives will be required to submit replies, supporting documents and evidence electronically through their designated IRIS accounts.
The framework also allows physical verification through the Field Operations Wing where necessary, subject to authorisation. Cases may be transferred to another tax authority in specified circumstances requiring physical records, repeated verification or special handling.
Audit reports, adjudication notices and assessment orders will undergo quality-control reviews under the prescribed procedures.
The rules also cover proceedings relating to penalties under Section 182 and default surcharge under Section 205 of the Income Tax Ordinance.
The new mechanism establishes a structured system for handling designated tax cases through electronic communication, independent assignment of functions and procedural reviews, while retaining provisions for physical verification where required.
