A new clause (1A) is proposed to be included in the Income Tax Ordinance 2001 which seeks to empower a special audit panel appointed under sub-section (11) of Section 177, for any tax year.
However, the audit panel will have to take prior approval of the commissioner of income tax concerned to enter the business premises of a taxpayer, to obtain any information, production of any record, on which the required information is stored and examine it within such premises.
The audit panel may, if specifically delegated by the commissioner, also exercise the powers vested in a Court under the Code of Civil Procedure, 1908 (Act V of 1908) in respect of certain specified matters.
Through the same bill, the government has proposed the constitution of a special audit panel. There will be two or more members of the audit panel which will be across all federal taxes — income tax, sales tax, customs and federal excise duty.
The proposed audit panel will comprise an officer or officers of Inland Revenue; a firm of Chartered Accountants as defined under the Chartered Accountants Ordinance, 1961 (X of 1961); a firm of Cost and Management Accountants as defined under the Cost and Management Accountants Act, 1966 (XIV of 1966); or any other person as directed by the FBR.
The panel will conduct an audit, including forensic of the income tax affairs of any person or classes of persons and the scope of such audit shall be as determined by the FBR or the Commissioner on case-to-case basis.
The special audit panel will be headed by a chairman who shall be an officer of Inland Revenue.
If any member of the panel, other than the chairman, is absent from conducting an audit, the proceedings may continue, and the audit conducted by the special audit panel shall not be invalid or be called in question merely on the ground of such an absence.
Functions performed by an officer or officers of Inland Revenue as members of the special panel, for conducting audit, shall be treated to have been performed by the special audit panel.
The FBR may prescribe the mode and manner of constitution, procedure and working of the special audit panel.