A taxpayer in Pakistan has successfully challenged the Federal Board of Revenue’s (FBR) electronic system, known as IRIS, following glitches that impacted their tax refund and legal status.
The Case:
- A taxpayer filed a petition with the Islamabad High Court (IHC) against the FBR, including the Commissioner-IR, Deputy Commissioner-IR (DCIR), Islamabad, and Member (IT).
- The petition alleged maltreatment by FBR/PRAL/IT-Wing employees who allegedly changed the taxpayer’s Automated Time Limit (ATL) status without proper procedures.
- The taxpayer sought income tax refunds and enforcement of an order issued by the Appellate Tribunal Inland Revenue (ATIR), Islamabad.
The Issues:
- The FBR allegedly framed an “Inactive” status for the taxpayer’s company without issuing or serving the required legal notices.
- The Federal Tax Ombudsman (FTO) investigation revealed that the assignment notice under Section 120(3) was not electronically delivered to the taxpayer’s folder.
- FBR could not prove proper service of the notice and attempted to shift blame to IT system failures.
The Outcome:
- The IHC, upon reviewing the FTO report, acknowledged the flaws in the PRAL system and the taxpayer’s maltreatment.
- The court directed the FBR chairman to address the identified glitches and flaws within the IRIS system.
Significance:
This case highlights potential issues with the FBR’s electronic tax system and emphasizes the importance of proper notice procedures. The court’s decision reinforces taxpayer rights and compels the FBR to improve system reliability and transparency.
