ISLAMABAD – The federal government has introduced a new mechanism for the automated scrutiny of income tax returns, allowing taxpayers to receive advance notifications about errors, discrepancies or irregularities identified in their submissions.
The Federal Board of Revenue (FBR) has issued a notification introducing a new Rule 38B in the Income Tax Rules, 2002, to establish the procedure.
Under the new mechanism, the FBR’s automated system, including the Computerised Risk Management (CRM) system, will examine income tax returns filed by taxpayers and identify any factual or legal errors and inconsistencies.
If discrepancies are detected, the system will send an online advisory or advance notification to the concerned taxpayer through the IRIS portal.
The initiative is intended to provide taxpayers with an opportunity to explain their position, correct mistakes or take necessary measures before any legal or penal proceedings are initiated.
The notification also allows the Inland Revenue Officer having the relevant jurisdiction to issue such advance notices.
Taxpayers will be given at least seven days to submit their explanations, rectify errors or address the identified irregularities.
If no response is received within the prescribed period, a reminder will be issued, providing another minimum period of seven days to respond.
The notification further states that details of discrepancies identified through the automated system, notices issued and responses submitted by taxpayers will be shared with the relevant Inland Revenue Officer.
A record of all notifications, responses and subsequent actions will also be maintained on the system’s dashboard.
After reviewing the taxpayer’s response, the concerned Inland Revenue Officer may initiate further proceedings, where necessary, in accordance with the Income Tax Ordinance, 2001, and the rules framed under it.
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