FBR Implements New Safeguards to Prevent Illegal Bank Attachments of Taxpayers

The Federal Board of Revenue (FBR) has issued new guidelines to Inland Revenue field formations to ensure fair and legal tax recovery procedures, preventing illegal attachment of bank accounts. These instructions supersede previous regulations and aim to comply with an Islamabad High Court order.

Key Points:

• Jurisdiction: Zonal Commissioners must ensure proper jurisdiction and service of notices to taxpayers as per the Income Tax Ordinance.
• Opportunity to be Heard: Taxpayers must be granted adequate opportunity to respond before recovery measures under sections 138 or 140 are initiated.
• Court Orders and Stays: No further recovery action can be taken when a court or Tribunal order restrains tax collection.
• Prior Approval for Bank Attachment: Unless a restraining order is absent, bank attachment under Section 140 requires prior approval from a committee led by the Chief Commissioner.
• Seven-Day Payment Window: Before recovery under Section 140, a seven-day notice for tax payment must be issued under Section 138.
• Good Judgment in Appeals: Zonal Commissioners must exercise good judgment when filing appeals and consider the legal merit before seeking higher court intervention.

Benefits:

• Increased Taxpayer Protection: Ensures fair treatment and prevents wrongful bank account attachments.
• Improved Transparency and Compliance: Promotes adherence to legal procedures and strengthens taxpayer trust.
• Efficient Dispute Resolution: Encourages timely settlement of disputes through proper channels.

Conclusion:

These new FBR guidelines aim to strike a balance between effective tax collection and protecting taxpayer rights. By adhering to these procedures, Inland Revenue officials can ensure ethical and legal tax recovery practices, fostering a more cooperative and transparent tax environment.