The Financial Express

Taxmen to jumpstart scrutiny of tax returns

All income-tax returns must go thru 'returns process' within one year of submission

| Updated: October 25, 2017 05:22:17

Evaly and Fianancial Express Evaly and Fianancial Express
Taxmen to jumpstart scrutiny of tax returns

Taxmen will jumpstart scrutiny assessment, dubbed 'return process', just after submission of tax returns in the current fiscal year (FY) to detect any arithmetical flaws.

All tax returns must go through such scrutiny, called return process, within one year of submission, as per a new provision incorporated this FY into the Income Tax Ordinance 1984.

"As a new provision has incorporated a scope of time-bar for return process after one year of the submission of income-tax returns, taxmen have to start return process just after submission of tax returns for FY 2017-18," said a tax official.

Until FY 2016-17, Deputy Commissioners of Taxes (DCTs) were allowed to process returns in a particular fiscal, after submission of tax returns. Date of tax-return submission was not being followed by the DCTs.

The National Board of Revenue (NBR) last week sent instructions to all field offices across the country asking the DCTs to start return processing of the tax returns in time.

In the instructions, the income-tax wing focused on the new provision that incorporates time restrictions for return process.

The DCTs will get 12 months, from the date of return submission, to process the returns. They will have to request taxpayers to submit amended tax returns within that timeframe. On the other side, taxpayers can also submit amended tax returns within a year if they found their arithmetical errors.

Taxmen have to send demand notice to their respective taxpayers assessing actual amount of payable tax, if applicable, within subsequent six months after serving the first notice.

Return process can identify less-paid revenue than that of the actual payable tax and the taxmen cannot process return after expiry of the said timeframe, the directive says.

Talking to the FE, a senior income-tax official said earlier the return process was valid for one year, irrespective of date of return submission.

"But this year, the provision of return process will be time-barred if the DCTs do not start the process from now," he added.

Under the provision of accepting amended tax returns, taxmen will have to notify the taxpayers if they found any arithmetical mistake in the tax returns. Taxpayers also can submit revised or amended tax returns voluntarily.

After talking to the DCTs in different tax offices, this correspondent found widespread confusions among them on the new provision of return process under section 82BB of the law.

The related section of the income-tax law is vital for assessment of the income-tax files.

Some of the tax officials suggested intensive training for the DCTs on the new provisions of the income-tax law.

Recently, the Large Taxpayers Unit (LTU) started imparting training to its officials on the amendments of the income-tax ordinance for FY 2017-18.

This year, each of the individual cases has to be taken care of separately as there is no general deadline for return process.

However, the taxmen will take the amended tax returns of the taxpayers as information and assess those to find out actual tax liability.

Taxpayers have to pay 2.0 per cent monthly interest if they want to submit amended tax returns.

Taxpayers will not be able to submit amended tax returns after six months of the serving of notice.

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